Leadership failures in Mexico and Brazil in taking the coronavirus pandemic seriously are hitting Latin America’s two largest countries doubly hard, as they cope with economic downturns in addition to a pressing public health crisis.
Mexico, however, could be less suited to a swift recovery, Michael Reid, “Bello” columnist and senior editor at The Economist magazine, said in a recent conversation with the World Affairs Council of Atlanta.
That’s partly because of the personal ethos of austerity embraced by Andres Manuel Lopez Obrador, the populist Mexican president elected in 2018, who famously takes coach class on the rare occasions he travels by air.
“He doesn’t actually believe in emergency credit programs to keep business alive,” Mr. Reid told council President Charles Shapiro, noting the president known as AMLO’s style has resonated with Mexicans weary of corruption under the PRI, which ruled for 18 years before Mr. Lopez’s election.
Because he has so shrewdly crafted an image as a “savior” that will clean up Mexico, Mr. Lopez remains popular, with a nearly 60 percent approval rating even after slippage post-pandemic.
“I think there’s little evidence to believe that his government will actually reduce corruption in Mexico. But his political communication of that message has been extraordinarily effective,” Mr. Reid said. “He retains the faith of a significant number of Mexicans who see him as being on their side, as being one of them, and who have been disillusioned by the political alternatives that Mexico had in the previous years.”
Mexico has enacted some modest social programs to fight the effects of COVID-19, but nothing on the scale of Brazil, whose response has been largely in line with other countries that have provided emergency payments for poorer segments of society and loans from the central bank.
“So I think that the fall in the economy in Brazil will be less great than Mexico, and I think that the recovery will be faster,” Mr. Reid said, especially given that Mexico is the more open economy, having been affected more by declines in tourism and trade.
But faster is relative, said Mr. Reid, who noted that both Mr. Lopez and Brazilian President Jair Bolsonaro are now facing the ramifications of their early skepticism over the virus.
Mr. Bolsonaro, who earlier this month contracted what he had previously called a “little flu,” even actively encouraged citizens to flout restrictions imposed by Brazil’s state governors, only coming to terms with wearing a mask after Brazil emerged as a center of the pandemic and deaths began to mount. Brazil now ranks second only to the United States in reported cases, with more than 2.3 million.
Even still, Bolsonaro “governs through polarization” and retains a critical level of support from his conservative and populist base, which will likely shield him from impeachment, even as concerns grow over his handling of a pandemic that has killed 85,000 Brazilians, with remote regions being hit especially hard.
Mr. Bolsonaro has a cozy relationship with the military, from which he has appointed members and top ministers, but an “adversarial relationship” with both the Congress and the judiciary, which has launched investigations into his sons, Mr. Reid said. The former army captain has been critical about democracy and has waxed nostalgic about the period of military dictatorship between 1964-85, Mr. Reid said.
Yet economically, at least, Brazil has embraced more openness to the world, reforming its pension system to right its fiscal ship and making moves to open to the world, including by negotiating a free trade agreement with the European Union.
The future of that deal could be tied in part to the U.S. presidential election. A Joe Biden administration might be more strident in joining with Europe to pressure Brazil to address environmental concerns surrounding greater development in the Amazon or civil and human rights issues.
U.S. president Donald J. Trump’s willingness to focus mostly on trade issues and little on accountability has worked in favor of Mexico’s Mr. Lopez Obrador especially, despite the fact that the revamped NAFTA deal came out arguably worse for the country, Mr. Reid said.
“President Lopez Obrador is happier to have a fellow populist nationalist in the White House than a kind of liberal, interventionist Democratic President who might be more concerned about human rights and governance issues in Mexico, whereas, President Trump doesn’t care. He only cares about things about the wall and about things on his side of the wall.”
Perhaps because of that, Mr. Lopez made his first foreign trip to Washington in early July to celebrate the launch of the new USMCA trade agreement with Mr. Trump, showing that despite the Mexican leader’s fraught relationship with the private sector, the North American trade relationship is too important to undermine.
Under another leader, Mexico’s traditional connectedness to the world economy could position it well to take advantage of what many believe is a coming shift in global supply chains away from Asia.
“I see a huge opportunity on paper for that in Mexico. But tragically, I think that President Lopez Obrador is not very interested in that and the moves that he’s made against some businesses have undermined trust,” Mr. Reid said, adding that Colombia and a few Central American locales may pick up where Mexico leaves off.
The trajectory of Brazil’s future ties with the U.S., meanwhile, are beholden to the politics of the year. A second Trump term could mean even closer economic links, assuming the pandemic subsides, while a Biden administration may pull back.
Mr. Reid expects municipal elections in the fall to give a sense for the way the political winds are blowing in Brazil.
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Members can view a recording of the event at wacatlanta.org.
