So the media is still confused - or acting confused - about the new president of Mexico, AMLO. Funny, no one we talk to in Mexico is. The bias in the media when it comes to Latin America again shows itself, which will be the focus of another article. AMLO is the same AMLO he was back in 2006 when he was buddy-buddy (not just “an admirer of” dear New York Times) Fidel Castro and Hugo Chavez. And AMLO just demonstrated this by embarrassing Mexico in the international community with his support of Venezuelan dictator Nicolas Maduro.
Yes AMLO played the centrist game to get elected, and it worked well. Yet before he even had legitimate legal power as president he effectively derailed the multi-billion dollar Mexico City airport project and has continued to show his true leftist colors in his very short time as president with other snafus.
Does this mean that businesses should run in a panic for the Mexican exit doors? No. No? No, allow me to explain. AMLO is, to put it mildly, a fan of Communism and – perhaps more importantly – the 1 party dictatorship state Mexico was for decades under the PRI until the election of President Fox of the PAN party in 2000. But unlike Maduro he has the United States immediately across his northern border so nationalization of foreign businesses in the Venezuelan style is not an option.
And AMLO does truly want to create more jobs for Mexicans which can only happen on a large scale with USMCA, exports, FDI, foreign trade etc.
So foreign businesses and multinational corporations will continue to take advantage of Mexico’s quality / cost competitive advantages as China’s disadvantages continue to be exposed.
Middle Market Advisory LLC
February 1, 2019