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Abstract
This article discusses the policy choices of Left-Centre president Andres Manuel López Obrador (known as AMLO) in Mexico in the context of the neoliberal institutional legacy that his administration inherited. The persistence of neoliberalism under the AMLO government is manifest in the monetary and financial policies pursued—particularly in the context of the pandemic—that merge successive neoliberal approaches with socioeconomic regulation, namely the Washington, the post-Washington, and the Wall Street Consensus.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 The political party National Regeneration Movement, or MORENA, was first founded in 2011 as a non-profit, grassroots organization to protest political corruption and electoral fraud. When AMLO, as a candidate of the Democratic Revolution Party (Partido de la Revolución Democrática, or PRD), lost the 2012 presidential election, MORENA became a political party under AMLO’s leadership. During his 2018 presidential campaign and throughout his administration, AMLO has claimed that his party’s goal is to implement Mexico’s Fourth Transformation (La Cuarta Transformación, or 4T). The first three historical transformations refer to Mexico’s independence from Spain in 1821, the liberal reform struggle for a secular state in the 1850s constitution, and the 1910 revolution. Historically, all of these transformations significantly disrupted power relations and established more inclusive institutions. As such, the Fourth Transformation, according to AMLO, is a political project to break with Mexico’s neoliberal past. Ackerman, “Progressive Reformist;” Hackbarth, “AMLO Has a Project to Transform Mexico.”
2 John Hopkins University, Coronavirus Resources Center, Global Map.
3 See geospatial data from the Mexican National Council for the Evaluation of Social Policy examining the relationship between poverty and deaths from COVID-19. CONEVAL, Visor Geoespacial.
4 Reuters Staff, “Spend as Much as You Can.”
5 While promoting fiscal restraint, the Washington Consensus also encouraged Mexico’s further integration into global financial markets through debt securitization. Indigo Staff, “Urzúa: la 4T pasa el examen del neoliberalismo;” Veltmeyer and Bowles, “Critical Development Studies.”
6 Bresser-Pereira, “New Developmentalism.”
7 Gabor, “Wall Street Consensus.”
8 Banco de México, “Bank for International Settlements.”
9 IMF, Policy Responses to COVID.
10 Van Waeyenberge, “Post-Washington Consensus”
11 Gabor, “Wall Street Consensus,” 429.
12 Gabor, “Wall Street Consensus,” 429–35.
13 Banco de México, “Tasas de interes,” “Acumulacion de reservas internacionales,” “Tipo de cambio.”
14 Presidencia de la República, Política económica en tiempos de coronavirus.
15 Presidencia de la República, “Presidente Lopez Obrador declara.”
16 Del Río Lugo, “Hacer más con menos,” “Lustig and Mariscal,” “Brazil, Mexico and COVID-19.”
17 IMF, Mexico: 2020 Article IV Consultation, 53.
18 IMF, Mexico: 2020 Article IV Consultation, 53.
19 Díaz, Aurora, and Stillman, “Mexico’s Low Key Stimulus Plan.”
20 Presidencia de la República, “Presentan proyecto de presupuesto”
21 Secretaría del Bienestar, “Programas prioritarios.” https://www.gob.mx/bienestar.
22 For an insightful critique of this program, please see Centro de Estudios para el Campo Mexicano (CECAM), Comunidad y autonomia.
23 In the absence of enough branches to distribute resources, the Ministry of Wellbeing had to rely on two private banks. Villegas, “El Banco de Bienestar.”
24 Similar critiques of the AMLO administration have also focused on the rural sector. The critical analysis of “Sembrando Vida,” is a case in point. This is a federal government tree-planting program that aims at providing employment and promoting reforestation in Mexico. Yet this program does not address the root causes of unemployment, exploitation, and environmental degradation in the rural sector: land dispossession, excess use of water by large agricultural and industrial companies, and disruption of ecologies because of resource extraction and infrastructural projects. See Centro de Estudios para el Cambio en el Campo Mexicano, Comunidad y autonomia.
25 Reis, “Bank of Welfare.”
26 Rankin, “Governing Development;” McKenzie and Louth, “Neoliberal Production;” Soederberg, Debtfare State and the Poverty Industry, 168–91.
27 Banco del Bienestar, Información financiera.
28 Secretaría de Hacienda y Credito Publico, “Fitch Ratings tatifica,” “Agencias calificadoras,” “Moody’s Rating Agency Ratifica.”
29 Previous neoliberal presidential administrations already had plans to build railroad infrastructure in Southern Mexico. This was most evident in the Plan Puebla Panama in the early 2000s. Reuters Staff, “BlackRock interesado.” Muñoz Martínez, “State, Capital and ‘Second Nature.’”
30 Dayen, “How BlackRock Rules the World;” Redacción, “AMLO tiene reunión con titular de BlackRock.”
31 The Ministry of Finance exchanged long-term public debt in Mexican pesos from a select number of investment and banking institutions such as Banamex-Citibank, HSBC, and JP Morgan. In return, these firms received short-term debt from the Mexican state authorities. In that way, these market participants were able to claim their money back from the Mexican Ministry of Finance in a shorter period, increasing the former’s liquidity. In addition, the Mexican central bank temporarily reduced the amount of money that commercial banks had to place with the Bank of Mexico. IMF, Mexico: 2020 Article IV Consultation 8; García and Rafael, “Primary Dealer Systems in Government;” O’Boyle, “BlackRock Nabs $460 Million in ETF;” Secretaría de Hacienda y Credito Publico, Reporte Anual 2020, 2021.
32 Gabor, “Wall Street Consensus,” 432.
33 These operations include repurchasing agreements (repo) and debt swaps. A repo is an operation where one party sells securities to another and agrees to repurchase the securities later. In this way, firms can obtain liquidity from the Mexican central bank and then buy the securities back, continuing to receive yields. Through debt swaps, financial institutions deliver trading instruments that have lower liquidity in exchange for highly liquid local public debt in pesos. Banco de México, “Medidas adicionales.”
34 Gabor, “Wall Street Consensus,” 448.
35 IMF, Mexico: 2020 Article IV Consultation, 8.
36 Pozsar, “Shadow Banking: The Money View.”
37 Secretaría de Hacienda y Credito Publico, Reporte Anual 2020.
38 UNDP, “Historic $890 Million Sustainable.”
39 Gabor, “Wall Street Consensus,” 433.
40 Rodríguez García, “AMLO refrenda llamado.”
41 Sinclair, McHugh, and Roy. “Social Innovation, Financialisation and Commodification.”
Additional information
Notes on contributors
Hepzibah Muñoz Martínez
Hepzibah Muñoz Martínez teaches in the Department of History and Politics at the University of New Brunswick in Saint John, New Brunswick, Canada.