Home Headlines International analysts and critics complain Mexico’s Austerity Plan has gone too far

International analysts and critics complain Mexico’s Austerity Plan has gone too far

by Yucatan Times
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Mexico’s president Andrés Manuel López Obrador has cut thousands of government jobs to fight corruption. Critics say he is putting the country in danger — especially when it comes to attracting foreign investment.

Audio transcript


Mexico’s new president is a populist. He’s a leftist. And there’s this thing he says a lot – you can’t have a rich government where the people are poor. So in the first few months of his administration, he has slashed government spending, cut thousands of federal jobs and ended some of the perks of being a Mexican politician. Many people love it, but some others think his thriftiness has gone too far. NPR’s Carrie Kahn has the story.

CARRIE KAHN, BYLINE: President Andres Manuel Lopez Obrador says it’s time lawmakers live like regular Mexicans. He’s done away with chauffeur-driven cars, expense accounts and high salaries, starting with his own. He cut the presidential pay by 60%. He’s trying to sell the presidential plane and now flies commercial. And in a stroke of populist genius, he turned the opulent presidential residence into a public park and museum.


UNIDENTIFIED PERSON: (Speaking Spanish).

KAHN: On a recent Sunday, federal employees hold an auction right on the grounds, selling thousands of pieces of jewelry seized from drug traffickers, tax cheats and white-collar criminals.



KAHN: Ricardo Rodriguez Vargas says all proceeds will go to the poorest communities in the country. Rodriguez heads up the federal agency, which was just renamed the Institute to Return the Stolen to the People. He’s held four auctions of seized goods so far this year.


VARGAS: (Speaking Spanish).

KAHN: Among the 2,000 items being auctioned are solid gold pistol grips, diamond bracelets and all sorts of designer watches, like this one hitting the $11,000 asking price.


VARGAS: (Speaking Spanish).

KAHN: Observer Jose Luis Aguillar is stunned by all the opulence on display.

JOSE LUIS AGUILLAR: (Speaking Spanish).

KAHN: “He’s doing the right thing – our president – by showing us all that’s been stolen, the impunity in our country. This is great,” says Aguillar. But critics say Lopez Obrador’s austerity and cost cutting has gone too far. He’s put public hospitals at risk by reducing personnel and supplies, let forest fires rage while laying off firefighters and slashed 2D (ph) federally funded science and art projects.

DENISE DRESSER: Cuts have been done with a machete instead of doing them with a scalpel.

KAHN: Denise Dresser, professor and political commentator, says what is most worrisome is that Lopez Obrador is getting rid of competent civil servants and replacing them with what she says are yes-men and women.

DRESSER: Those who believe in his form of transformation – so he’s replacing one form of dysfunctional government with another form of dysfunctional government.

KAHN: Last month, Lopez Obrador’s finance minister, a longtime political ally, abruptly resigned, citing what he called ideological extremism in economic decision-making.


KAHN: Jose Angel Santamarina knows about the cost cutting all too well. He was a top executive at ProMexico, a division in the economy ministry that promoted Mexican businesses and investment at home and abroad. Last spring, he and the entire division were let go – some 500 workers.

JOSE ANGEL SANTAMARINA: They are closing, but without offering a new or different alternative. And we are worried about that. There is no plan B.

KAHN: He says Mexico’s economy can’t survive without foreign investors and the expertise of officers like his. In fact, economists warn Mexico is heading for a recession. Growth has been below 1% so far this year. A lot of that has to do with global economic pressures, but critics say Lopez Obrador’s handling of the economy isn’t helping. He’s redirecting a lot of his austerity savings to billion-dollar infrastructure projects that market watchers say are too expensive and environmentally unsound.

Historian Lorenzo Meyer, who supports the president, says change is hard after decades of privilege enjoyed by so many corrupt politicians and elites.

LORENZO MEYER: I am pretty sure that a lot of upper class Mexicans and even middle class don’t feel that Andres Manuel Lopez Obrador is the kind of president that Mexico needs.

KAHN: But he says the general population backs him, with some polls giving the president a 70% approval rating. Carrie Kahn, NPR News, Mexico City.

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