James R. Jones, U.S. ambassador to Mexico from 1993 to 1997, is chairman of Monarch Global Strategies, a consulting firm that advises U.S. companies on doing business in Mexico and elsewhere in Latin America.
On Sunday, Mexicans chose Andrés Manuel López Obrador, known nearly universally as AMLO, as their next president. López Obrador has been referred to by many Mexicans and some analysts of Mexico as anti-business and anti-American. In reality, he is neither.
I have known López Obrador for 25 years, since I was U.S. ambassador to Mexico. The words that best describe him are pragmatic and driven. He is driven by a desire to improve the living conditions of the half of Mexicans who remain poor.
Over the years, I’ve discussed and argued with AMLO many times over various issues. While he may have preconceived notions about a correct approach (as all of us do), he will listen and sometimes be persuaded by different facts and opinions. He is not afraid to change his position on an issue if he is convinced that there is a better way. Consider: After seeing improved economic opportunities for Mexicans, he has come to support the North American Free Trade Agreement and other free-trade agreements despite his earlier criticisms.
It’s true that López Obrador is wary of the close and, in his view, corrupt relationships in the past between certain powerful businesses and the old Institutional Revolutionary Party (PRI) political regime, which he opposed during his developing political career. But AMLO is at heart a pragmatist. He recognizes that to help his primary constituency — the poor and disadvantaged — he must grow the economy, and he understands that economic growth comes from a competitive private economy, not from government. The redevelopment of the Zocalo, the historic center of Mexico City, was a public-private partnership with the two main actors being Carlos Slim, Mexico’s richest business leader, and López Obrador, then mayor of Mexico City. This project transformed the area, helping all levels of society.
López Obrador is clearly wary of President Trump and his rhetorical excesses and policies that negatively affect Mexico and Mexican citizens who live and work in the United States. The Mexican president-elect has also long opposed the imposition of economic and security policies on Mexico from abroad, typically emanating from the United States. Rather than being anti-American, AMLO is a nationalist who is highly protective of Mexican national sovereignty.
But López Obrador also recognizes that the economic, security and societal interdependence between the United States and Mexico mean that our two countries must work together to resolve shared problems. I am convinced that his policy emphasis on improving the domestic economy means he would very much work for a smooth relationship with the U.S. government.
While previously criticizing the constitutional energy reforms of President Enrique Peña Nieto’s government, AMLO now says he wants to restore Mexico’s hydrocarbon energy production, and he recognizes that he needs private capital to do so. His main concern is corruption, which was rampant in the past, and his team will closely audit this. He will also emphasize development of alternative energy, such as solar power. He recognizes that in energy as in other sectors of the economy, foreign investment is needed. Based on our discussions over the past year, I expect he will continue to respect the independence of the central bank, although that issue will have to be closely monitored by watching his appointments to the board. I also believe he will employ a conservative fiscal policy as he did while mayor of Mexico City, thus showing balanced and mutually supportive fiscal and monetary policies
Mexico is essentially a conservative, family-oriented country. But its people are fed up with decades of corruption and violence. These are the issues that got AMLO elected, and they will dominate the beginning of his administration. Still, while López Obrador’s rhetoric will highlight the plight of the poor, especially in the country’s south, below the radar expect him to promote economic growth through the private sector. Mexico’s poverty problem is too severe to be solved during his presidency, but he will strive to lay the foundation for a long-term solution. His aim is to instill hope for the next generation through major investments in education, health-care delivery and infrastructure development.
It will take time for AMLO and the business community to develop trust, just as developing an operational partnership with the United States will take some forbearance on both sides of the border. But both are possible if all sides park their harsh rhetoric and recognize that cooperation is needed if Mexico is to achieve its potential and be a strong partner for the United States.