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The Leftist Who Could Rule Mexico


"Happiness is about to arrive." That will be Andr?s Manuel L?pez Obrador's slogan when he takes a leave of absence as Mexico City mayor on July 31 to launch his campaign for the July 2006 presidential election. The charismatic leftist leads possible rivals by 18 points in opinion polls. His candidacy got a boost when President Vicente Fox and rival political parties failed in their controversial attempt to impeach him -- and thereby bar him from the race -- in April.

Now observers are scrutinizing the mayor's record to figure out what kind of President he would be. He's often compared to two other leftists, Venezuela's authoritarian Hugo Ch?vez, and Brazil's progressive yet fiscally responsible Luiz In?cio Lula da Silva. But Mexican economist Rogelio Ram?rez de la O, who has informally advised L?pez Obrador on energy, sees differences. The mayor has read widely on economics and seems "very disciplined" in his approach to policy, says de la O. "He shouldn't even be compared to Ch?vez."

Supporters say L?pez Obrador is a nationalist determined to spur job creation and growth, especially in energy, agriculture, and construction. He pledges to cut government waste and give college education and old-age benefits to the poor. "There is room for a stronger state role," says economist Ifigenia Mart?nez of L?pez Obrador's Party of the Democratic Revolution.

Certainly the 52-year-old mayor has shown a penchant for government intervention. And he has built a national following by starting each day with a 6:30 a.m. press conference that often scores morning news headlines. In four years, his aides say, he has slashed expenses by $1.1 billion, eliminating extras like mobile phones and secretaries for officials. The cutbacks cover the costs of new monthly $65 pensions and food vouchers for seniors, single mothers, and disabled people. L?pez Obrador has built highways, a free university, a hospital, and 16 schools, funding them by raising $1.1 billion in municipal bonds and bank credits. He convinced telecom magnate Carlos Slim to help raise private funds to revitalize the city's historic downtown.

MEXICO-FIRSTERS

In his recent book, An Alternative Project for the Nation, the mayor pledges to bring such policies to Mexico as a whole. His challenge will be convincing the business elite that he can do it without blowing the budget. "He will be viewed favorably by elements of the business community who are Mexico-firsters," says George W. Grayson, a professor at the College of William & Mary who is writing a book about López Obrador. But he opposes some reforms foreign investors favor, such as privatization of state oil giant Pemex. He says he won't scrap NAFTA but wants the U.S. to contribute to regional development funds -- a proposal that may not fly in Washington. "López Obrador isn't likely to buy into the next stage in the evolution of Mexico's reforms," says Geoffrey Dennis, Latin America equities strategist for Smith Barney Citigroup (C).

It's too early for global markets to react to Latin America's newest leftist presidential hopeful. Investors will see more of him when he tours Chile, Brazil, and the U.S. in late summer. Having defeated an impeachment threat, López Obrador seems determined to prove himself. That doesn't necessarily mean pleasing Washington, though, or Big Business.

By Geri Smith in Mexico City

EDITED BY Edited by Rose Brady


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