Few people have hit the nail more on the head when describing Mexican president Andrés Manuel López Obrador’s limitations than former presidential hopeful Ricardo Anaya, who told him in a presidential debate in 2018 that his problem wasn’t his age but rather that his ideas are old. They are.
At a spectacular event recently organized by Tec de Monterrey university, some of the minds that best understand where the world is headed were among the speakers. Several things became clear. First, that we were undergoing an unprecedented disruption even before the Covid-19 pandemic hit. At the risk of unfairly summarizing brilliant talks, they said that we are witnessing on the one hand a tech revolution, where artificial intelligence, machine learning, 5G, and the ability of quantum computers to crunch reams of data will change how we live, how we work, how we entertain ourselves, and how we relate to one another. Thanks to these capabilities, once the virus’ genetic sequencing was completed, Moderna’s Covid-19 vaccine took 48 hours to develop, a truly unprecedented achievement. In addition, a biotech revolution that will be even more disruptive and will change humanity’s potential and future is simultaneously taking place.
In the coming decades, the most pressing challenge will be to attain net-zero carbon power generation. The demand for energy will grow exponentially, hence the urgency to generate it without further damaging the planet.
Israeli historian Yuval Harari and US journalist Thomas Friedman spoke, among other things, of the great challenges facing leaders who should strive to align their countries with this monumental change, endeavoring to see the greatest number of their citizens successfully integrating into the forthcoming economy and providing alternatives to those performing jobs that will become obsolete.
AMLO, as the Mexican president is also known, does not understand that this has nothing to do with his conception of a world made up of conservatives, liberals, the left or the right. We are in a race against the clock, where middle-income countries -like Mexico- strive to step into activities and sectors that will absorb the majority of the resources available for investment, and will seek to make change profitable.
In early 2006 (when AMLO’s first run for the presidency), Amazon, for example, was worth “only” US $20 billion. Today it is worth about US $1.5 trillion, 75 times more. That’s 35 percent more than Mexico’s nominal GDP. Over the same period, the value of Exxon, the largest US oil company, fell 30 percent, from US $376 to US $264 billion, despite being profitable and very well managed. In 2006, Exxon was 19 times Amazon; today Amazon is six times Exxon.
Integrating into the new economy, from which Mexicans are currently marginalized, will be very expensive. But it would undoubtedly cost less than the tens of billions that we will literally squander over the next few years covering the losses of state-run oil company Pemex and public utility CFE. Lets not forget the money that will be wasted on the Dos Bocas refinery, that would have been a bad idea in the 1980s and is a tragic one today, on an airport that nobody will use, and on a ludicrous train that -if ever completed- will be a money pit (alert the military, whose pension fund is supposed to be funded with its “profits”).
Resources are scarce, by definition. The government’s obligation to allocate them efficiently is strategically critical today. The fate of generations of Mexicans will depend on it. This is not a good time to clash with private companies. Mexico should strive to attract international investors by offering conditions that entice them to add their resources to those of the government. It is time to build a rule of law that guarantees property rights and ensures that contracts are upheld. If we want a prosperous Mexico, we need to invest as much as possible to educate our youth so that they have the tools and skills that play to the new labor market, affording them access to well-paying jobs and promising careers. It is immoral that this government condemns its political client base to everlasting poverty by handing out just enough money to get by, fostering dependency.
A fascinating world looms. It is up to us to be part of it or watch it from afar. Mexico must urgently sit at the table where the great decisions defining the future of the world will be made. If we don’t, we will be reduced to being a tidbit.
* 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
