This report gives our views on the State of the Union address presented by President Andrés Manuel López Obrador. We will be reporting on the recently released budget plan in an upcoming In Brief.
Despite his best efforts to claim he was delivering his third report on the state of the nation since taking office, President Andrés Manuel López Obrador’s first annual State of Nation Report of his administration failed to deliver anything truly innovative either in form or content. Building on his two predecessors' preference for a tightly controlled setting for the event, he delivered his speech from within the National Palace, and focused mainly on the same litany of issues and “solutions” to which he has dedicated most of his time during the extended morning press conferences he holds every morning from the same location: austerity, fighting corruption, prioritizing development over growth, denunciations of the neoliberal model, and putting a priority on attending to the poor.
But two aspects of his speech warrant special mention. The first was the extent to which he heaped praise on the private sector and singled out a number of prominent business leaders for special recognition, possibly a first in State of the Nation reports. Even as he publicly insists that he is not bothered by the lack of growth, it is likely that the mounting evidence the economy is stalling is setting off alarm bells in the National Palace. The most recent public finance figures reveal there has been a major drop in tax collections. Should that trend endure it would make it increasingly difficult for the administration to square its multiple fiscal targets: to sustain a primary surplus, expand the President’s priority social programs, and finance his signature infrastructure projects, without raising tax rates or introducing new ones. For that reason, the government urgently needs to reactivate private investment.
The second issue was the President's recognizing that the government has yet to deliver on its public security objectives, an admission that was somewhat unavoidable given the extent of the mounting security issues visibly plaguing the country.
Unfortunately, such an enthusiastic embrace of the private sector and the rare display of self-critical candor was not accompanied by anything that would hint at a change of course with regard to any significant policy areas, even those where there is little reason to think that his combination of sloganeering, penchant for centralization, rebranding of security forces, or revamped social programs will begin to deliver the peaceful and prosperous country he has promised.
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