The Impact of AMLO Win on the Mexican Economy
Andres Manuel Lopez Obrador, popularly known as AMLO, is no stranger to Mexican politics. He has already run for the office of President twice in the past. Both times, he has failed to secure the top job in Mexico. However, in 2018, it was AMLOs chance to create history. He has become the first left-leaning President in recent Mexican history. While voters were overjoyed because of AMLOs landslide victory, the businesses didnt seem too excited. This was openly visible in the reactions of the markets. The stock markets fell as the news of AMLOs victory spread. Similarly, the Peso also witnessed a fall in the currency markets. The dollar-denominated debt that the Mexican government has issued in the past also saw a downward trend.
The reaction of the businesses is understandable. AMLO has been advocating the merits of left-leaning policies. The last leftist Latin American leader was Hugo Chavez, who enjoyed a cult status in Venezuela. However, just a few years after his death, Venezuela is now in total chaos! It is on the verge of bankruptcy and hyperinflation is the norm. Businesses are afraid that AMLO and his populist policies might take Mexico down the same road.
In this article, we will have a closer look at what some of the policies proposed by AMLO are and how they might affect the economy.
AMLO, on the other hand, has been elected without the support of the business community. It is the 90% of Mexicans who live below the poverty level that have voted AMLO into power. Their sentiments are deeply hurt by Donald Trumps unflattering portrayal of Mexicans. Hence, they support AMLOs decision to stand up to America. AMLO has made it clear that Mexico will not do Americas dirty work of stopping immigrants from South American countries crossing into America. AMLO believes that Mexico should align its resources for the welfare of Mexicans. The business community does not agree with AMLO in this regard. They want to keep America happy at any cost. AMLOs policies seem counterproductive to them, and they are almost sure that AMLO will jeopardize their business interests.
It would be incorrect to say that AMLO is a socialist. In fact, he has a record of co-operating with local industry when he was the Mayor of Mexico City. However, AMLO is opposed to the corrupt practice of bowing down to the Americans. He believes that the nations resources are squandered away at the behest of the Americans. The benefits, on the other hand, accrue to very few people. It would, therefore, be fair to say that Trump has found his match in AMLO. With aggressive leaders on both sides of the wall, the risk of a trade war is imminent. However, the average Mexican is happy to salvage some pride instead of bowing down to American imperialism.
Authorship/Referencing - About the Author(s)
The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.