Ricardo Pascoe Pierce
Marcelo Ebrard has forgotten Karl Marx’s basic premise: economic policy moves the world. Everything political is also economic. Historical materialism is based on that foundational premise. That is the ideological basis of his party.
It is relevant because Ebrard, as future Secretary of Economy, recently complained that Plan C’s political problems were being mixed with the economy’s performance. In essence, he said that foreign investors should not be concerned about the colonization of the Judicial Power by his political party, even though it would eliminate its independence as an autonomous power of the Mexican State, nor the elimination of the National Institute of Access to Information as an instance that would ensure transparency and the provision of information to the citizens. According to him, the economy works on other tracks, very independent from politics. The future President assures the same.
In its most recent edition, The Economist, a British magazine founded in 1843 to discuss trade liberalization issues, categorically denies Ebrard and Sheinbaum’s assertions.
It warns that investors are very nervous about the reforms that the Morenistas want to “give as a gift” to the President as a triumphant farewell to his six-year term. The destruction of judicial power and the elimination of autonomous regulatory bodies are an omen of disaster for an already dysfunctional economy with very low productivity. Added to this situation is the “rampant” problem of insecurity, which together paint a severe scenario for the future of the Mexican economy. Both The Economist and institutions such as the Bank of America warn, with a premonitory tone, of the proximity of the revision of the CUSMA/USMCA/T-MEC clauses as a whole. Although they do not say it explicitly, they insinuate that Mexico could be excluded from the CUSMA/USMCA/T-MEC as part of the North American market, leaving only the United States and Canada in that agreement or another that could be agreed upon.
If Mexico were to be excluded from CUSMA/USMCA/T-MEC, it would be because international capital does not believe the next Mexican government or the “verbal assurances” offered by Rogelio Ramirez de la O. There have been too many deceptions, too many times. And each deception costs investors, not the Mexican government—at least, not immediately. It will be the people who will pay, in the long term, the tax for the irresponsibility of the 4T.
The British magazine has very much in mind the grave mistake made by the British when they voted to leave the European Union. Today, the majority of the country regrets the Brexit decision. Behind its analysis of the questions of the popular vote on complex issues, but with populist fervor in the forefront, is the conclusion that decisions are made that are popular at the time but wrong and costly. Today, Britain does not have the political capacity to correct bad decisions and, therefore, tries to survive economically by stumbling from one mistake to the next.
Both The Economist and Bank of America see the possibility of the treaty being canceled in the three countries’ upcoming mandatory review of the CUSMA/USMCA/T-MEC. Therefore, they also do not see the right conditions for Mexico to take advantage of nearshoring as it could or should. Plan C throws away any possibility for Mexico to insert itself into the most important dynamics of the global economy.
To reinforce its pessimism regarding Mexico, The Economist shows a graph illustrating how foreign investment has fallen in the last year as a percentage of GDP to levels not seen for 11 years. This calculation includes new investment, reinvestment of profits, and business-to-business purchases. The drop in investment faithfully mirrors the drop in confidence about Mexico’s future.
The British magazine shows that Mexico is at a real crossroads. It is being pushed by a populist enthusiasm that does not understand the long-term consequences of politicians’ decisions. They are reacting to the short term with anger, frustration, and opportunism, just as happened to the British with Brexit.
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