Populism Wins Again – But Mexico Swings Left

(Bloomberg) --

Another election, another populist victory – but voters in Mexico yesterday went in a different direction than Europe and the U.S., choosing their first left-wing president in the nation’s modern history.

Andres Manuel Lopez Obrador, a 64-year-old firebrand with a mop of silver hair, rode a wave of public anger over crime, corruption and poverty to deliver a crushing blow to the business-friendly parties in power for decades.

While AMLO, as he is known, vowed to respect oil contracts and central bank autonomy, his procession to victory alarmed investors. Some fear his policies may spark the kind of collapse in the $1.2 trillion economy – and the region’s second-largest crude producer – seen in Venezuela, Argentina and Brazil in recent years.

Then there’s Donald Trump, the U.S. president north of the border whose denunciations of Mexico on everything from trade and drugs to illegal immigration probably aided Lopez Obrador’s campaign.

For now, both leaders are making nice. In his victory speech, Lopez Obrador promised to pursue “mutual respect” with the U.S., and Trump tweeted he’s looking forward to working with him.

But the crowds that greeted the president-elect in Mexico City’s historic center are yearning for change. “We won’t fail you,” he told them.

Global Headlines

German endgame | The dispute over immigration policy that’s rocked Angela Merkel’s coalition has reached judgment day. The chancellor will hold last-ditch talks in Berlin today with her interior minister, Horst Seehofer, who’s threatening to defy her and order police to start turning away migrants at the border. With polls showing voters back Merkel, the price of a return to stability may be Seehofer’s job.

Risky business |  Republicans are closer than ever to achieving a U.S. Supreme Court majority to overturn the landmark Roe v. Wade abortion-rights ruling, but getting there carries a hidden threat for the party. Its control of Congress could be in danger if a nominee who appears ready to cast the decisive vote against Roe rallies the majority of Americans who back legal abortion to turn out for Democrats in the November midterms.

Pain at the pump | Trump’s request that Saudi Arabia increase oil production shows how few options he has to lower gasoline prices ahead of the midterms that will shape the future of his agenda. In an interview that aired yesterday on Fox News Channel, Trump blamed OPEC for rising oil prices, saying it's “100 percent” manipulating the world market and “must stop.” Click here for more of how the U.S. steers OPEC.

Duterte’s report card | Philippines President Rodrigo Duterte’s two years in office have been marred by controversy: He’s led an anti-drug war that’s killed thousands of people, been labeled a misogynist, and angered Catholics with his blasphemous statements. Yet his popularity remains intact because of a booming economy. The jury is still out if that’s because, or in spite, of him.

Jihadist threat | Islamist militants are menacing a potential $30 billion gas production boom in northern Mozambique by carrying out a series of attacks including burning villages and beheadings. Matthew Hill and Borges Nhamire traveled to the region and found that ethnic tensions and rampant poverty are fueling the insurgency.

What to Watch

  • Ahead of the imposition this week of the first round of U.S. levies on Chinese goods, Mark Niquette and Bill Allison look at the limitations that Washington lobbyists are encountering as they try to talk the Trump administration out of its tough trade stance.
  • July could be a deadly month for Theresa May. Unpopular at home and in Brussels, the U.K. prime minister will try to restore order with a Cabinet lock-in Friday at her country estate that’s been dubbed the body bag summit.

And finally... As if Lopez Obrador historic landslide wasn’t exciting enough for Mexicans, the national team will play five-time champion Brazil in a World Cup elimination match in Samara, Russia, today. Betting houses like Paddy Power are giving Mexico 7-to-1 odds of winning. Still, there’s no saying what will come of the country – or AMLO's approval ratings – if they pull it off. During elections, local news networks had a countdown to game time ticking throughout the day as they provided updates on the vote.

 

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With Business News News On BloombergQuint