MEXICO CITY — Argentina began the 20th century with Latin America's highest GDP, similar levels at the time to the United States'. A century later, it had dropped to 53rd position in the world. As an Argentinian friend once said to me: "Anyone who says things can't get any worse doesn't know Argentina."
It is a country that seems to have devoted itself systematically, over the decades, to undermining its own developmental potential. There are many hypotheses on the causes of this decline, but an evident one is the polarization that has gripped its society since the days of the emblematic 20th-century leader Juan Domingo Perón. This division (between supporters of "Peronist" social democracy and conservative opponents) has essentially become a permanent state of political confrontation.
Now, I have begun to wonder if Mexico is running the risk of falling into a similar, vicious circle.
Perón was a genius at communication, which he used to incite the population to confrontation, express resentments and conjure up enemies of the people. The existence of a single truth to explain history and daily reality allowed the strongman to polarize society and build a deep and lasting support base. Yet the strategy led to society's permanent division and economic impoverishment. Argentina has everything needed to become one of the world's richest countries: a European society transposed into a region replete with natural resources. But it has had the misfortune of living in permanent conflict. Three-quarters of a century since Perón, Argentina remains a country of dramatic vicissitudes.
Perón at his 1946 inauguration — Photo: Argentina national archives
The great risk of our own current president Andrés Manuel López Obrador (AMLO) is that his strategy risks converting Mexico into a country that always loses. I am certain that this is not how he envisions the future. Rather he takes the view that Mexico took the wrong path these last decades, and the direction must be rectified to build a new and better future. This is entirely different to the socialist vision of Hugo Chávez, the late Venezuelan leader with whom López Obrador is at times, fearfully compared. But his confrontational strategy, which is an essential part of his vision, risks paralyzing the country and reversing the things that do work here. This is more akin to post-Perón Argentina than anything Chávez may have tried.
AMLO believes in the confrontational approach in times that are radically different to Perón's. The Mexican writer Héctor Aguilar Camín says of him that he "does not negotiate, he fights, though in order to negotiate on this own terms. He is not averse but attracted to conflict, but only so he can later make a pact... He feeds on confrontation to win supporters and pacts." (The abrupt resignation this week of Mexico's Finance Minister Carlos Urzua deepened worries and the risk of a major stock market and currency sell-off, Bloomberg reports)
A similar strategy took Argentina into a time of crisis more than 50 years ago, where it remains today. The major difference is that its economy in the mid-20th century was closed, and there was not the same globalizing factor. The closed economies of Latin America in the mid-20th century, which were essentially devoted to imports substitution, had economic and political characteristics that gave their governments considerable room to maneuver.
The confrontational strategy creates uncertainty.
To begin with, those economic models sought to minimize commercial exchanges with the rest of the world, and generally rejected foreign investment or restricted it to certain sectors. Secondly, communications were not as immediate as they typically are today. Businessmen could produce expensive, bad-quality products and the consumer had no choice but to get by with them. In that context, politicians could impose laws and regulations as they saw fit, knowing society lacked alternatives. The government was in charge and that determined the population's welfare or misery.
The reality today is the exact opposite. The consumer has unlimited options and prices of the most essential goods have diminished in real terms, without inflation. Firms must compete with peers at home and abroad. And the government, if it wants to attain elevated growth rates, must work to win both domestic and foreign investment. The confrontational strategy creates uncertainty in this environment, alienating investors and slowing down the economy.
The crucial characteristic of nations that grow and enjoy success is social cohesion and consensus, which permits them to confront problems like poverty, recession or violence. The outstanding traits of nations like Chile, Colombia, Spain, Taiwan or Singapore offer a clear vision of a better future. Their politicians strive to project a successful nation and seek their citizens' determined support in this undertaking.
Seeking confrontation could leave a legacy of resentment, division and crisis that could last well beyond AMLO's six-year presidential term. Nobody in Mexico should want to see this.
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