Mexico Frontrunner Taps Urzua as Proposed Finance Minister

(Bloomberg) -- Mexico’s leftist presidential candidate Andres Manuel Lopez Obrador says he would choose former collaborator Carlos Urzua as his finance minister if he wins the election in July 2018.

The economist, with a PhD from the University of Wisconsin, served as Mexico City’s finance minister from 2000 to 2003, when Lopez Obrador was mayor of the capital. Urzua is now a professor at the Tecnologico de Monterrey in Mexico City.

Lopez Obrador has been the front-runner in most opinion polls ahead of next year’s election. Some of the presidential candidate’s proposals have riled investors, such as a pledge to overturn a landmark reform allowing private companies to drill for oil, and his energy minister pick has also criticized the overhaul. Lopez Obrador has countered that he’d be fiscally conservative and respect the central bank’s autonomy, pointing to his actions as Mexico City mayor, to keep debt in check.

Urzua "was a good finance minister,” said Jesus Cantu, a political scientist at the Tecnologico de Monterrey, where Urzua works. “During his administration he managed public finances well for Mexico City."

Urzua was a visiting professor in Georgetown and Princeton universities in the 1980s and 1990s, according to his webpage at the Tecnologico de Monterrey. He’s written studies on the persistence of poverty in Mexico and on the impact of Mexico’s 2010 tax reform.

Lopez Obrador has also proposed other members to his cabinet, including former Supreme Court justice Olga Sanchez, as interior minister. One of the more controversial picks may be Rocio Nahle, to the post of energy minister. Currently a congresswoman, Nahle has been an outspoken critic of the energy industry overhaul, which she said as recently as today was meant to debilitate state-owned oil producer Pemex, calling it a "grave error."

While Urzua is "definitely good news" for Mexico’s fiscal outlook, Nahle is not a good sign for the energy reform, Nomura’s senior Latin America economist Benito Berber wrote in a note to clients. Berber noted, however, that she has recently said she’d be open to keeping oil contracts with private energy companies that are determined to be free from corruption.

To contact the reporters on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net, Adam Williams in Mexico City at awilliams111@bloomberg.net.

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Philip Sanders

©2017 Bloomberg L.P.