There is no question that this past week left Mexico dangling from a cliff as the perfect storm gathers its thunderous forces to take shape. Here are three factors that are coming from three different directions and they all are so big and powerful that they might just overturn the Mexican boat.
The peso has been nose diving since President Enrique Peña Nieto took the helm of the nation in December 2012. It would be impossible not to charge him as guilty, because when he took over, the peso was 12 for one dollar and now, four years later it is 22.50 for one.
Why did it happen? The administration claims it is due to “international economic forces,” but unfortunately Mexicans presently have only one leader to look to who has lost all of his bargaining popularity at both houses of Congress. Perhaps it can be blamed on the virulent diplomatic misbehavior of U.S. president-elect Donald Trump, but mind you, Trump wasn’t there battering the peso against the dollar when the nose dive began.
Then came January 1, 2017, and the liberation of fuel prices came but has not gone. President Peña Nieto has spent the past 13 days trying to explain to the deaf people of Mexico — deaf in his words, that is — that it was “inevitable” and that unfortunately “the goose with the golden eggs has dried up” as he referred to oil production.
Perhaps this might be one issue that Peña Nieto may weather as in the minds of politicians, Mexicans are people with feeble minds and the government can do its worst maneuvering for financial gain of politicians, and the dumb soon forget. Yet it remains to be seen what the effect of the fuels hike will have not just immediately, but in the course of 2017 as the government’s increase comes before the prices are truly liberated next April, when filling stations and gasoline importers are expected to compete in an open market, which is incognito territory in Mexico as oil monopoly Petróleos Mexicanos (Pemex) always has had control of gas supply.
In all this there is suspicion that the still very powerful Pemex Oil Workers Union is playing foul on the president and its leader Carlos Romero Deschamps is behind all the looting that’s been going on since the first day of the year.
The Pemex Union leader stands to lose a lot with a free market format as his union controlled pumping, refining and distribution of fuels is suddenly being taken out of their control. Plus the fact that Pemex workers (because they, and not common thieves, are the ones with the knowhow to “pinch” gasoline from Pemex ducts) are the main suspects of milking Pemex and reselling the fuel at half price to filling station owners creates another attacking front that Peña Nieto has not publicly considered. There is no telling how the Oil Workers Union is going to react in the near future, but surely they are not going to keep their arms crossed.
With the peso and the mass protests against the fuel hikes, President Enrique Peña Nieto and the entire Mexican government should have their hands full, but then enters that indescribable current gale (for now) instilling fears in Mexicans that is U.S. president-elect Donald Trump.
Last Wednesday Trump came back to life with his bullying attitude towards Mexico, just the day after outgoing President Barack Obama made a staunch defense of U.S. democracy and called for the United States not to “bully small countries.”
Let’s face it, from day one of his campaign a year and a half ago, Trump picked Mexico as the source of all the problems ailing the United States, and indeed Mexico must be punished for it. He managed to garner enough voters in middle-America who were no longer a silent majority and believed that indeed Mexico is to blame for their woes.
Whether this was fair or unfair remains to be seen. But it was clear at Trump’s Wednesday’s press conference that he has not budged an inch from picking Mexico as the perfect patsy to vent the ire of frustrated Americans who blame the neighbor to the south, a simmering economy at that, for their disastrous way of living.
But it’s not only Trump that is part of Peña Nieto’s forming perfect storm. As a political move that indeed has the entire Foreign Relations Secretariat (SRE) diplomatic personnel upset, the president appointed his greenhorn buddy Luis Videgaray as head of the Mexican diplomacy. All this based on the fact that Videgaray struck a fine relationship with Trump’s top advisor and son-in-law Jared Kushner. Videgaray, upon taking office at the SRE acknowledged being a greenhorn in diplomacy. At least he was honest.
But is Videgaray the right skipper to command an endangered ship heading into an economic, political and diplomatic perfect storm?
Personally, I don’t think so but for the sake of Mexico, I hope I’m wrong.
That’s the way the nation is heading.