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Delfina Gomez, candidate for governor of the State of Mexico for the Morena party, celebrates after preliminary election results are announced in Toluca.
AMLO's party wins big Mexican state, looking good for 2024
Mexico's ruling Morena Party on Sunday won a bellwether election in the State of Mexico. This is good news for President Andrés Manuel López Obrador, aka AMLO.
For one thing, Mexico is the country's most populous state and has outsize weight in national politics as it hugs the federal capital, Mexico City, and its diverse composition signals wider voter trends. For another, the left-wing Morena defeated the centrist Institutional Revolutionary Party, or PRI, which had ruled the state for almost 100 years and is languishing in the political doldrums under AMLO.
But election night also delivered a warning for the president and his party: In a separate vote, the PRI walloped Morena in Coahuila. Although this border state is much smaller than the State of Mexico, Morena lost because party infighting resulted in the ruling coalition running three rival candidates, which siphoned key support from Morena's pick.
"AMLO will confirm that his political calculations continue to be spot-on as he managed to transfer his popularity to his party's candidate," says Eurasia Group analyst Matías Gómez Léautaud.
This is crucial for Morena to stay in power 13 months out from the presidential election since AMLO is limited to one term. It's an open secret that his preferred successor is Mexico City Mayor Claudia Sheinbaum, now the presumptive frontrunner despite some internal opposition. For Gómez Léautaud, "AMLO's overbearing presence and control will impede any schisms within the party to translate into rival candidacies from disaffected candidates."
Optimism about Mexico's political and economic future
Ian Bremmer's Quick Take: Hi everybody, Ian Bremmer here. A happy Monday to you and a Quick Take to kick off your week. I'm just back from Mexico, Mexico City myself, and lots of fascinating meetings, lots of takeaways. Thought I would give you some of my sense of what is happening there, Mexico and Mexico's context in the world.
First thing I would say is I come away pretty optimistic about where the country is heading overall, and some of that is the context of Mexico in an environment where China-US relations are getting a lot more challenging. There is some significant national security and strategic decoupling that is happening at the behest of US administration, governors, members of Congress, both Democrats and Republicans. And also, there's a lot more uncertainty about doing business in Xi Jinping's China itself, given the rapid and sudden changes on COVID, on how to do business as a technology company, on rules and regulations for the private sector, rule of law and its absence, local competition, you name it. And so, even though I still fairly strongly believe that China's going to become the largest economy in the world by 2030, the idea that US corporations will be able to take as much advantage of that is increasingly uncertain. Almost any business leader you talk to in the United States is saying, "Yeah, China is an important market for us, but we are being more cautious about how much we want to invest there, going forward. At the very least, we're putting a pause on some of the big decisions we're making." And in many cases, they're starting to reduce some of that forward looking exposure.
Who are you going to invest towards if you're not investing in China? Well, Mexico in many ways is the country that stands to benefit the most outside of the United States. And indeed, in every meeting I had in three days in Mexico, I was hearing about near-shoring. It's a kind of awkward term, but basically the idea of multinationals based in the United States, doing a lot more on the ground in Mexico. Mexico's the 15th largest economy in the world. It is a large population, it's quite young, it's hardworking. The demographic's increasingly very attractive and it's strongly integrated into the US economy and supply chains. The fact that Tesla had just announced a $10 billion investment near Monterey while I was there was a big boost, a shot in the arm for the Mexican economy that a lot of people were talking about.
And so as a consequence, I mean, there's no question I meant think back on Lula's days, his first time around as president and how much his popularity was benefited by the fact that the economy was in a commodity super cycle and indeed, led to some 80%, even 90% of times approval ratings. I think that right now, Mexico benefits significantly from right place, right time, given what's happening geopolitically.
Now, looking to Mexico itself, I have to say that I was also surprised that Mexico's CEOs and bankers, who have been enormously negative pre-pandemic about then new President AMLO, and he doesn't like him, he doesn't want to talk to him, he's going to be a disaster, he is going to lead the economy into ruin, this time around, I heard still plenty of criticism, but also a recognition from the CEOs in Mexico and the bankers that, "Well, actually, he's not been as bad as we expected." What do you mean by that? Well, he hasn't actually raised taxes, he hasn't spent money on the fiscal balance that the government doesn't have. In fact, in many ways, he's been conservative as a leader in terms of small government, fiscal hawkishness. Mexico's debt to GDP is 50% right now and has stayed stable despite the pandemic. That's caused some challenges in terms of the ability of Mexico to make large scale investments into its domestic economy, given the pandemic. But nonetheless has made the business community feel more comfortable with him.
Instead, there's been a focus on tax collection and on reducing government expenditure. So much so that there's a problem on execution, weakening and inefficient, but nonetheless, comparatively talented civil service in Mexico. It's a reason why when you go to the World Bank or the IDB, you see so many former Mexico technocrats in the bureaucracy, because they were always seen to be some of the most talented from all of the Western hemisphere. Overall, I would say the Mexican economy is positioned to do quite well over the coming, let's say five, 10 years.
The domestic political issues are the biggest concerns. In particular, President Lopez Obrador going after his country's electoral institute, trying to take away some 80% of their funding, which would, if it went through, undermine the ability of Mexico to have free and fair elections. And there's really no justification for that decision. AMLO claims it's because he actually won the 2006 election, which was razor thin decided against him. And it's also why he was quite late to congratulate Biden on his 2020 win, you might remember that. And even some of his own supporters are befuddled by it, since AMLO's Morena party is likely to win upcoming elections anyway. Unlike Trump, Erdogan, Orban, Bolsonaro, all of these leaders, it's not like AMLO needs to gut Mexico's democracy in order to keep his party in power. But the other point is that he's also likely to fail at this so-called electoral reform as Mexico's Supreme Court will rule against the so-called reform. And there've also been massive demonstrations against it across Mexico, largely from the middle and upper classes, showing the power of Mexico's civil society which is hardly going away. This is not going to become an autocracy, just as Brazil hasn't, just as the United States hasn't.
And when he fails, he's almost certainly going to call his supporters against the corrupt Supreme Court, as he would have it, all of which does undermine rule of law in the country. I will say that I am less worried about this than some in the same way that I was less worried about January 6th in the US as not a coup, or January 8th in Brazil as not a coup and not able to fundamentally undermine democracy in these countries. In part because I fully expect AMLO will be out after his single constitutionally mandated six-year term, and I also think that either of his potential Morena party successors won't have the same charisma or capacity to pursue these sorts of policies.
But also, and here I think this isn't appreciated by many of AMLO's opponents, I do think that there are real issues here. I mean, AMLO is broadly skeptical of all sorts of, as he calls them, neo-liberal conservative elites, that's a mouthful, and their institutions, because they've had enormous access and influence across the board historically, including in the judiciary. They really could shape policy or stop initiatives, given their influence over all branches of government. There has been corruption. There has been a lot of corruption in the distribution of social benefits, in influence over Congress and legislation in procurement processes. Tax authority, where the Mexican government had been clearly letting companies off the hook, which AMLO has tried to change at least somewhat successfully. And I think part of the elite anger at this administration is that the elites can no longer influence the regulatory and legislative policy as they could before. And while the judiciary is an important and necessary check on AMLO's power, it's also hard to argue that economic elites haven't had undue influence on Mexico's court system. Both of those things are actually true.
There are other places I could spend time, there's been very limited success in curtailing violence in Mexico, dealing with the drug cartels. That's a long history of failure in Mexico and I don't come away any more optimistic from my trip in Mexico this week. I am a little bemused by the criticism though, that AMLO doesn't travel internationally enough. And it's true, he almost never leaves the country. He's been five years in office now, I think he's been to the United States four times, each time for one day. And he made one trip to Central America and Cuba and that's it. I mean, for the head of a G-20 economy, that is unheard of. And he also doesn't really care.
But I want to say it's not like there's any particular debate about Mexico's development model. It's not like people are saying, "Oh, maybe we need to work more with Europe or hedge with China." AMLO has zero interest in that and indeed, one of the first things he mentioned to me was his concern that China's growth would unbalance the geopolitical order and lead to conflict. There's something that underpins this that's very important, which is last year, Mexico's trade with Texas was five times its total trade with all of Latin America.
Unlike Brazil, unlike other developing countries where there's lots of discussion about potential competing development models, there really isn't with Mexico. It is a US and USMCA focused model and I think appropriately so. Meanwhile, AMLO has been traveling relentlessly across Mexico by car or on commercial airlines, meeting with the Mexican people. And he's the first president in a very long time that's spent that kind of time with Mexico's poor across the country and that's a big piece of his popularity, which has been quite high over the course of his entire term. I personally would like it if he would travel more because I care about foreign policy. But in the context of Trump's America First or Biden's US foreign policy for an American middle class, you can certainly understand that you can have more sympathy.
And I think about my own friend, Iván Duque, who I've known very well for years now, the former Colombian president, he's loved by the Washington establishment, but ultimately was very unpopular in Colombia, in part because he was seen as being kind of a creature of Washington consensus and not as interested in Colombia. And I think AMLO completely gets that in today's geopolitical environment, that just doesn't play.
I think the right comparison for AMLO on the global stage is Modi, India's prime minister, in terms of he's from the underclass. In the case of Modi, from the under caste, focuses on the underclass and wants to take on colonial elites and their institutions that have always been unpopular with the average people in the country. That includes the independent media and NGOs which are viewed, even if somewhat unfairly, as educated elites that don't care about the people and haven't historically.
By the way, when I mentioned the Modi comparison to AMLO, he immediately liked it. In fact, recognizes that he doesn't do as well in Mexico as Modi does in India because Modi also has the Hindu nationalism call card that he can play and does play, which AMLO is certainly not doing in terms of Catholicism and the role in Mexico's government institutions. Now, of course, that's a mixed bag. Because while Modi has become an essential friend to the United States as a part of the Quad, the relationship can only get so close and there is that tension between the United States and Mexico, and the West and Mexico accordingly.
But I do think that putting all of that in context gives you a lot more balance about what's happening in Mexico right now and Mexico's role with the US and Mexico's role that it doesn't have with a lot of the rest of the world than we've been reading in a lot of the media, and as a consequence, I thought it was really interesting to talk about it.
Anyway, that's it for me and I'm delighted that I've had a chance to get back there and I'm sure I will be again real soon, and I hope everyone is well. Talk to you soon.
- What We’re Watching: Biden in Mexico, Japan's Kishida on tour, Ukraine’s eastern flank ›
- What We’re Watching: Biden at the border, Three Amigos Summit, China’s reopening ›
- Immigration a Biden priority at Three Amigos Summit ›
- Can AMLO live up to Mexico’s critical moment? Jorge Ramos discusses ›
- The Graphic Truth: Bracing for a surge at the US-Mexico border ›
- AMLO wants a popular successor - GZERO Media ›
- Why Mexico is a key issue in the 2024 US election - GZERO Media ›
Northern Ireland trade deal ends Brexit but not UK's economic woes
Ian Bremmer shares his insights on global politics this week on World In :60.
Will the UK finally move past Brexit now that a Northern Ireland trade deal has been resolved?
Oh, it's only been, what, six years. My God. And Brexit finally concluded now that Prime Minister Sunak has taken on his own Conservative Party and said, "No, we're just going to finally move on this." And people are sick of the economic challenges, that's, in part, why Truss got washed out so quickly as former PM, and it's also why he had the space to get this done. It means that you're not worried about the so-called hard border between Northern Ireland and Ireland, and therefore, between the UK and the EU, and it means that the Brits can move on. But moving on, of course, still means that they no longer have integration with the world's largest common market, and that means that their performance economically will continue to drag below all of the rest of Europe and the United States, and that's really unfortunate. It's a massive own goal.
Will recent violence in the West Bank escalate into something more?
I expect so. I mean, keep in mind that you have no effective governance for the Palestinians in the West Bank or Gaza, you've got an incredibly right-wing coalition government led by Bibi Netanyahu, with only the thinnest of margins to keep the coalition intact, and no interest in moving forward on a two-state solution, and a great deal of interest in taking more land from the Palestinians. I saw an op-ed written in Haaretz, an Israeli center-left newspaper, just the other day, that claimed that Netanyahu was pushing forward a policy apartheid. You don't see that kind of commentary in Israeli newspapers about their own government. This all implies a lot more fighting between Israelis and Palestinians. The Americans inflectionally pushing from the sidelines, nobody really prioritizing the conflict or the issue, either in the region or in Washington, and certainly the Israelis and the Palestinians not having remote political interests try to back down and come to the table. All of that implies a lot more fighting going forward.
Why are Mexicans protesting AMLO's electoral law change as well?
Because he's trying to undermine the influence of the electoral commission. New legislation being put forward, some of it seemed to be against the Constitution and pushed back by the Supreme Court in Mexico, but some of it moving forward. People are angry, just like they have been in lots of countries, lots of democracies, where democratic institutions are getting weakened. For example, in Israel on the Supreme Court, you've seen massive demonstrations. That's basically what you're seeing right now in Mexico, an awful lot of people turning out on the streets, as we saw last weekend, against an effort to undermine checks and balances in a democratic country. The good news is that these democratic institutions are stronger and more resilient than a lot of the headlines would have you believe.
Immigration a Biden priority at Three Amigos Summit
Ian Bremmer shares his insights on global politics this week on World In :60.
What's on the agenda at the Three Amigos Summit?
Well, immigration is very high only between the US and Mexico. But still, the fact that Biden is willing to use this pandemic era clause to try to keep migrants from coming to the United States was not on my Bingo card six months ago. A lot of progressive Dems are unhappy with him, and a lot of conservatives are saying he's doing too little, too late, but nonetheless does recognize that he doesn't win any votes on balance by having large number of illegal immigrants continue to come to the United States. Also, a whole bunch of new NAFTA stuff, especially trade relations on energy with the Mexicans, Americans, and the Canadians, pretty unhappy with what AMLO has been doing on that front.
Is Russia on a path towards becoming a failed state?
No, I wouldn't say that at all. Their economy has contracted by 4% in 2022 will; contract by more this year over time. It's going to take a bigger and bigger hit because they've lost human capital and because they can't continue to do business with Europe, which is where most of their trade was happening. But still, they are an immensely wealthy and well positioned geographic country with all of these natural resources that the world needs and will need more of over time. So it's hard to imagine them becoming a failed state. They are instead becoming a rogue state.
Will banning public Palestinian flag flying lead to further conflict in Israel?
Absolutely. It's kind of funny. It used to be the case that the Israelis considered that the Palestinian flag was a militant flag, for Hamas or for Hezbollah, and so it wasn't allowed to be flown. That's no longer the case and wasn't true after the Oslo accords were signed. But now the new Netanyahu hard right coalition government has decided they're going to make it illegal to fly it once again. They also cut off a whole bunch of tax revenues that are supposed to go to the Palestinians. They're squeezing them hard, ostensibly in response to some Palestinian moves at the United Nations to embarrass Israel. But more broadly, because this is an Israeli government that is much less interested in engaging in negotiations and trying to create a peace process with the Palestinian. So yeah, it's going to lead to more conflict, to more violence, and the only thing I can say is that it's just not a priority for most of the countries in the region, so it doesn't drive much attention.
US-Iran World Cup sportsmanship amid political tensions
Ian Bremmer shares his insights on global politics this week on World In :60.
How did Iran's attention in the World Cup impact protests at home?
Well, I mean, it certainly didn't slow them down any. When you see the Iranian national team first refusing to sing the national anthem and then singing it as woodenly and non-passionately as humanly possible because they've been threatened, and threatened about their families at home if they aren't singing it, that's a hell of a message to send to the Iranian people. And the fact that this country does not reflect its regime, a team does not reflect its regime, it's just extraordinary. And also, I just have to say that all of the pictures and the videos we've seen of the Iranian team and the American team actually coming together, the Americans consoling the Iranians, who have been under such massive stress and crying, and I mean, you can't even imagine performing at that level on the global stage, given the level of additional political pressure and danger that they're actually under. My heart goes out to those guys, and of course to the Americans for doing such a great job representing our country.
Will protests force Xi Jinping to finally abandon China's zero COVID policy?
No, not at all. First of all, those protests are largely already in the rear-view mirror. I do not expect we will see a reprise of them at that size in the near future. Certainly not with people calling for Xi's removal. Big consequences for that going forward. And I think a lot of people understand that. But this also means big consequences for the Chinese economy. And ultimately, difference in somewhat looser interpretation of implementation is very different from, we're stepping away from zero COVID. They're not ready to do that yet. They won't do it yet. And so Chinese growth is still going to be very slow. China's social anger at these policies is still going to be something difficult they're going to have to deal with.
Why is Mexico and the US fighting over corn?
Well, apparently it's because Lopez Obrador is not willing to allow GMO corn from the United States to come in. Now, half of Mexico's corn apparently comes from the United States, and this would be a really big challenge, both for the relationship as well as for Mexican food demand. The Trump administration tried to push AMLO on it, kind of failed. Biden administration pushing AMLO on it, kind of fails. So as a consequence, it's likely to be going towards USMCA, the Mexico Canada deal, into arbitration. And nobody likes to see that, but that's where we are.
- World Cup heats up Argentina’s presidential race ›
- World Cup politics go way beyond Qatar ›
- Great Satan on the pitch, big troubles at home — Iran's World Cup dilemma ›
- Is the Iran nuclear deal dead – again? ›
- Will politics or soccer win Qatar's World Cup? ›
- Why Iranians celebrated their soccer team’s World Cup elimination - GZERO Media ›
Can China lead on Russia/Ukraine peace?
Ian Bremmer shares his insights on global politics this week on World In :60.
Was the G-20 a success?
Not really, in the sense that there was no effective communique, the ball was not moved on serious needles as a G-20. On the other hand, the G-7 that met within the G-20 was certainly a success. Following on all these Russian attacks on Ukraine, you have even ever more alignment between the United States and its allies on the global stage. That's certainly a useful thing to maintain, especially as people are saying, "Oh, it's going to crumble. Oh, they're going to peel off."
What would Russia/Ukraine peace negotiations look like with China leading?
Well, they would probably be pushing towards a resolution and settlement that would be much more of a territorial agreement between the two, somewhere in the middle of what the Russians want and have taken, and where the Ukrainians would want to get back to. No one in Ukraine is going to find that remotely acceptable. So number one, I have a hard time imagining that Ukrainians would accept a China-led negotiation. Remember, the Chinese have not actually condemned the Russian invasion so far, though they do support Ukrainian territorial integrity. I think this was French President Macron kind of deciding to throw this out there publicly all by himself, not something that the Americans are supportive of.
Is Mexico's democracy crumbling under AMLO's leadership?
No, not at all. I mean, certainly he wants to have more party control of a lot of democratic mechanisms, but he's not able to make big constitutional changes. The party doesn't have that level of control and neither does he personally, so the country's a democracy and he's still quite popular, but the next Morena president is going to be less popular than AMLO was. Then I expect you can get back to a competitive democratic landscape in Mexico in short order.
- Ukraine throws wrench into China-Russia friendship ›
- What We’re Watching: Trump’s 2024 plans, G-20 & Basquiat in Bali, AMLO vs. Mexican democracy ›
- What We’re Watching: China’s party congress, US-Mexico migrant deal ›
- What We're Watching: Ukraine won't negotiate, AMLO busted spying, North Korean missile diplomacy ›
- China to shake up Russia-Ukraine war - GZERO Media ›
Mexican President Andres Manuel Lopez Obrador.
Hard numbers: AMLO wins small in recall, Jakarta students protest, Ukrainians dodge the draft, we learn to do nothing
90: Mexican President Andrés Manuel López Obrador (AMLO) got the support of 90% of voters in Sunday’s recall referendum. The catch? Turnout was just 18% of eligible voters, less than half of the threshold for the referendum to be legally binding. AMLO’s term ends in 2024, and he cannot run again.
6: Six police officers in the Indonesian capital of Jakarta were wounded in their attempt to control a protest by hundreds of students angry over rising food prices and rumors that two-term president Joko Widodo may be hatching a plan to exceed constitutional term limits.
15,000: While the vast majority of Ukrainian men aged 18 to 60 have complied with general mobilization laws that prohibit them from leaving the country, some draft dodgers have paid up to $15,000 to be smuggled across the border to safety in the EU, according to the New York Times.
Flags of the U.S., Canada and Mexico fly next to each other in Detroit, Michigan, U.S. August 29, 2018.
What We’re Watching: Three Amigos reunion, Taliban are broke
The "Three Amigos" at the White House. On Thursday, Joe Biden will host the first US-Mexico-Canada summit since 2016, when Donald Trump scrapped the regular "Three Amigos" gathering, as it's known. This year the trilateral summit will focus on deepening economic cooperation among the three members of NAF— sorry, the "USMCA" free trade area. But expect Biden to get an earful from Canadian PM Justin Trudeau and Mexican President Andrés Manuel López Obrador about the "Buy American" aspects of his Build Back Better agenda, which could hurt Canadian and Mexican exporters. In particular, the Canadians and Mexicans are worried about Biden's plan to give tax credits to US-made electric vehicles. It's another example of how green policies can often raise red flags about protectionism as countries vie for leadership in climate-friendly technologies. We'll be watching to see how the three leaders iron out their differences, and also whether Steve, Chevy, and Martin show up for laughs.