The success of some of the most transcendent political leaders in history was forged thanks to the fruitful assembly of strong teams, made up of people with piercing opinions and sharp strengths. Abraham Lincoln, for instance, formed his famous “team of rivals”, in which he summoned people with drastically different points of view. Lincoln invited them to debate in front of him to learn from each other’s viewpoint, and thus be able to make better decisions together, building upon everyone’s abilities.
The attributes that a politician needs today in order to become the leader of a nation are not always compatible with academic careers or specialized knowledge. However, a good leader knows how to recruit talent, puts aside his ego and listens; he knows when it is necessary to delegate and rely on those who know more.
Andrés Manuel López Obrador (AMLO) does not understand many topics. It’s not his fault. But making decisions as if he understands them is a serious problem. AMLO is destroying decades of credibility that Mexico accumulated through a solid management of its economy. Mexico’s technocrats have been praised internationally, and its economy has been awarded with one of the best credit ratings in Latin America, only behind that of Chile (a 75% smaller economy). AMLO believes that in order to keep such standing, he should simply avoid contracting new debt. He must be stunned by the continuous reprimanding of credit rating agencies. AMLO does not understand that a country’s indebtedness is measured by dividing its total debt by the total size of the economy, its GDP. Debt rises when debt increases, but also when GDP falls. Also, since AMLO decided not to protect formal employment, credit rating agencies are concerned that the government is condemned to collect less in taxes. Revenues are already low in comparison to countries with similar economic development.
AMLO believes that self-sufficiency in terms of gasoline production increases our sovereignty. He is wrong. Pemex, Mexico’s state-owned company, is one of the world’s least efficient oil refiners. This is not due to its physical infrastructure but rather to its purposely flawed procurement practices, high corruption, and deficient and limited distribution channels. In normal conditions, the value of Mexico’s crude oil exceeds that of the gasoline and other by-products that Mexico refines. Furthermore, the insistence on generating electricity by burning fuel oil (a harmful and undesirable by-product of which Pemex obtains between 10 and 20 times more than efficient refiners), will cause harmful pollution and make electricity more expensive, given that fuel oil costs more than the natural gas Mexico currently imports and burns cleanly. The inefficiencies caused by promoting this activity will make us less competitive internationally. Does this increase Mexico’s sovereignty or Mexico’s poverty?
AMLO does not understand that Mexico’s central bank is not a commercial bank. His concern about the bank’s recently announced monetary policy measures, saying that this very timely decision to increase liquidity by participating in the secondary market of bonds would somehow allow the central bank to lend money to failing private companies, makes no sense.
He does not understand that the funds in Mexico’s private pension system (Afores) are not the property of its custodians -private commercial banks- or of the State, but rather they are funds that Mexican workers have been saving over the years to improve the conditions of their retirement. The role of commercial banks is to safeguard their savings and to offer suitable investment solutions. They compete with each other by differentiating themselves in terms of management fees or performance. If AMLO decides to take these funds, or forces them to finance his white-elephant projects, he will simply be stealing from millions of Mexicans.
AMLO does not understand that his lousy management of the pandemic will cause more poverty and exponentially increase inequality. Mexicans with enough means, or whose source of income has not been affected, can stay home and protect themselves from contagion. Many others cannot. Millions of Mexicans will lose their jobs and go from being salaried employees, living paycheck to paycheck, to the informal economy. They will be the new poor.
AMLO does not understand that the agreement reached between IDB Invest (the Inter-American Development Bank’s private arm) and the Mexican private sector does not have to go through government entities, nor does it require his government’s endorsement. This agreement is an honest and intelligent effort by Mexican business leaders to provide a lifeline for micro, small and medium-sized companies in Mexico, that without it would otherwise be forced to permanently close.
AMLO does not understand many things, but he imposes decisions as if he understood everything, and does not listen to those who know more than him. He risks being the worst president in Mexican history.
* 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