Con
dinero o sin dinero
hago siempre lo que quiero
Three decades ago, in the
depths of the Latin American Debt Crisis, the CEO of a major New York bank was
on a business trip to Santiago de Chile.
Debt restructuring talks led by the minister of finance were on a
rational path, certainly a much better one for all parties than those in the
rest of the region.
The CEO asked his well connected
local lawyer how to frame his forthcoming speech to a bi-national professional
audience.
“Well” said the lawyer, “you
tell them that the minister is a pain in the neck, that he doesn’t budge from
his position, that he just drives you nuts!”
The CEO, a gentlemanly
banker, thought such a discourse was both unfair and unbecoming. Instead, he complimented the minister on
being constructive and willing to negotiate for the good of his country.
The result? The local press soon ran articles scolding
the minister for selling out to the Americans and letting Chile go down the
drain. Within months, he was out[2] of
office.
Minds and attitudes have
evolved, to a degree, since the 1980s, but the United States remain immensely
more powerful than any of its Latin American neighbors, and the suspicion that
the US will readily abuse such power still lies just below the surface. Call it history, culture, or a bit of both.
When President Trump said
that his Mexican counterpart shouldn’t bother coming unless he agreed to pay
for the “Wall”, that Mexico should respect the US and (falsely) that both had
agreed to call their meeting off, he revived all those deep seated feelings of
mistrust and not being respected.
Just like the Chilean Finance
Minister of yesteryear, President Peña Nieto was put under great stress and the
presumption that, if he negotiated, he would be steamrolled by the
Americans. Whatever new Nafta deal is
reached with the US (and there should be one), it will now be put under a
microscope by the Mexican press, and there will be a sizable part of the
population to believe that somehow their country had got taken advantage of,
particularly since the US have openly stated that they wanted the Mexican
bilateral trade balance to shift their way.
More ominously, there is now
a risk that the main benefit of Mexico joining Nafta could be lost.
Since 1929, Mexico had been
ruled as an authoritarian state by the Institutional Revolutionary Party (PRI)[3]. The PRI tolerated little political dissent,
had a leftist bend yet let its luminaries get very rich[4]. The Latin American Debt Crisis of the 1980s
and the Mexican Tequila Crisis of 1994 were major blows to a system which was
coming undone at the seams[5].
President Carlos Salinas
(1988-1994) started to reform and privatize the economy which allowed Mexico to
join Nafta in 1994. For the US, the key
driver for inviting Mexico was to ensure lasting conditions for its political stability -
meaning democracy - and also economic liberalization. This accession did much to convince President
Bill Clinton and Treasury Secretary Rubin to take decisive action to rescue
Mexico from its financial crisis in 1995.
Now, key reactionary forces
in Mexico, such as former presidential candidate Andres Manuel Lopez Obrador
(AMLO), are clamoring for leaving Nafta and abandoning the open economy
model. In other words, there is a risk
of undoing the basic raison d’ȇtre of
Nafta. So far, the country is rallying behind its president, not splitting into
different factions; but this could change unless the president is viewed as
“winning” rather than simply holding his own against the US.
President Trump, ever the showman,
may at some point find it useful to take a cue from the above Chilean
lawyer and bolster his counterpart's image. He may also get somebody to
translate the lyrics of El Rey:
..no
tengo trono ni reina
ni
nadie que me comprenda
pero
siguo siendo el rey.
I don’t have a throne or a queen
nor anybody that understand me
but I remain the king.
[1]“ With or without money, I
always do what I want, and my word is the law”.
Beginning lyrics of El Rey,
the iconic ranchera written by Mexican legend Jose Alfredo Jimenez.
[2] True story.
[3] A political oxymoron if there ever was one.
[4] As one famous Mexican politician and
businessman famously said, “Un politico
pobre es un pobre politico” – A politician who is poor is a poor
politician.
[5] Local elections started to go against PRI
candidates in the early 1980s and the 1988 presidential election was widely
viewed as having been manipulated to favor the official candidate.
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