What a big mistake!
Just when the International Monetary Fund predicted that Mexico's economy will grow at a slower pace because of a drop in investments, President Andres Manuel Lopez Obrador decided to send a low-level official to represent him at the World Economic Forum's annual investors' meeting in Davos, Switzerland, which started on Monday.
AMLO _ as Lopez Obrador is commonly known, after his initials _ did not even bother to send a cabinet member to address the annual meeting of some of the world's key economic players. Instead, he sent a deputy economy minister, Luz Maria de la Mora.
By comparison, Brazil's President Jair Bolsonaro, who like AMLO took office recently, got world attention by addressing the meeting on Tuesday. He also met with Prime Minister Shinzo Abe of Japan and other world leaders. The presidents of Colombia, Ecuador, Paraguay and Costa Rica also spoke at the meeting.
The Davos summit is a rare occasion for Latin American presidents to get attention on the global stage, especially when they are beginning their terms and world investors are curious about their economic plans.
But Mexico had its lowest profile in recent memory at this year's summit. It was not a smart move, especially at a time when it most needed to allay investors' concerns after dire warnings by the IMF and other leading financial institutions.
Earlier this week, Christine Lagarde, the IMF's managing director, released revised estimated projections for the global economy at the Davos meeting. They showed, among other things, that Mexico will grow below the world average this year.
The IMF's forecast said that, because of lower private investments, Mexico's economy will grow by only 2.1 percent in 2019 and 2.2 percent in 2020. That's down from the IMF's previous forecast for the country of 2.5 percent and 2.7 percent, respectively.
A separate study from Bank of America Merrill Lynch was even more pessimistic: It lowered its previous growth projections for Mexico's economy this year from 2 percent to 1 percent.
AMLO's response? He scoffed at the projections, saying at a press conference that the IMF's forecast "will prove wrong" and that "the economy will grow more."
Mexican officials say AMLO didn't attend the Davos summit because he needed to stay at home to focus on the widespread gasoline-theft scandal rocking the country.
Granted, that may have been a good reason to stay put. At least 91 people died when a ruptured gasoline pipeline exploded Sunday as people were stealing fuel from it.
AMLO had earlier promised to eradicate Mexico's endemic gasoline-theft problem. He has been holding daily press conferences about this scandal, and his popularity _ which was already at about 70 percent _ has risen even higher since. Compared with Mexico's previous president, Enrique Pena Nieto, who rarely held press conferences, Mexicans see AMLO as a caring, hands-on leader.
But by not even sending his finance minister or another cabinet member to Davos, AMLO sent the worst possible signal at the worst possible time. Even before the IMF's latest forecast, AMLO was raising concerns among Mexican and international investors.
Before he took office, AMLO spooked investors by canceling the construction of a $13 billion airport in Mexico City, after contracts had been signed with major construction firms, and bonds had been issued to pay for the project. After taking office on Dec. 1, pro-business economists criticized AMLO for changing energy laws aimed at attracting investments to the oil and gas sectors.
AMLO deserves credit for making reducing Mexico's obscene poverty rates and fighting corruption. his top priorities. But if he thinks he can do that without attracting new investments, he's dreaming.
Sure, he can reduce poverty in the short run by doing the populist thing _ giving subsidies to the poor and printing money to pay for them.
But there can be no lasting reduction of poverty without economic growth, and there can be no lasting economic growth without investment. If AMLO shuns investors instead of courting them, it will only increase poverty, which is the opposite of what he seeks.
