Antonio Navalón
Last week, Mexico’s Secretary of Finance, Rogelio Ramirez de la O, met with investors in London. It is not very difficult to imagine what the questions were or the main reason why the official attended the meeting in the British capital. Naturally, those who have placed their trust in the form of investment in the country had concerns that required clarification or explanation to have peace of mind, certainty, or at least the idea that their money is or will be safe and in good hands.
Considering recent events in national life, there were issues that clearly needed to be clarified. First, political hegemony, polarization, and the method of eliminating the enemies’ political territory. Second, the design and formulation of a judicial reform that places in the same hands those who point out all the directions of the country the resolution of how the great problems that could arise from the point of view of business, freedoms, or the maintenance and preservation of the Constitution should be raised, understood, and solved.
One of the significant problems that we are having, which will become clearer as we go deeper, is that when we talk about defending the Constitution, the immediate question is: defend which Constitution? The one that was de facto abolished by the qualified majorities of the Congress of the Union? The one that allowed such scandalously democratic voting levels that they could perfectly well, without much debate, produce a change and create a Constitution tailored to the interests of the incumbent president in office?
Having seen and analyzed recent events, as an investor, it is necessary and reasonable to ask oneself what the panorama and context that one has when one comes to our country and one’s investment is not protected or insured by some solid mechanism or instrument -such as the CUSMA/USMCA/T-MEC- that provides peace of mind, but, above all, certainty. However, today, that certainty does not exist. It inevitably generates doubts in anyone who wants to put their money under the protection and care of our country’s socioeconomic and political dynamics. Hence, there is a need for clarifications and visits to calm investors as much as possible.
We need limits. But not only for the actions or exercise of power but also to have an image of how bad or good the country’s reality can be. We need limits that ensure certainty in applying and respecting the country’s legal framework. Limits allow us to create and develop counterweight mechanisms that prevent power from falling into a single person’s hands and guarantee the respect and safeguarding of the all-important separation of powers. Without limits, catastrophe is in the hands of the imagination and the inability to act of those who govern us. History has taught us that when one is free to do whatever one wants, it is better to have a sufficiently developed instinct of conservation that is conscious of pointing out the limits since, if one does not point them out on one’s own initiative, inevitably the very erosion of power and the crises that will come will set limits that will put at risk all plans and all that has been achieved so far.
The Secretary of the Treasury, a very reputable financial professional who often starts his day on the back of a horse, has a clear perspective on the country’s reality. He is aware that the world and Mexico’s financial landscape is not only about BlackRock or Blackstone or sourcing investments from a few – albeit significant – companies. Ramirez de la O knows that the world is more complex than that and that the truth is that since the pandemic, the world of capitals has reorganized in such a way that we need to readjust our way of seeing and facing the economic and financial reality independently of all capitals, the clean ones, the dirty ones, the ones that are better or worse. An example is the economic phenomenon and all the influence China exerts on the world. A country that, despite crises such as its real estate crisis, cannot forget that it is currently the main creditor of the U.S. debt.
In the four years since the COVID-19 pandemic broke out, we have witnessed phenomena such as the reconfiguration of the capital markets and the emergence of entirely new developments. Who would have thought that, from the birth of the Ukrainian war, the Russian economy would rearm and produce the benefits it has made, in part because of the sanctions imposed? Who would have thought that such an aggressive management model as the one being implemented by India would be so successful that it would place them as one of the world’s leading economic powers?
Today, large countries, empires—both those that exist and those that are about to become empires—and those who govern them must necessarily define limits. In this sense, President Claudia Sheinbaum’s government would do well to know and not forget that the most intelligent game they can play is to find a way to create and develop their own limits.
Anyone who lives and knows the history of our country knows that the Federal Pact practically does not exist. They know that the budgetary concentration in just a few hands -or at least in the hands of those in the National Palace- is total. It is aware that, since laws do not matter or limit us, we can create a situation that puts us in a serious conflict at any moment.
It was guaranteed and repeated that Mexico would assume and comply with its commitments once the international arbitrations had failed. This is new. During or immediately after the pandemic, when the scale of investment that the Mexican State would need was explained, President Andrés Manuel López Obrador did not allow any negotiations to be opened, and the message was clear: We will pay nothing. Today, that has changed, and fortunately for the country’s future, they have realized that this position is untenable. In the meantime, we need to clarify the game’s rules and, above all, know what Sheinbaum’s Mexico wants to be. Does it want to be a country like Libya, outside the international order? Or, once and for all, will it assume its role to which it is called as a power belonging to the most important economic bloc in the world?
Mexico has everything; it has always had everything. Today, we once again have the opportunity to take advantage of such essential tools as the CUSMA/USMCA/T-MEC and others presented by the global panorama that would allow us to propel us towards the path of growth and development. To achieve this, we will not only have to develop a plan that will enable us to have a healthy and stable economy or guarantee the legal certainty that will allow economic and social stability inside and outside the country. The first step will be to establish clear and objective limits to achieve this.
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