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López Obrador’s cost-cutting spree is transforming Mexico — and drawing blowback from bureaucrats

Mexican Air Force technicians work on a six-year-old Defense Ministry helicopter that’s part of a giant sell-off of government aircraft and vehicles by President Andrés Manuel López Obrador. (Mexican government)

MEXICO CITY — First to go was the presidential plane.

Next came the sell-off of ­official helicopters and bulletproof vans. 

Then the assault on Mexico’s “golden bureaucracy” really took off. Out went the chauffeur-driven cars. Gone was the private health insurance.

In just 7 1 / 2 months, Mexico’s leftist president has achieved the kind of cost-cutting revolution that conservatives in Washington can only dream of. Thousands of federal jobs have been eliminated. Overseas travel has been slashed. President Andrés Manuel López Obrador even refused to shell out the money last month to fly to the Group of 20 summit.

“We can’t have a rich government in a poor country,” he says.

But what started as a popular attack on official privilege has increasingly generated chaos.

Judges are rebelling over salary cuts. Public hospitals have canceled surgeries. Forest fires have blazed out of control, for want of more firefighters.

The cost-cutting is perhaps the clearest sign yet of the radical vision of López Obrador, who won election last year promising a “fourth transformation” of Mexico — a shift on the order of the 1910-17 revolution.

He’s no Hugo Chávez, the late Venezuelan leader who said capitalism “leads us straight to hell.” López Obrador backs free trade and promises a balanced budget. But he is determined to reorient Mexico’s government, slashing bureaucratic expenses so he can funnel money to other areas, including new programs for the poor.

It’s a vision that goes well beyond fiscal austerity, said Lorenzo Meyer, a prominent historian here.

“The whole idea of Mexico is different,” said Meyer, who supports the president.

López Obrador, who took office in December 2018, still enjoys approval ratings above 60 percent. But his budget crusade has revealed a tendency to centralize power, worrying some in this country that lived through decades of authoritarian rule.

And the Mexican government, never famous for efficiency, risks becoming dysfunctional, analysts warn.

“The bureaucracy is not yet collapsing, but it’s in lousy shape,” said former foreign minister Jorge Castañeda, a critic of López Obrador. “Because there’s no one there.”

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From the start, López Obrador cut a starkly different figure from his predecessor. Enrique Peña Nieto was so stylish that the famed Beverly Hills boutique Bijan designed a wristwatch in his honor. But his term was stained by scandal, including his wife’s purchase of a $7 million mansion from a government contractor.

Andres Manuel Lopez Obrador was sworn in as Mexican president Dec. 1, promising a radical change in a country struggling with violence, poverty and corruption. (Video: Reuters)

After the rumpled López Obrador won the presidency, he invited journalists to peek into his bedroom closet. There were just eight suits. He’s been mocked for his scuffed shoes. He’s turned the grounds of the presidential palace into a public park, and he flies economy, slogging through airport lines with all the other poor schleps.

He’s auctioning off dozens of government airplanes, helicopters and vans, in a sort of garage sale of privilege. Several of the aircraft were tied to scandals — such as the helicopter that whisked a senior official to his country house in 2015.

That kind of abuse was common in a country once run by a Spanish colonial elite and later subject to 71 years of one-party rule. The saying among Mexican politicians: “To live outside the government budget is to live in error.”

López Obrador is determined to end that.

He slashed his own salary by around 60 percent, to the equivalent of $5,600 a month. And it was more than a symbolic gesture: His party passed legislation to ensure that federal employees didn’t earn more than the president. The platoons of aides that once swarmed around senior officials have vanished.

López Obrador’s party, which holds a majority in the National Congress, has thrown itself into the austerity campaign with a fervor that would have impressed a medieval Franciscan. The lower house has whacked 3,000 of its 7,400 jobs, said Mario Delgado, the ruling-party leader.

“We haven’t spent any money on paper,” Delgado said. That’s because workers discovered 17 storage closets filled with paper, he said — a sign that someone might have been getting kickbacks in exchange for buying way too many office supplies.

This month, Mexico’s Senate followed the lower house in approving a bill that would cement many of the cost-cutting measures into law. 

“People got used to wasting government resources,” Delgado said. “Now we need to get used to an austere state.”

But the goal, he said, isn’t to shrink Mexico’s $300 billion federal budget — it’s to redirect spending toward other priorities. More investment will go to Pemex, the national oil giant. López Obrador has launched ­major programs to provide jobs and scholarships for young people and boost pensions for the elderly.

So far, López Obrador says, he’s saved more than $6 billion in government purchases and more than $500 million from canceling bureaucrats’ private health insurance and savings plans. 

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Meyer, the historian, said the plan reflects López Obrador’s desire to change the very relationship between the government and the people. He recalled a conversation he had in the early 2000s with López Obrador, then the mayor of Mexico City.

It’s hard to change institutions in a few years, the mayor said, in Meyer’s telling. But López Obrador promised that, when he left office, the poor would see the government as theirs.

That’s a cultural change of historic proportions, Meyer said. 

Of course, it has its costs. Meyer’s 35-year-old son, Roman, serves in López Obrador’s cabinet as minister of agrarian and urban development. He lives with his wife and son in a 1,000-square-foot apartment. He rides his bike to the presidential office.

Roman Meyer said his ministry has cut about a third of its personnel.

The austerity “forces us to be more creative in redesigning administrative processes,” he said, cheerfully. He works 16 hours a day.

His father is stunned at how small his son’s staff is. 

The situation, he said, is ­“absurd.”

For Jaime Nieto, director of the government-owned children’s hospital in Mexico City, the breaking point came in late May. Already, the doctor had suspended overtime, dismissed dozens of contract workers and cut back on tests for sick patients. His own salary had shrunk by 40 percent. 

Now, he learned, he’d have to cancel half of all operations requiring anesthesia.

“I’ve worked 40 years at this hospital,” said the white-coated doctor, sitting in an office that was dustier than usual, due to a new hole in the janitorial budget. “I’ve never lived such a stressful, worrying situation.”

Around the country, hospitals revolted. The head of the social security system quit, saying the controls on health spending were “inhumane.” 

Within days, the government relented, freeing up some funding. Nieto didn’t have to drastically reduce surgeries after all. But he still lacks money for nurses and maintenance.

Meanwhile, the hospital’s Internet capacity has been slashed in half.

“Everything is still uncertain,” the doctor said.

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One of the most startling cutbacks has been in international travel. Government employees were informed in early May that they needed permission from the president’s office before taking any trip abroad.

About two weeks later, López Obrador boasted that he’d gotten 100 requests — “and I only authorized 20.”

Among those denied: Maria Novaro, director of Mexico’s national film institute. She was attending the Cannes Film Festival when she got the word. She promptly flew home from France. 

The order sparked panic at the government-funded Center for Scientific Research and Higher Education in Ensenada, 65 miles south of the U.S. border. Researchers there were used to getting academic journals at a post office box in San Diego. Worried they would need presidential authorization for their twice-a-week mail runs, they hired a private courier service.

The regulation was later eased. Still, the international travel budget for federal workers was cut by 50 percent.

More than 3,000 scientists and academics have signed a letter to López Obrador protesting drastic cutbacks at government research centers. In some offices, energy-saving measures are so severe that employees aren’t allowed to charge their cellphones.

“This feels like the dismantling of a scientific network that took decades to build,” said Juan Martinez, a biologist at the Institute of Ecology.

But if the scientists reflect one vision of Mexico — a country with a growing middle class and world-class researchers — López Obrador is focused on another. He recently defended the austerity program, reminding journalists that the indigenous Tarahumara in the north were lucky to have a teacher with more than a sixth-grade education.

“I want with all my soul — and this is why we’re taking these measures — for poor children to eat before they go to school,” he said. “This is equality.”

The government says some of the criticism of its efforts is exaggerated. For example, some of the institutions protesting the cuts — such as the hospital system — have had financial problems for years. 

Viridiana Rios, a Mexican political scientist, said the fundamental problem isn’t that the government is wasteful, but that it lacks resources. Mexico’s rate of tax collection is among the lowest in Latin America — and López Obrador has promised not to raise taxes.

“We are a country that has always benefited the wealthy. The result is a tiny, skinny state,” said Rios, a visiting professor at Harvard.

“López Obrador’s motto is that you can’t have a rich government in a poor country,” she added. “What I say is that you can’t have a rich country without a functioning government.”

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