The president ended up dead because no one had the guts to tell him: “I can’t do that”. That seems to be what happened on April 2010 when then Polish president Lech Kaczyński insisted that his flight landed in the Russian city of Smolensk despite the foggy weather. The democratically elected president of Poland and other 95 people on board crashed into the trees. They all died.
Does president Andrés Manuel Lopez Obrador (AMLO) really believe that his construction project at the Santa Lucía Air Force Base in central Mexico is “the largest, most technologically advanced airport under construction in the world”? No one dares to contradict him? It could also be that AMLO knows full well that he is lying, but like any cult leader, he knows his faithful well and trusts that they will follow him to the death if need be.
Every single political decision in Mexico today depends solely on AMLO. In late January, his own personal decision put Mexican medical personnel at risk. Instead of inoculating more health workers, AMLO opted to prioritize the vaccination of teachers in the southern state of Campeche and an army of political operators known as the “Siervos de la Nación”. Such moral turpitude by the country’s leader would have sparked a scandal in any democratic country. In Mexico, the woman in charge of the vaccination effort valiantly presented her resignation after disagreeing with the decision. Nothing else happened.
AMLO’s recent decision to reform Mexico’s Electric Industry Law is a wild idea and will have untold costs. His goal: to return to an era where state-owned utility CFE was a monopoly with hegemonic control over the entire Mexican electricity sector. It goes against the Mexican Constitution. Earlier this month, the Supreme Court already ruled against a regulation with the same objectives presented by AMLO’s Ministry of Energy. It is also in violation of the US, Mexico and Canada trade agreement (USMCA). Under the trade deal signed by AMLO, Mexico pledged not to favor state-owned companies over private ones. The USMCA also states that those sectors of the Mexican economy already open to private firms -and set forth in other free trade agreements- would not be closed off. Has someone explained to AMLO the consequences of violating the deal? Or does AMLO simply not care and there is no force capable of stopping him?
The proposed reform to the Electric Industry Law is absurd. Instead of providing priority access to the Mexican electric grid to those firms producing electricity at the cheapest price (as is the law today), the reform mandates to prioritize CFE-produced electricity. No matter that CFE power is dirtier and more expensive.
Reform advocates believe that CFE will make more money because it will allow to sell more of its expensive and dirty electricity. Are they unaware to the fact that for CFE, buying energy from private wind and solar producers is cheaper than to produce it in house?
The proposed bill reeks of expropriation. Those companies that invested in Mexican clean energy did so under a law that guaranteed that they would be connected to the power grid if they had the cheapest costs. Many lawsuits await if AMLO’s proposed bill passes the Mexican Congress. Private investors most surely will win. Mexico will be forced to pay multimillion dollar settlements.
AMLO must be unaware that the decision to open the Mexican power sector to private investment in the years past was motivated by a fact: the manufacturing industry requires a lot of energy, and CFE simply did not have the resources to generate that electricity. It does not have them now.
Since the private companies did well, profits ensued. The AMLO administration believes that to be an abuse. If the president has a single iota of evidence of private electricity firms violated Mexican law, he should push for their prosecution.
AMLO has said that he will not change a single comma in the proposed bill. His majority in the Mexican Congress will basically follow his instructions. A reform bearing such huge implications for the Mexican economy ought to require deep technical analysis. But that has no value here. AMLO’s word is the law.
The presidential whim is going to affect Mexico’s most dynamic economic sector: manufacturing. AMLO himself has called Mexican manufacturing the North American spark plug. This industry requires reliable energy at a competitive price. Today, manufacturing needs energy from clean sources. The fact that Mexico was not able to guarantee such clean energy flow was one of the reasons why Tesla decided not to build its new factory in Jalisco last year. It ended up going to Texas. Many more companies will stop investing in Mexico and some already here will leave.
The powerful tend to believe that they know everything. Without checks and balances, they can force a pilot to land where they see fit. Without checks and balances, president AMLO is forcing legislators to lead Mexico on a collision course with its main trading partner, the US. It would also put at risk Mexico’s most important economic sector. All this during a pandemic and lean times.
* Carlos Elizondo Mayer-Serra is professor at the School of Government and Public Transformation at Tec de Monterrey, in Mexico City. A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. Twitter: @carloselizondom
