COULD MEXICO under the leadership of Andres Manuel Lopez Obrador plunge into the political and economic tailspin which we associate with Venezuela under Hugo Chávez, Nicaragua under Daniel Ortega, or Argentina under the Kirchners? Over three years into his six-year term, Lopez Obrador—universally known by his initials as AMLO—has displayed many similar statist and authoritarian instincts. But sufficient countervailing forces may exist so that Mexico avoids the worst, and with it, collateral damage to the United States.

U.S. INTEREST in Mexico is at best intermittent despite our lengthy shared border. Typically, one issue dominates the headlines. It varies from trade to narcotics to immigration—always in terms of its immediate impact on the United States. But relatively little sustained attention is given to the broader issue of Mexico’s overall political stability and the prospects for continued democratic governance.

Brief flurries of interest appear, usually in connection with electoral events, most recently in June 2021 when midterm races raised the question of whether AMLO would gain his desired two-thirds congressional majority, but not since the late 1970s and 1980s has Mexico been seen as a front-burner national security issue.

A 1979 article entitled “Mexico: The Iran Next Door?” by the right-wing academic Constantine Menges drew a parallel to the then-recent fall of the shah of Iran, suggesting that Mexico, another large, troubled U.S. ally, could go the same way. However, in this case, the scenario he envisioned was essentially a repetition—on a much larger scale—of the Sandinistas’ victory earlier that year over Anastasio Somoza in Nicaragua, even as a similar guerrilla triumph then seemed likely in neighboring El Salvador.

Menges took up positions in the Central Intelligence Agency and the National Security Council in the Reagan administration. As it pursued its policies of aggressive support for an anti-Sandinista insurgency in Nicaragua and a pro-government counter-insurgency campaign in El Salvador, there were occasional efforts to defend these policies with reference to a perceived threat to Mexico and by extension the U.S. southern border. President Ronald Reagan even asserted that it was only a two-day drive from revolutionary Managua to Harlingen, Texas.

Perceived instability in Mexico may not really have been key to the United States’ Central American effort, itself only one part of a global push against the Soviet Union which played out in other theaters such as Angola and Afghanistan. Nonetheless, the 1980s were indeed a time when Mexico’s prospects seemed questionable. The 1970s oil boom had enabled it to borrow and spend at will. This came to a sudden halt when the Federal Reserve Board hiked U.S. interest rates to tame inflation, leading to a severe financial and economic crunch in Mexico. After decades in power, the Institutional Revolutionary Party (PRI), termed “the perfect dictatorship” by Nobel Prize winner Mario Vargas Llosa, was becoming less able to contain political dissent. Corruption, always a significant problem, reached new dimensions, as officials found narcotics money a substitute for lost income siphoned from oil revenue.

Nonetheless, Mexico pulled itself together in the 1990s. First, PRI presidents Miguel de la Madrid and Carlos Salinas de Gortari eased Mexico away from a closed, statist economic model which was no longer workable. And the electoral system was permitted to function freely enough so that Vicente Fox, the first president from the conservative National Action Party (PAN), came to power in 2000. Fox, in turn, was succeeded by another PANista, Felipe Calderón. He was followed by the PRI’s Enrique Peña Nieto, marking genuine alternation in power, though with considerable continuity in policies.

Perhaps the most important step towards Mexico’s modernization occurred in 1994 when the North American Free Trade Agreement, negotiated during George H.W. Bush’s administration and ratified under Bill Clinton’s, came into effect. Although the merits of the agreement have been debated in the United States largely in terms of its domestic economic impact, it was also a work of enlightened statesmanship which did much to promote investment and modernize Mexico’s economy, as well as tying it to the United States and a free-market model. 

However, over the following two decades, the unfinished business of political and economic development created a ticking time bomb of popular discontent. A new middle class emerged, especially in the cities of northern Mexico, where the benefits of U.S. and other foreign investments were felt. But millions remained mired in poverty. Despite significant U.S. assistance through the so-called “Merida Initiative,” the drug cartels increasingly became a power in the land, while day-to-day insecurity plagued those unable to shelter in gated communities. Although the holding of free and fair elections and the alternation of power between the PRI and the PAN was a genuine achievement, politics was perceived as an insider’s game, remote from the average citizen and plagued by corruption at all levels.

THE SITUATION was thus ripe for an “outsider” to take power. Over time, AMLO had established himself as the voice of those who felt left out in a changing Mexico. Originally a PRI politician in the southern state of Tabasco, he had split from it and gained the mayoralty of Mexico City under the banner of the Party of the Democratic Revolution (PRD), a leftist offshoot of the PRI. He ran as the PRD candidate for the presidency in 2006, losing narrowly, and again in 2012, losing by a wider margin. He ran a third time in 2018 as the candidate of the National Regeneration Movement (MORENA), essentially his personal vehicle. His victory, against weak candidates from the PAN, PRI, and PRD, has led Mexico into uncharted waters both politically and economically.

AMLO is now over halfway through his six-year term in office, long enough to allow us to make some judgments. Where he most obviously resembles Hugo Chávez is in his classically populist effort to govern through personal charisma, directly reaching the public so that it identifies emotionally with him. In this he has differed from his immediate predecessors from the PAN and PRI, who cloaked themselves in the prestige and formality of the presidency. Despite his lengthy political career, he has sought to present himself as an ordinary citizen. The accoutrements of his “man in the street” persona include remaining in his home in a middle-class Mexico City neighborhood instead of moving to “Los Pinos,” the presidential residence (which he opened to tours after assuming office).

His technique differs from that of Chávez, but with the same end of establishing an unmediated rapport with the voter. Chávez sold himself as the bluff, tough military man, clad in his uniform and red paratrooper’s beret, speaking the truths that the establishment dared not say. (Nicolás Maduro, who succeeded Chávez after his death, has tried to maintain a similar persona but utterly lacks Chávez’s charisma.) One element common to both AMLO and Chávez’s approach to politics is a seemingly infinite confidence in the leader’s ability to convince through the power of his words. AMLO has held (except for when he was ill with coronavirus) lengthy daily press conferences. Chávez held a weekly call-in show called “Hello President,” together with frequent, long Castro-style speeches which the networks were required to broadcast.

Fundamental to both AMLO and Chávez’s method of governing is a purely instrumental approach to democratic norms. When AMLO ran for the presidency in 2006, he initially enjoyed a large lead over the PAN’s Felipe Calderón. However, as the campaign advanced, voters grew nervous about his radical rhetoric and it progressively shrank. When on election day Calderón beat him by a razor-thin margin, AMLO cried “fraud” despite the fact that Mexico’s electoral authority and the court that supervised it had gained international respect after holding multiple presidential races which had been generally viewed as free and fair. Instead of accepting his loss, he proclaimed himself the “legitimate president” and sent his supporters to occupy the Paseo de la Reforma, downtown Mexico City’s principal artery, for two months. Mexico’s institutions, however, held, and Calderón assumed office.

Chávez, of course, began his political career in February 1992 with a failed coup d’etat in which he led a group of disgruntled officers in an effort to seize power from the unpopular Carlos Andres Perez. The attempt collapsed when they failed to secure the presidential palace and the main television station. A second coup attempt later that year, mounted by his followers while he was in prison, came closer but also failed. Six years after the failed coups, Chávez gained the presidency at the ballot box, just as AMLO gained it twelve years after trying to claim it on the streets of Mexico City.

LÓPEZ OBRADOR has shown a distinctly Chávez-like interest in reshaping his country’s institutions to weaken entities which can act as a brake on his power. It is true that he has gone nowhere as far as Chávez and his successor Maduro, who have taken over the state entirely, having completely colonized the electoral authorities, judicial system, and law enforcement agencies, as well as rewriting Venezuela’s constitution. AMLO has been more restrained, though it may be that this is more a feature of his relatively weaker position—he lacks the nearly unlimited financial resources that Chávez enjoyed when the global price of oil skyrocketed early in his term in office. And, while AMLO retains considerable personal popularity, his failure to achieve a two-thirds majority in Congress in this year’s midterms means that he will have to negotiate any constitutional changes with at least some of the opposition parties.

Still, there are some ominous signs. Most notable is his campaign against Mexico’s electoral institutions, the National Electoral Institute, which administers voting, and the Electoral Tribunal, which hears appeals of electoral disputes. In addition to his charge that the 2006 election was stolen, he has added complaints that certain MORENA candidates for lower offices were not permitted to run—having been disqualified for failing to meet technical requirements. He has mounted a campaign which has pressured an Electoral Tribunal judge to leave his post early, has proposed constitutional changes to make elections “more efficient,” and has called for the entire Electoral Tribunal as well as the board of the National Electoral Institute to resign. He has cut the institute’s budget, while at the same time insisting that it administer a referendum on his continued tenure in office. AMLO, though, is sufficiently popular that it is most unlikely that he would lose, making the referendum simply an effort to underscore the support he still enjoys. It is worth noting that his campaign to achieve a friendly judiciary has extended beyond the Electoral Tribunal to Mexico’s Supreme Court, where he obtained legislation to retain the presiding judge, generally seen as supportive of him, in office beyond his term. (The judge ultimately declined to accept an extension.)

Key to both Chávez and AMLO’s style is a rhetoric which seeks to disparage his opponents, with a strong flavor of class warfare. Chávez typically called the previous political and economic elite of Venezuela “the squalid ones.” AMLO calls his opponents “fifis” (roughly, upper-class twits). Both have made denunciation of critical media a constant theme. And AMLO has with considerable success set himself up as the paladin of anti-corruption in Mexico. There, however, may be limits to how far he can take this message, especially the light of the fact that his own movement has not been free of scandal, notably when a video surfaced showing one of his brothers receiving bundles of cash from one of AMLO’s political operatives, and more recently when it was reported that his son living in Houston had rented a large house from a former executive of a major oilfield services company which did business in Mexico and that he was employed by a firm belonging to a Mexican businessman who had ties to AMLO.

Recently AMLO held a referendum on authorizing the government to prosecute former presidents for corruption (something which it was already able to do under existing law). The referendum was widely seen as a transparent political gesture and failed to gain the minimum level of support required. But generally missing from AMLO’s recipe for governing thus far has been the naked repression of opponents which characterized Chávez from the beginning and which his successor Maduro has continued.

NONETHELESS, THERE have been some ominous developments in recent months. Mexico’s attorney general has mounted a dubious criminal case against distinguished scientists affiliated with the National Science and Technology Council who had objected to personnel and policy changes in the institution. AMLO has denounced the Center for Economic Research and Teaching, a small but distinguished state-funded institution, for having “turned to the Right” and similarly charged his alma mater, the National Autonomous University of Mexico, with having become “neoliberal” and “individualist.” And he has demanded (unsuccessfully) that tax authorities publish the returns of the journalist who reported on his son’s activities. AMLO is, it seems, becoming ever more hostile to those he views as opposed to his project.

Any government with authoritarian tendencies must carefully deal with the one institution which could thwart it—the armed forces. In the case of Venezuela, Chávez had the great advantage of coming from the army, thus knowing its leaders, their personal ambitions, political leanings, degree of honesty, etc. After winning the presidency, he moved methodically to gain control by naming his supporters to top military positions, while those of more doubtful loyalty were put on indefinite leave. With the resources available from high oil prices, he went on a spending spree on military equipment, with money finding its way into senior officers’ pockets. As he expanded Venezuela’s government, creating a vast, politicized welfare state, military officers found themselves in high positions, such as managing the “Mercal” system of state food markets for low-income consumers. There are also reports of military involvement with drug trafficking run by guerrilla groups along Venezuela’s western border with Colombia.

AMLO has had to tread more carefully with the military, as he has lacked Chávez’s origins in the institution, as well as the oil wealth which he had enjoyed to assure its acquiescence. However, AMLO has clearly favored the armed forces. He has taken pains to appear supportive and has expanded their role in internal security—using the military police as the basis for the creation of a new paramilitary “National Guard” to substitute for discredited existing police entities.

And he has moved decisively to keep the military happy when its prerogatives are threatened. The most striking example occurred when a former senior army officer was arrested in Los Angeles by U.S. authorities on drug trafficking charges. After initially remaining quiet, AMLO, feeling pressure from the military, threatened to cut off all counter-narcotics cooperation with the United States if he were not released. The U.S. Department of Justice gave in and let him go.

Internationally, AMLO’s policies have marked a reversion to typical Mexican form of the 1980s and before, with occasional sharp criticism of the United States combined with pragmatism on sensitive issues such as immigration and the renegotiation of NAFTA. He has made gestures of friendship to left-leaning governments such as Argentina and, recently, Peru, and a shown reluctance to criticize human rights violators, especially those of a leftist hue. (Mexico was slow off the mark in condemning Nicaragua for Ortega’s jailing of his principal political opponents.) However, AMLO has not gone anywhere near as far as did Chávez during Venezuela’s glory days of high oil prices, when he became Cuba and Nicaragua’s banker, showering both states with subsidies.

If AMLO’s political maneuvering is a variant of Chávez-style Left populism, albeit constrained by significant limitations, much the same can be said of his economic program. Both have couched their policies in the most grandiose of terms, with AMLO having promised Mexico’s “fourth transformation” while Chávez pledged to create “twenty-first-century socialism.” Both visions rely upon the state-owned petroleum sector as the engine to finance highly visible mega-projects as well as expansive welfare programs. 

BOTH AMLO and Chávez looked back to the 1970s, when their state oil corporations, PEMEX and PDVSA respectively, had monopolies on oil production dating back decades that had become gigantic money makers when OPEC tightly controlled much of global production. Oil prices, of course, subsequently crashed, leading both countries to swallow hard and let international oil companies enter into joint ventures which brought in needed capital and technology, though both in Mexico and Venezuela there was always a strong leftist current committed to resource nationalism which bitterly criticized this perceived betrayal.

The tide turned first in Venezuela, where Chávez enjoyed a boom in oil prices which started almost upon his taking office in early 1999. He began to squeeze the international oil companies, demanding a greater share of earnings and eventually largely driving them out. At the same time, he exercised fierce political control of state oil producer PDVSA, cutting back on investment and using its profits to build his political and security machine. (Ironically, with the collapse of Venezuela’s economy, he and his successor were forced to turn to new sources of foreign oil investment from Russia and China.)

AMLO, long a proponent of petroleum-based nationalism, has taken some moves in the same direction. He has not gone as far as actually rolling back the existing presence of international oil companies, whose entry had been encouraged by earlier constitutional changes, but he has shown a strong preference for state oil giant PEMEX despite its history of corruption and enormous indebtedness. He has sought to reverse the pro-private sector constitutional changes, a task which may have been made harder by his failure to secure a two-thirds majority in the last midterm congressional election. However, he has taken steps under his executive powers such as insisting that PEMEX serve as the operating partner in an existing joint venture with Houston-based Talos Energy on a large new offshore deposit.

He has also sought to increase the state presence in downstream operations, pushing forward with the construction of a major new refinery in his home state of Tabasco for Mexico’s heavy crude oil. This is despite the fact that many industry observers do not see this as making economic sense and it is located in an environmentally-sensitive area. Chávez had similar ambitions, vowing to construct a refinery to be called “Bolivar’s Final Dream,” which amidst Venezuela’s economic collapse has yet to be built. AMLO has shown particular hostility towards foreign participation in the electric power sector, seeking passage of legislation which would give priority to the state-owned enterprise, the Federal Electricity Commission, in generation, transmission, distribution, and supply. This recalls Chávez’s outright nationalization of previously privatized utilities such as the Caracas power distributor, which had belonged to U.S. firm AES Corporation.

Both the AMLO and Chávez governments, enamored of the wealth and power they saw flowing from oil, have shown an indifference to the environment, despite this having become a hot button issue in global politics. Pollution from Venezuela’s oil industry, already high, worsened under Chávez as he sought to keep up production at all costs, leaving, for example, Lake Maracaibo a contaminated disaster zone. 

For his part, AMLO is giving priority to the Federal Electricity Commission’s oil-burning power plants and to one using domestically produced coal. This has had the effect of stalling private projects in wind and solar energy which would not be able to connect to the national grid. Beyond the energy sector, he has pushed for splashy mega-projects such as the “Tren Maya”—a high-speed passenger railroad line to southern Mexico of dubious economic value which will pass through environmentally- sensitive areas and which is built on soft bedrock. This has led AMLO to denounce foreign support for Mexican environmental groups which oppose the project. In the face of delays to this signature project, AMLO has declared it to be of “national security” interest, short-circuiting environmental reviews and court challenges.

Fairness to AMLO requires us to recognize that his vision for Mexico’s economy, while retrograde, so far has not been as comprehensive as was that of Chávez. He has not sought to nationalize key sectors such as telecommunications, agriculture, retail food distribution, and other areas where Venezuela’s economy has been disastrously affected. But like Chávez and his successor Maduro, AMLO has used welfare spending to underscore the link with the leader’s beneficence, using party activists to distribute cash payments to low-income Mexicans.

It is also worth noting that AMLO has not gone the Chávez route of massive spending and deficits to cement his political position, even in the face of the COVID-induced economic crisis. Indeed, he has vocally proclaimed his commitment to austerity, claiming that government funding will go only to efforts that benefit the poor. He has cut back government subsidies to both culture and scientific research and capped civil service salaries (which may have the added benefit of driving out senior officials who are unsympathetic to his project). To what degree this caution derives from a genuine commitment is unclear, although he may indeed be averse to acquiring foreign debt and the vulnerability to external pressure which accompanies it. In any event, the reality is that without the historically high oil prices which Chávez enjoyed, and given that Mexico has less oil and the need to spread revenues over a larger population, big new spending is simply not a viable option.

IN THE end, is AMLO a would-be Chávez? The harsh rhetoric regarding his opponents, the efforts to gain control over judicial and electoral institutions, and the grand statist visions based on a hoped-for return to 1970s-era oil bounty all point in that direction. But he has not taken the irrevocable steps which Chávez took to break with democratic governance and impose an authoritarian model on his country. What is unknowable is whether AMLO, who after all began as a career politician in the once-dominant PRI, is simply not prepared to go as far as Chávez, who entered politics as a coup plotter, or whether Mexico, a far more complex society both politically and economically, does not given him this opportunity.

AMLO himself has indicated that his “fourth transformation” of Mexico will require more than the single six-year term which the constitution allows. Does this mean that he looks to a successor from his own MORENA party or would he seek to change the constitution to allow his reelection? Prospects for this have diminished with his failure to gain a two-thirds majority in this year’s midterms, and the fact that his personal popularity, while still high, is down from earlier levels. Thus, speculation now centers on who he will support within MORENA. But Mexican politics can be opaque and transactional and such a deal cannot be completely ruled out. Opposition parties in other Latin American countries have engaged in similarly self-destructive acts, notably in Nicaragua where Daniel Ortega, now in his fourteenth year in power, cut a corrupt bargain with the principal opposition party to gain office and then proceeded to crush all political rivals.

Will we see Mexico become the Venezuela next door? The higher probability is no, and that Mexico’s political and economic institutions can resist whatever stresses are put on them. But the stresses are real, and with a population of 130 million and a 1,900-mile-long border with the United States, there is reason for concern. Nonetheless, Mexico has guardrails against populist authoritarianism. Important as oil has been, Mexico’s economy is far more diverse than Venezuela’s. The latter’s industrial sector was always closely linked to the state as supplier to oil giant pdvsa, and domestic consumer demand, fueled by an inflated currency, was largely satisfied by imports.

Mexico has a far more diversified economy, in large measure spurred by the proximity to the U.S. market and the access provided by NAFTA (now USMCA). Beginning as “maquiladoras,” (in-bond processing plants largely for garment production) the industrial sector has benefited from enormous bets from major U.S. and other international firms across the board, but most visibly in auto manufacturing. Additionally, a large export-oriented agricultural sector has developed for the U.S. market. All of this means that there are millions of Mexicans whose livelihoods are linked to a modern outward-looking economy whether or not AMLO views it positively. The outskirts of Mexico’s large cities all have huge suburban developments of homes occupied by an emerging middle class. Their owners may have been attracted by AMLO’s everyman persona and his campaigning against corruption, but they are not likely to want to support grand ideological crusades which put their livelihoods at risk.

Politically, Mexico has stronger institutions than Venezuela did. Prior to Chávez’s rise, Venezuela had been an exception among Latin American countries, with two stable parties, one center-left and the other center-right. Both fell apart in the face of their histories of corruption, political infighting, and the collapse of the petroleum economy, leaving them in no shape to combat Chávez. By contrast, Mexico’s two large parties, the PRI and the PAN, remain intact, if battered, with significant presences in Congress and among state governorships. Both have a lot of rebuilding to do, but have bases from which they can work. Also, the constitutional requirement that the president serve only a single six-year term is deeply ingrained in Mexico’s political culture, where it has long been seen as a key check on the rise of one-man rule.

Will AMLO, who has proven himself to be highly skilled at mobilizing resentments, get a second wind and seek to push forward not only his program but his own personal ambitions? Or has he reached his high-water mark as opposing forces begin to mobilize? Whatever happens, the impact will be significant.

Richard Sanders is a global fellow of the Woodrow Wilson International Center for Scholars in Washington. He is a former member of the Senior Foreign Service of the U.S. Department of State, where he concentrated on the Western Hemisphere with service at U.S. embassies in Colombia, Uruguay, Chile, Venezuela, Nicaragua, and Canada as well as in the Offices of Mexican Affairs and of Brazilian and Southern Cone Affairs.

Image: Reuters.