Andrés Manuel López Obrador compared to Reagan and Thatcher after introducing new severe austerity measures

This article is more than 4 months old

This article is more than 4 months old

He identifies as a leftist and rails constantly against neoliberalism. But Mexico’s President Andrés Manuel López Obrador has introduced austerity measures so severe that his critics have compared him to Margaret Thatcher and Ronald Reagan.

This week, the president, popularly known as Amlo, unveiled more cuts in response to the Covid-19 crisis, including the abolition of 10 government departments, a hiring freeze and a 25% cut in government salaries.

He also eliminated Christmas bonuses.

“Reagan, Thatcher and now Amlo. This is how it will go down in history – along with all the human suffering that austerity will cause,” tweeted Ricardo Fuentes Nieva, executive director of Oxfam Mexico.

Despite the cuts, the president promised to plough ahead with a suite of mega-projects including a huge oil refinery in his home state of Tabasco, a pair of railways and an airport north of Mexico City.

Amlo led the Mexican left to power in late 2018, promising to put the poor first, combat corruption and to strip the elites of their privileges.

A famously frugal man, Amlo has eschewed personal luxuries since taking office, flying coach, slashing his salary by 60% and trading fine dining for ramshackle roadside restaurants.

But he also made good on a campaign promise for austerity, arguing that “you can’t have a rich government and a poor people”.

He frequently blames Mexico’s problems – insecurity, corruption and poverty – on the “neoliberalism” of his predecessors. Yet he has slimmed government spending wherever possible, firing bureaucrats and slashing funds for everything from scientific research and the country’s Olympic team to women’s shelters and the health system.

Such cuts are often anathema to the left, but Amlo has cast what he dubs “republican austerity” as a cornerstone of his political project.

“He’s Mr Scrooge. Not because he’s in the cellar counting coins, but because his first instinct in a tight spot seems to be: slash spending,” said Federico Estévez, political science professor at the Autonomous Technological Institute of Mexico.

“For López Obrador honest public figures are those living frugally,” said Fernando Dworak, independent political analyst in Mexico City.

Now, Amlo’s project has collided with coronavirus. Mexico has confirmed 11,633 Covid-19 cases and 1,069 deaths – although the country’s health officials admit the true number is much higher.

'What's wrong with you Mexico?' Health workers attacked amid Covid-19 fears Read more

The pandemic could not have come at a worse moment: Mexico’s economy stagnated in 2019 and was already projected to contract in 2020.

In response, Amlo has proposed loans for households and business. He also promised to boost social programs and push forward pension payments.

In an analysis published on Tuesday, Oxfam Mexico expressed skepticism, saying the social programs Amlo plans to repurpose to help those affected by the Covid-19 crisis “are not designed to support that many people in poverty at this time”.

Amlo has rejected pleas to mitigate the economic impact of coronavirus with business tax relief or rescue packages, recalling Mexico’s unhappy history of private sector and banking bailouts. He also discarded raising taxes or extra borrowing, calling the crisis “transitory”.

“The economic recovery plan doesn’t fit the neoliberal model,” Amlo said earlier this month. “We’ve now broken the mould that was used of applying so-called countercyclical measures, which only deepen inequality and encourage corruption that benefits a few.”

In response to the crisis, Amlo has promised to create an additional 2m jobs – although how he will do that remains unclear – and has pledged to provide 25,000 pesos ($1,000) in credit for business owners in the informal economy.

With a Trumpian flourish, letters to beneficiaries will bear his signature.