President López Obrador delivers first state of the union address

President Andrés Manuel López Obrador

gave his first state of the union address on Sunday with the economy flirting with recession , murders reaching record levels, and his popularity riding high.

After taking office in December and vowing to revive a sluggish economy and bring down violence , López Obrador has so far fallen short of the goals he set himself.

But he has firmly installed himself at the center of public consciousness with two-hour daily news conferences and rallies around Mexico which he uses to discredit adversaries and blame previous governments for the country’s woes.

“We’re going to put a stop to corruption and the luxuries of government ,” he told a crowd in the northern town of Concepcion del Oro this month. “These show-off, arrogant politicians, surrounded by bodyguards, they’re heading to a faraway place, like when you hit balls for a home run over the fence.”

For now, problems that dogged the previous administration have only continued to grow.

Homicides

hit record levels in 2018. During the first eight months of López Obrador ’s administration, 19,642 murder investigations were opened, up more than 4% from the same period a year earlier, according to official data.

Last week 28 people died in an arson attack on a bar in Coatzacoalcos , Veracruz , one of the worst mass killings of the administration.

López Obrador

has acknowledged his government must do more to improve security , though he is adamant the new National Guard he established will contain the violence .

Meanwhile, the economy posted no growth in the second quarter and shrank by 0.3% in the January-March period.

Fernando Belaunzaran

, a leader of the center-left Party of the Democratic Revolution and staunch critic of López Obrador , said the president’s permanent campaigning and control of the news agenda had kept problems at bay.

“Even though his rhetoric is very simplistic, it’s effective,” he said. “People are still giving him the benefit of the doubt. But a time will come when reality bites.”

López Obrador

has not had it all his own way. Frustrations about his management boiled over last month when Finance Minister Carlos Urzúa quit, accusing the administration of crafting policy without enough forethought and of foisting unqualified officials on him.

Uncertainty

Mexico

has had to contend with the risk of economic disruption from abroad since U.S. President Donald Trump threatened to slap tariffs on all Mexican goods if the country did not curb U.S.-bound migration from Central America .

López Obrador

responded by sending thousands of National Guardsmen to Mexico’s borders and has accepted thousands of asylum seekers while they await court hearings in the United States .

His moves have placated Trump , who is deeply unpopular in Mexico but polls suggest a growing hostility toward migrants in Mexico . Meanwhile, some officials in López Obrador ’s administration are unhappy with his accommodation of Trump .

López Obrador

insists he wants no dispute with the United States and the episode has done little to dent his popularity .

An August survey of 1,000 Mexicans for EL UNIVERSAL showed López Obrador had the support of 69% of respondents, slightly up on the results of a June poll.

Nevertheless, the survey showed that more than 54% of respondents believed the president was not coping with Mexico’s problems . Only 38% took the opposite view.

The poll did show strong support for his tough talk on tackling corruption , and López Obrador has started to generate some expectations that he is serious about it.

Prosecutors

have launched high-profile investigations against two senior officials from the prior administration centering on suspected misuse of public funds . One of them is now in custody pending trial.

The graft cases, along with public auctions of impounded assets and luxury aircraft and vehicles from the last government have helped keep attention away from less positive news.

On top of that, the president has sought to trumpet success in wringing concessions from the private sector . Last week López Obrador said he had saved taxpayers USD $4.5 billion by making companies renegotiate several natural gas pipeline contracts signed by the last government .

But not everyone is impressed: “It’s a bad precedent,” said Andrés Rozental, a business consultant and former Mexican diplomat, referring to the pipeline deal . “And it raises the level of uncertainty.”

Economy

During his first state of the union address on Sunday, López Obrador doubled down on his approach to managing Latin America’s second-largest economy , saying the interests of private firms would be subordinated to those of the nation.

López Obrador

emphasized that his economic plan would look to promote private enterprise , boost foreign trade and promote the attraction of foreign investment.

Nevertheless, some of the decisions made by López Obrador, an exponent of economic nationalism , have shaken investor confidence in Mexico . Among them, his cancellation of a partly built USD $13 billion Mexico City airpor t rattled markets.

Last week, the central bank said the economy was facing headwinds , including stagnating private investment , which was affected by a persistent environment of uncertainty stemming from the public policy decisions made by the government and concerns over insecurity and corruption .

In his state of the union address , López Obrador also said that income distribution would remain a priority over economic growth.

The administration will “gradually push aside the technocratic obsession of measuring everything based simply on economic growth, ” he said. “The equitable distribution of income and wealth” will be his government’s guiding principles.

He has argued that by redistributing wealth better, his government is able to help economic development among the poor even with lower headline growth numbers.

Mexico narrowly avoided entering a recession in the second quarter, prompting the central bank to cut its economic outlook for the year to forecast virtually no growth, citing slack conditions that will persist longer than expected.

In his first nine months in office, López Obrador has repeated the message that the chronic inequality, gang violence, and tepid growth afflicting Mexico are the product of decades of government by a corrupt political and economic elite still trying to resist his promise of change.

President López Obrador's challenge

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