Mexico's presidential candidate for the MORENA party Andres Manuel Lopez Obrador ALFREDO ESTRELLA/AFP/Getty Images

AMLO and Mexican Democracy

Mexico is already a deeply polarized country, so the last thing it needs is a president who practices a politics of division, however fiscally prudent he may be. But that is almost certainly what it will get when, as seems likely, voters elect Andrés Manuel López Obrador on July 1.

SANTIAGO – With the outcome of Mexico’s presidential election on July 1 virtually assured, financial market analysts are now asking how bad Andrés Manuel López Obrador (popularly known as AMLO) will be for the economy. The honest answer is that it’s anybody’s guess.

But markets like few things more than concluding that a populist is not that bad after all. As they did with President Luiz Inácio Lula da Silva in Brazil and Ollanta Humala in Peru, among many others, pundits are rushing to identify reasons for optimism.

One cause for hope is that AMLO has moderated his incendiary rhetoric and is no longer threatening to do away with the North American Free Trade Agreement. Another is that Latin American populists can also be fiscal hawks, as Evo Morales has shown in Bolivia. AMLO’s tenure as mayor of Mexico City was fiscally sound, and Carlos Urzúa, his likely finance minister, played a part in that. Moreover, Mexico has a capable central bank with a strong tradition of independence. AMLO’s campaign manager has spent much time attempting to reassure investors, and markets may have already priced in whatever AMLO will do. The list goes on.

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