In his excellent book “On Tyranny”, Yale University professor Timothy Snyder, reflects on the lessons of the 20th century to prevent the rise of tyrants to power. Snyder advises “Do not obey in advance”. Snyder underscores that “Most of the power of authoritarianism is freely given…individuals think ahead about what a more repressive government will want, and then offer themselves without being asked… A citizen who adapts in this way is teaching power what it can do”.
Despite potential threats from Mexico’s Financial Intelligence Unit chief Santiago Nieto of freezing bank accounts, or pushing for domain extinction, Mexican businesspeople are wrong to be submissive before President Andrés Manuel López Obrador.
AMLO’s government has not even had to resort to censorship. Communicators perceived as critical of the regime have left their positions because media owners have sought to please the government with their ouster and have opened spaces to those who sympathize with the regime. Media owners sacrifice audience, without realizing that it is this that makes them less vulnerable.
Mexican entrepreneurs should not postpone the confrontation with the AMLO government, as this will be infinitely more violent if it occurs in response to an economic crisis -which they will be blamed for- and when state institutions have been all captured. But it is important to be united when opposing the regime, although some business leaders seem to suffer from the Stockholm Syndrome: they are so grateful about having the ear of the leader, that they would even thank him for not hitting them more forcefully.
Today there is a possible quid pro quo that business leaders can present to the AMLO government. They could commit to invest in Mexico in exchange for the government committing to respect clear limits: the autonomy of the Central Bank is untouchable, the National Elections Institute’s is too (with none of its future counselors being members of any party), autonomy will be given back to National Human Rights Commission (CNDH) and to the Energy Regulatory Commission (CRE) along with their previous budgets, and that all autonomous bodies that require technically competent officials, will have them. This is not a political argument. The uncertainty that comes from volatile and improvised regulators kills investment.
Mexican entrepreneurs could offer the AMLO government to support a comprehensive tax reform, agreed with them, but demanding a campaign to discourage informality. They could also offer the creation of a special tax for the next 10 years, and its proceeds would be used exclusively to investment in security (development and training of local police, acquisition of technology and weapons, development of intelligence capacities) and investments in prosecution and administration of justice (strengthening the Accusatory Criminal Justice System, training investigators, prosecutors and judges). But the private sector would have to demand for this program to be developed and supervised by a commission where experts (proposed by them) work hand in hand with government officials. The first urgent priority would be to use the full force of the State to stop violent crime.
Uncertainty around uninterrupted access to energy at a reasonable cost makes it impossible for the private sector to commit to invest. Mexico’s state-owned utility (CFE) must encourage the private power generation of electricity and accept being only in charge of distribution and commercialization. It is necessary to demand the return of the oil and gas rounds along with farmout auctions, so that Pemex (the state-owned oil company) can focus its scarce resources in increasing oil production, while leaving marketing, distribution and storage activities in private hands.
AMLO could have used the gathering with Mexico’s largest tycoons to summon them to close ranks in the face of growing problems and a complex environment. Instead, he decided to humiliate them, by “inviting them” to sell tickets of a so-called raffle. AMLO is not a statesman, nor does he intend to govern for all. He is squandering his political capital in frivolous things. If the goal of his gathering with the private sector was to raise private resources for public health, why not simply ask for in-kind donations? Let’s not forget that the lack of medicines in public hospitals or the reduction in the Mexico’s security budget did not occur because the AMLO government lacks money, but because it decided to give it away to Pemex and to distribute it among its political clienteles.
The President is losing credibility and prestige by the minute. Just read what the international press says about him. This is driving away the investors Mexico needs. An economic crisis is in no-one’s interest. If we lose 6 years, we will not recover them.
* Jorge Suárez-Vélez is an economic and political analyst He is the author of The Coming Downturn of the World Economy (Random House 2011). A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. Twitter: @jorgesuarezv