AMLO incoherent, wars and weapons

Por Alejandro Tagliavini. Publicado el 14/3/19 en: https://alejandrotagliavini.com/2019/03/14/amlo-incoherent-wars-and-weapons/

 

Few days ago Andrés Manuel López Obrador -AMLO- fulfilled 100 days of government in Mexico, being the president best valued in the last 30 years, with 78% approval, according to Mitofsky, while the Consumer Confidence Index has achieved its highest level since 2001. And, with a majority in the legislative chambers, “governing” is extraordinarily easy.

But at the same time, multinational state agencies have reduced their GDP growth ratio, such as the IMF, and the OECD which predicts 0.5% less than its previous forecast, leaving it at 2% and 2.3% by 2019 and 2020, respectively. More worrying is that Standard & Poor’s has lowered its rating outlook from stable to negative, mainly because AMLO will reject the energy reform initiated by its predecessor, reducing private participation and causing a drop in investment and confidence.

López Obrador wants to strengthen the state oil company Pemex – an example of inefficiency and corruption – while promoting measures “against corruption.” Due to market shortages, high gasoline prices because of taxes and corruption in the state gasoline company, huachicoleo – fuel steal – involves around 20% of Mexican oil production.

On the other hand, he implemented some symbolic but praiseworthy austerity measures, such as giving up the car and the presidential plane, reducing his salary by 40% and withdrawing the life pension of former presidents, limited political advisors and abroad trips, canceled bonds and official cars, has halved the public budget on propaganda and limited the renewal of public offices equipment. But he will waste all this saving in welfare, gifts that do not go to the bottom of the problem of unemployment and poverty.

It is also good news that the paradigm to combat insecurity has been changed and the government has announced that the war against drug trafficking “has ended”. They would stop prohibiting marijuana and poppy and give a controversial amnesty to drug lords. A strategy “not based exclusively on the use of public forces, but also on social programs”.

But this plan contemplates the creation of a new force, the National Guard, which has been harshly criticized by international organizations which denounce that this will perpetuate the military presence in the streets.

According to the SIPRI, between 2014-2018, the war against drug trafficking, which began in 2006, caused arms imports to increase by 40%, placing the country as the first Latin American buyer and 34th worldwide. Although the most notable increase was that of Nicaragua, which multiplied its purchases -to Russia- by eight during the same period. While Venezuela has totally cut off, in 2017 and 2018, its imports due to the severe economic crisis.

Anyway, speaking of weapons, Saudi Arabia is the main global buyer -10% of its GDP spent on defense, the largest percentage worldwide- and this could explain why the international community has not been so clear to condemn the official crime of journalist Khashoggi. The Arab country, with 0.4% of the world’s population, received almost one-eighth -12% – of all global imports in the last five years, being the main US client, which is the world’s largest exporter, 36% of total traffic.

 

Alejandro A. Tagliavini es ingeniero graduado de la Universidad de Buenos Aires. Ex Miembro del Consejo Asesor del Center on Global Prosperity, de Oakland, California y fue miembro del Departamento de Política Económica de ESEADE.