Throughout history there have been crises that were so devastating they could only be contained with the deliberate action of society as a whole. That is why existential` threats -wars, pandemics, natural disasters- become a showcase where we are able to measure the character of a leader.
The empathy of great leaders leaves a mark. Their strength and honesty prevent them from underestimating great challenges that societies face. They are able to persuade us of the importance of facing hardships together, leaving behind differences in the pursuit of a common goal. The best leaders surround themselves with the best minds and the most experienced professionals to present a response that is proportional to the challenge. Due to their integrity, they don’t shy away from telling the truth, even when it may be hard to hear. This gives confidence to those who listen, making them eager to follow their lead.
A good leader listens to experts and shows flexibility. He leaves behind previous plans, if necessary, in order to adapt to a changing environment, putting together sensible programs to mitigate the damage of a crisis, increasing the likelihood of rebuilding successfully after it subsides.
In contrast, a bad leader will use a crisis to foster divisions. He will not acknowledge his mistakes. When possible, he will recklessly blame those who have not submitted to his mandate, turning society against them. He will not hesitate to disseminate biased or incomplete data if it supports his skewed narrative, even if by doing so the crisis worsens. A bad leader lies and hides relevant information if it helps him to minimize the severity of what is coming, or to hide his mistakes. He does not listen to experts and opts to surround himself with those who validate his narrative, even if it has little to do with reality. He prioritizes short-term actions, even if they prevent the possibility of reaching long-term goals. A bad leader is unable to articulate relief programs that go beyond what is immediate.
Mexico faces the worst possible crisis with the worst possible leadership. A leadership that confirms how much easier it is to destroy than to build. In only 16 months, the government of President Andrés Manuel López Obrador (AMLO) has caused irreparable damage. In light of the COVID-19 pandemic, indefensible mistakes have become evident: defunding public health, gutting the Seguro Popular health insurance program, wrecking drug procurement structures without first implementing alternative supply chains, and cancelling the construction of hospitals just because they were being built under public-private initiatives. Was the previous public health system perfectible? Certainly. The decision of the AMLO administration to dismantle it without knowing what would replace it was a disturbing display of irresponsibility and ineptitude. Moreover, taking much needed resources from the public health system and injecting them into AMLO’s clientelistic hand out programs can now be described as criminal.
It is evident that the AMLO government will have no resources to deal with the effects of the COVID-19 shock. Tax collection will plummet in 2020. Tax revenue numbers for 2019 are fake, as they appropriated funds from the Revenue Stabilization Fund (FEIP) and considered these to be income. The AMLO government will also take a painful hit from its absurd effort to rescue Pemex without first making deep structural changes to a company that is unsustainable in its current form, and is the third most indebted company in the world. If Pemex already lost MXN $658 billion in 2019 (US $35 billion) with Mexico’s export grade oil mix at US $55, the company will lose much more with a 70% lower price. Many of us sounded the alarm saying that AMLO’s unconditional rescue of Pemex would hinder Mexico’s public finances. That is exactly what has happened.
It is absurd that the AMLO government decided to maintain austerity despite the worst global economic contraction in 90 years. AMLO’s insistence on transferring valuable public resources into pet projects (the Dos Bocas oil refinery, the Mayan Train and the Santa Lucía airport) went from being irresponsible and ignorant to insane. The anticipated devastation of private companies following the COVID-19 shock (especially without the introduction of any fiscal relief) along with the lack of public investment, will result in Mexico’s worst economic performance since 1932. The lack of private investment in production capacity and the absence of public investment in infrastructure will combine to decimate Mexico’s potential output and will cancel any possibility of recovery. Stagnation will be permanent.
No government in the history of Mexico will have produced as many poor people as AMLO’s. Is that what he meant with his “poor first” campaign slogan? If so, it will end up being his only achievement.
* 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
