Latin America Advisor

A Daily Publication of The Dialogue

Can AMLO Strike a Balance Between Saving & Spending?

López Obrador // File Photo: López Obrador Campaign.

Mexican President-elect Andrés Manuel López Obrador has said he will push government austerity measures early in his term, pledging to cut his own presidential salary by more than half, end pensions for former presidents, eliminate perks such as chauffeurs and bodyguards for high-ranking government officials and eliminate private health insurance that is offered to some public employees. What are the most important parts of López Obrador’s austerity plans, and how much resistance will he face in implementing them? What segments of the economy and businesses would be most affected by the measures? Would the cost savings translate to significant sums that could be budgeted elsewhere?

 

Alma Caballero, director at McLarty Associates: “President-elect Andres Manuel López Obrador’s ‘republican austerity government plan’ is intended to reduce excessive government spending while serving as a tool to attack corruption. One of AMLO’s main promises throughout his campaign was to end the privileges of those involved in the ‘mafia of power.’ However, even though AMLO has yet to reveal a specific plan as to how his administration will attack corruption, he has been detailed in outlining how the benefits of reducing corruption will be used to fund his priority project initiatives. Those priorities include the economic developments of the country’s southern states, the construction of two new oil refineries, the development of a new railway line across the Tehuantepec isthmus and the construction of a ‘Maya’ trainline extending from Quintana Roo to Chiapas, among others. Consolidated purchases as well as salary cuts for government officials are part of AMLO’s austerity plan. Skepticism exists, however, regarding the…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. More than 100 of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.


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