He passed away on Friday of last week. Luis Echeverria, President of Mexico from 1970 to 1976. He will go down in history as one of the most disastrous leaders in the history of our country. He will always be remembered as a populist and repressive ruler, possessor of an outdated egomania. Despite the political and economic disaster that his way of governing caused, his megalomania was such that he wanted to sell the idea that he had achieved international leadership among developing countries that made him worthy of the Nobel Peace Prize and candidate to the UN Secretary General. Of course no one, apart from his close group of sycophants, paid any attention to him. The only thing he got was that his successor got rid of him by naming him Ambassador of Mexico in New Zealand and the Fiji Islands.
In the early 1970s, President Luis Echeverría’s phrase became famous: “The economy is now managed from Los Pinos. This marked the end of the period known as the “Stabilizing Development”, which managed to combine economic growth with low inflation and exchange rate stability for several six-year terms. Echeverría, confident in his supposed political and economic expertise, decided to expand public spending to unsustainable levels, which generated a terrible economic crisis at the end of his term in 1976. his successor, Jose Lopez Portillo, followed the same path, managing the economy from Los Pinos. Mexico paid the cost in 1982, with a crisis from which the country took more than a decade to recover. It is timely to remember such a disaster today, that there are worrying signs about the direction our economy is taking.
One of the main losses of that crisis was the credibility of economic policy by manipulating variables for political ends. Today our country faces that same risk. The credibility of economic policy is beginning to show fissures. Last Friday, Moody’s lowered the rating of the Mexican sovereign debt and, on Monday, the rating agency itself did the same with Pemex’s debt. The country is not growing, the slowdown in the economy is having high costs.
The very difficult context that is being experienced in the international arena, to which must be added the crisis of credibility that the government is going through, can be an incentive to look for easy solutions. Judging by the way many decisions have been made, the risk that the government decides to manipulate the economy and public spending in order to obtain electoral advantages is very high.
It is essential that the government fully assume responsibility for preserving the credibility of economic policy and send unequivocal signals of this. There were many years of adjustments, of seeing Mexico suffering without access to credit and resources due to the irresponsibility of a ruling group that thought it could manipulate the economy to perpetuate itself in power. If any lesson has become clear, it is that these bets have had very high costs for our country, because nobody wins when the economy is conducted trying to achieve electoral profitability for the ruling party.
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Preserve the credibility of our economy