Mexico Under Pressure: Politics, Cartels and US Indictments

In this episode of The LatinNews Podcast, we explore recent political developments in Mexico, including US indictments of Mexican politicians, the influence of organised crime, and the implications for Mexico-US relations.

Guest expert Tony Payan provides deep insights into the complex web of politics, crime, and international pressure. Tony Payan, PhD, is the Claudio X. Gonzalez Fellow in US-Mexico Studies, the Françoise and Edward Djerejian Fellow for Mexico Studies, and the executive director of the Claudio X. González Center for the US and Mexico at Rice University’s Baker Institute for Public Policy. He is also a professor of social sciences at the Universidad Autónoma de Ciudad Juárez in Ciudad Juárez, Chihuahua, Mexico.

We look at events rapidly unfolding in Mexico and put them into context for President Sheinbaum as the country approaches elections in 2027 and amid signs of strain within the Morena party.

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Transcript

SPEAKER_00 0:01

Welcome to the Latin News Podcast. A fortnightly deep dive into key developments from across Latin America and the Caribbean is your host from Bogota, Colombia, general Richard McCall.

SPEAKER_02 0:15

This is the Latin News Podcast. I am your host, Richard McCall, here in Bogota, Colombia. Our very special guest is up in Texas in the United States right now. We're going to be talking to Tony Payan, PhD. He is the Claudio X Gonzalez Fellow in US Mexico Studies, the Francoise and Edward De Region Fellow for Mexico Studies and the Executive Director of the Claudio X Gonzalez Center for the US and Mexico at Rice University's Baker Institute for Public Policy. Additionally, he's the professor of social sciences at the Universidad Autónoma de Ciudad Juárez in Mexico. So welcome. Thank you. Happy to be here. It's an absolute pleasure. And of course, this feels like we're hot off the press with recent events taking place in Mexico. Perhaps, Tony, we could start. Let's just start with what happened this past Wednesday in Mexico.

SPEAKER_01 1:16

Yes, uh, the um Southern District of New York, uh federal judge, uh essentially went through the process and indicted uh at a minimum, I believe, nine politicians in Mexico, a prominent senator from the Morena Party, which is the current governing party in Mexico, uh, and of course the governor of Sinaloa. There's about nine, ten, eleven names on the indictment list. Uh clearly the uh U.S. government already made a request for extradition. Uh the foreign minister in Mexico, Roberto Velasco, uh, and a couple of other folks are already kind of pushing back. There that obviously touches on the nerves of the governing coalition. These are very central figures to the movement that was founded by Mr. Lopez Obrador way back in the day, and of course, eventually won the presidency in 2018, and now Shanebaum is a uh the president of Mexico through that uh movement. So she's up against the wall. I mean, uh I think uh uh Carney up in Ottawa and Shanebaum in Mexico had taken very different tacks in dealing with the Trump administration. Carney was a lot more aggressive, uh more vociferous. I think uh that was his strategy. And obviously Canada is now trying to diversify its relationships. Sheinbaum took a different tack. She uh tried to placate Trump. She made concessions on immigration, she made concessions on security, she made concessions on tariffs on China. Uh so she's been kind of uh stepping back. Every time he pushes, she just simply steps a little further back. Uh but you know, placating Trump is very, very difficult. And um uh you give him an inch and he asks for, you know, a mile. And so he uh is now pushing for Mexico to turn over these guys. Now, I understand where she is um uh at this point, and I also understand what Trump is trying to do. One of the major promises that Trump made was to fight organized crime in Mexico because organized crime in Mexico directly affects U.S. interests. It affects U.S. companies operating in Mexico, it affects drugs crossing the border into Mexico, and of course, we saw the scandal with immigration. So anything that happens in Mexico has a ripple effect in the United States. Uh that that's clear. I mean, these two countries are very integrated, they're neighbors. So it is of great interest to Washington that what happens in Mexico has to be dealt with. And and and honestly, Mexico had gotten out of whack. Uh I don't mean to be too rough, but um it seems, the evidence is uh kind of coming up, that Morena, the Morena Party, to be able to get into power, created a huge electoral and political coalition that seems to have included uh very questionable figures and in fact some pacts probably uh implicit and some explicit with organized crime. And I think uh that's drawn Washington's attention. Johnson, the governor, uh um, I'm sorry, the ambassador of the U.S. to Mexico, went down there with a very clear agenda to fight uh not just organized crime. We saw an incident in Chihuahua where the CIA was involved, but also to ensure that he begins to clip the ties between organized crime and the governing party in Mexico. And this is just another move, and so it puts Shane Baum in a very, very difficult position because now she has to begin to cut heads from her own uh party, and that's not gonna be easy. That's going to fracture her coalition. So fine. Uh so it is. I think it's good for the U.S. I really think it's good for Mexico. Nobody was gonna make uh make that step, take that important step in Mexico, and I think uh now Trump is forcing Shane Baum to do it. She's gonna have to decide in the next uh few days, weeks what she's gonna do.

SPEAKER_02 5:26

I fear by the time that this uh this uh episode comes out, uh that things will have moved on so far. Uh you know, it it we we broadcast always on a Tuesday and you know the couple of days uh beforehand. But uh if we if we think of the governor of Sinaloa, amongst others, uh Rubén Rocha, who has obviously now been implicated in all of this and the connections to the Sinaloa cartel, there are possibilities of similar outcomes in other states around uh Mexico as well. If we think of the you know the uh Jalisco Nueva Generación, the new generation cartel. There are other do you does the Morena Party have connections with others, possibly?

SPEAKER_01 6:12

Yes, because these connections are local. The cartels, organized criminal groups, operate in different parts of Mexico. The Cartel Jalisco Nueva Generación operates in Michoacán, in the state of Jalisco, obviously. Uh uh other states within Mexico and Central Mexico, particularly, I think, they're very strong there. I think the governor of Michoacán, Bedoya, may have some connections with the Cartel Jalisco Nueva Generation. Uh some mayors uh are uh actively involved with organized crime. You may remember when El Mencho was uh uh killed in an operation in western uh Jalisco in a small town there, uh there there was uh uh the media, not the government, the media came up with a uh uh uh I guess a payroll list. And in that payroll of the cartel were a lot of mayors and congress members and politicians from the Morena Party that were all receiving money. They um uh in the state of Sinaloa as well, where uh Jalisco Nueva Generación and the C in the in the uh you know the clearly was in a fight to death with the Sinaloa Cartel, and the Sinaloa Cartel fractured within itself. Uh, you know, they were also buying alliances in that state. And then let's go to the state of Tamaulipas, where Americo Villarreal, the governor, is also being accused by the United States to go uh of collaborating with the uh organized crimes. And I don't think those three are the only governors. There are quite a few other governors, uh uh senators. Um, one of the most critical uh alliances, I think, uh between organized crime and the government is, of course, uh the Senator Adan Augusto Lopez, a protege, a longtime friend and ally of Mr. Lopez Obrador, and possibly someone who negotiated uh campaign finance support back in 2018 or even as early as 2006. Um so that that coalition that's governing Mexico is rotten. Let's just be very clear. I don't have any sympathy for Trump. Don't mistake my words for any sort of sympathy for what is really a thug occupying the White House in Washington. I want to make that very clear. But clearly, the Mexican governing coalition is rotten to the core. And um, and I think uh if Shane Baum resists uh Washington's uh uh pressure to get these guys to New York to be tried, and obviously to provide additional information, which may unravel the coalition even more so because there are so many people involved, uh, we have already seen in Venezuela, and we've seen it with Elmayo Zambada last year, that U.S. operatives and the CIA in Chihuahua, the operations against these labs in the mountains in Chihuahua, we've already seen that the U.S. has the operational capability to go in there and take them. And that would be an even greater scandal. And that's what puts Shane Baum in a very, very difficult position. Imagine if the uh uh the operatives um from the U.S. uh dashed into Mexico and then took one of these governors, um, and they can do it. They certainly showed that they were able to go into Caracas and take uh Maduro, and they were able to, you know, go into Sinaloa and have uh Mayo Zambada, a very important figure, handed over to them, uh, and then landing in Santa Teresa, New Mexico. Uh the the capability, the the ability to do that is there. And so Shaoengbaum either begins to sort of figure out what she's got who she's gonna turn over, or uh, or have the US uh uh CIA and other uh operatives uh uh kind of flying to Mexico and take them out. And that would be really uh an awful spot to be, more more so than than where she is today.

SPEAKER_02 10:16

It's one of those things you you've you feel that the the you know she was doing, perhaps President Scheinbahn was doing enough to placate uh Trump. Let's say, you know, the capture of Mencho, killing of Mencho, capture of Mencho, Nemesio Orteguera, and then of course, like a few days ago, I want to say Audiast Flores del Jardinero, and then you know, and it kind of gave her a little bit of a space to be able to push back on those CIA operatives who uh you know who lost their lives up in Chihuahua and didn't have the rights to be there, kind of you know and and now obviously she's she's a well-on-the-back foot. How do you feel going forward then? Will be her, you know, what what what's the next move for Scheinbaum on this?

SPEAKER_01 11:04

Yeah, she's really uh between a rock and a hard place. Um she could potentially uh uh uh negotiate with Trump and begin to hand over uh minor figures. I think, although Jardinero is obviously not a small fish, um, she could potentially say, I'll send you this guy, and I'll send you that guy, and I'll send you that guy, and try to prevent uh uh you know the extraditions from reaching the very higher levels of uh her governing coalition. Uh and obviously her mentor, I'm sure that Mr. Lopez Obrador, retired out in Palenque in the jungle out there in southeastern Mexico, is probably not very happy because he uh uh I think advised her. Probably an important strategy that worked for him was essentially to say, look, I'll stop immigration, I'll get all these uh Central Americans and South Americans and all these people, I'll stop them on the border, I'll deport them, I will prevent their arrival at the US-Mexico border. I will solve the problem for you if you just leave me alone. And it worked for him between 2018 and 24 uh and during the first uh Trump administration. I think Trump was sort of relatively satisfied uh uh to resolve the uh crisis of so-called immigration crisis uh at the border. Uh this is not gonna work for Shamebault because the border is sh shut. Uh immigration is fairly under control, well over 95%. Uh the the it's it's only a trickle now. There's pretty it's it's a sealed border. Nobody's gonna go across the border without authorization. So that's solved. Uh, and and I think the next step was going to go after drug trafficking. It was one of the major promises that Trump made and cleaning out Mexico, because we have to understand that in Mexico, organized crime is facilitated by politicians. This is the one thing that I think is really very different because in the past, before 2018, those of us who looked at organized crime in Mexico, we used to think, oh, this is a business. You know, this is a, you know, they're they're doing business, it's a black market, it's drug trafficking, uh, but they don't really have any political interest. They may buy a uh chief of police here and there, you know, so they operate uh uh in relation to the state in ways that facilitates, but they're not really integrated with the state. What we saw with Morena in Mexico is that now the lines between government and organized crime are blurred. We don't know where one ends and the the other begins. And so we we have essentially kind of a narco-state of sorts, not in general, but in many different places in Mexico, and certainly the Morena Coalition, well uh in cahoots with a lot of these criminal groups in different places. And so it's very difficult to know. And and I think uh the the strategy of placating Mr. Trump by making concessions was transferred over to Shanebaum, like I mentioned, you know, she imposed tariffs on China, she uh uh continued to stop immigration or transmigration through Mexico. That's not gonna work. Trump wants big fish, and he's gonna get them whether she wants or not. So I think I bet you that there's a lot of strategizing in Mexico City. Unfortunately, for Scheinbaum, she's also facing another problem. She has an election in 2027, and um, it's coming up in about just over a year, 14 months from now. There'll be an election in Mexico. Her coalition seems to be fracturing. There's a lot of people kind of uh get getting in place to compete for uh the seats in Congress and governorship. 17 governors are gonna be elected in Mexico out of 32 states and uh uh lots of other positions, and so everybody's kind of vying for position. There's groups, tribes within the Morena Party, and you can see already uh that there's uh, you know, the the coalition is fraying, and then its own political allies, the Green Party and the Workers' Party, are beginning to sort of uh scurry away because they were threatened with a uh electoral reform that would leave them out, essentially, would make Morena a hegemonic party and they would not be able to participate actively or or um uh substantively, even as members of a multi-party coalition. So all these problems, political problems, are only gonna get worse over time. And then you got uh Trump uh putting pressure down on the president. She's got a huge problem, and the next, I think, 12, 14 months are really gonna be essential in Mexico. Something's gonna give, and I think Shane Baum is a tough spot.

SPEAKER_02 15:55

Tough spot indeed. I mean when we were discussing sort of the almost like the complete penetration of this of this organized crime and this blurring of the lines between government and organized crime. But there, you know, given the money and given the spread of organized crime, whoever else gets in, likelihood there's going to be connections as well. I mean, it's not as if you turn the page for in 2017, uh 2027 after an election. I mean, it it is it is such that the the corruption, the money involved, and the violence will ensure that this continues. So we're going to see both sides, you know, the US continuing to pressure and put uh uh let's say uh what do they put them on the most wanted lists and uh as criminal groups or designated um designated terrorist groups, right? And and so on to these cartels. Uh you just don't see a you don't see a light at the end of the tunnel for Mexico in this in this moment in time.

SPEAKER_00 16:58

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SPEAKER_01 17:15

Yeah, and I think one of the things that Trump did that was crucial in this and and sort of articulating the pressure on Mexico was precisely what you just mentioned, which is to declare these criminal organizations in Mexico terrorist organizations. Uh what that allowed the United States to do is essentially to uh concatenate a number of uh uh previously kind of isolated strategies uh into a single broad strategy to put to maximize the pressure on Mexico. Um now the the Treasury Department went after financial institutions. We saw three institutions fall in Mexico. One of them, by the way, accused of money laundering for organized crime, uh, that Vector, it's called, that was the financial institution of Mr. Romo, who was the presidential advisor, uh the the chief of staff of the Lopez Obrador administration. And so that it went that deep and that high. That institution doesn't exist. Uh BI Banco or Banco BI, whatever that bank was. And then so several the the Treasury Department is put putting pressure on the financial system. The um uh Justice Department, uh DEA, FBI, uh they're uh certainly coming after specific individuals, uh, you know, sort of weaving the uh the investigations uh uh on on the coalition and the members of the coalition and governors and mayors and senators and on and on. And then the uh Homeland Security Department, HSI investigations, uh doing some groundwork preparing uh you know all these different uh the all the evidence uh uh to be presented in court. And then you um uh you have the State Department, which is now withdrawing visas from individuals. The governor um uh of Sinaloa, uh Rubén uh Rocha, was apparently uh uh had his visa canceled uh about a year ago. It wasn't made public, it was just made public this week when he was accused formally by the U.S. government. But we've seen many mayors being detained at the border as they cross into the United States. We've seen people being denied their visas, and we saw that the elites in in Mexico, which are very prone and could kind of like traveling into the United States, are now being uh detained for uh investigations at ports of entry, whether it's by land, by air, uh and uh uh and so the in the State Department obviously uh castigating the Mexican elite. Uh so now they're traveling to Japan and Spain and other places uh to show their new money. They're almost like a corrupt nouveau-riche political class. And um uh and uh and then of course uh the Pentagon uh jumping a bit uh to uh get some operations uh drones and and and others, and of course the CIA, an independent agency, actively uh running ships and drones gathering information within Mexico. So the pressure is ma at a maximum today. We've never seen that before, but that's clearly a consequence of Mexico's own lack of cooperation. Mr. Mr. Lopez Obrador was able to prevent all cooperation, practically kicked all the agents out of Mexico, uh, and and then you know gave a care in return uh immigration. That's not working today. Uh everybody's hands are on this one uh uh uh uh I guess uh strategy by the United States, coordinated strategy across departments and agencies uh to exert maximum pressure on Shane Baum, and that's where we are today. And I I can assure you that we we haven't seen the end of it. This is just the beginning. We're gonna be really, really busy in the future to see what uh how Shane Bomb responds. Uh both had her fraying coalition at home, an important election coming up, lots of policy mistakes that she's made over time, and of course, uh U.S. pressure. So uh oh, and of course, the negotiation, the renegotiation of the USMCA, which also gives Trump enormous leverage um over Mexico because Mexico is so heavily dependent on access to US markets and capital. So the upper hand is evidently with Washington today. Again, not an endorsement of the Trump administration. I think they're awful, but hey, it's like with Maduro, right? You you You can accept both that that Maduro, that it's it's a good thing for Venezuelans that Maduro is gone and that Trump was wrong to do it. I don't know why people sometimes do this bifurcation and they say either or. It could be either uh it could it could be this and that. You know, both of them could be wrong, and yet you know you you don't have to have any sympathy for Maduro simply because you don't like Trump.

SPEAKER_02 22:25

Yes, it doesn't make you a Maduro supporter that you you know you didn't want uh US intervention on in South America and Maine. I can understand that. Talking about intervention on that, we know that the C obviously the CIA very clearly have been involved in clandestine operations within Mexico. What kind of probability do you see of actual open operations uh US forces, let's say? I mean, you know, from where I'm sitting here in Colombia, obviously huge amounts of uh cocaine that leave the country, and then you know we've had uh probably up to 200 people killed on on these small boats that have been leaving Colombia or fast boats or so on, allegedly, and and so on. What what kind of what kind of uh probability could uh uh is there that the Trump administration under the Secretary of War and so on might start um you know bombing boats leaving Mexico?

SPEAKER_01 23:18

Well, it's a couple of things here. Uh I guess uh let me take the the take it in layers.

SPEAKER_02 23:25

Yeah.

SPEAKER_01 23:26

I think the first option that she's being given is hand them over, right? That's the ideal that she begins to sort of make these offerings and take these guys and sort of put them on the sacrificial on the sacrificial table and say, look, um, you know, I need to avoid a major crisis, I need to renegotiate the USMCA, I need to clean up ha you know the the house. And so some of them will start handing them over. It'll create a lot of problems with her, with her mentor, Mr. Lopez Obrador, who's probably still very much involved. She says that she doesn't have a phone, a red phone, a direct line to Palenque, where Lopez Obrador has retired, but I think she does. And so I'm sure that they get on the phone just about every day, and she's getting advice from him every day, and so that's gonna create a lot of political tension. But that's but that's the choice that Washington is giving Shanebaum. You know, you you here's the you know, here's the folks that we want. Whatever happens to your coalition is not of concern to us, right? Um, so that's number one. The second is uh the I don't think that the probabilities of a direct intervention in Mexico are just a bit lower than they were perhaps in March or February because because I think the US is now engaged in Iran. And uh and the Pentagon is quite busy with that. They're spending a lot of money, they're asking for more money, they're running out of um uh uh you know sort of weapons out there, and they're you know, the uh the operations in Iran are taking all the attention, sucking in all the air. Uh and there is also elections in Washington coming up, and I think the Democrats are gonna do very well, and so they're going to really put a lot of pressure on on uh the Trump administration, which in my view is you know it's quite a corrupt administration. And so uh uh the the the you know the Trump family will come under scrutiny, so they're gonna be very busy. But it doesn't mean that the US uh bureaucracies, which have a life of their own, don't already have very specific operations in place, kind of a repertoire of things that they can do. We saw what they did in Chihuahua, right, with the collaboration of the uh state authorities. And I believe the knowledge of the federal government, I don't buy the idea Sheinbaum, you know, has been lying and and and uh and everybody in Mexico, you know, you just don't know what the truth is. It's the same in Washington, you just don't know what the truth is. Everybody manipulates reality uh and tries to interpret what's going on for you, but I don't believe that the Mexican government didn't know of the CIA operations in in the state of Chihuahua or other places, right? But they busted this huge uh laboratory up in the mountains in Chihuahua, and they still CIA agents um uh uh died because of a traffic accident. They just went off the road in these perilous mountains. And clearly, uh, you know, that was uh that's how we knew that the CIA is deep in there. It's probably not the only operation. It's uh I'm sure that Omar Garcia Harfuj, the Secretary of Security, knew about that. I mean, the the the CIA agents, you know, they're gonna come in, they're gonna do what they're gonna do, they're gonna they're gonna take the people they're gonna take, they're abscond the individuals that they're gonna abscond, um, and they're gonna bust the labs, they're gonna do it, uh, because Mexico is a little bit reluctant to cooperate. So uh um in in a direct intervention and invasion military type of operations on the ground, type of this kind of thing. No, I I I think the probabilities are lower, but you know, agencies are agencies, and they have their mission and they have their uh plans and they have their uh standard operating procedures and their uh programs and and certainly their operations and and they're gonna continue to implement them more aggressively with the help of uh probably opposition. We saw it. It's not uh it's not a strange thing that the state of Chihuahua is governed by the Pond, and the Pond, you know, has been known to dislike organized crime and uh and to have fought organized crime aggressively. This is what escalated the violence back in 2007 and on. Uh so uh the opposition figures in Mexico see themselves under siege, and if they have to resort to some help from the U.S. they're in their territories, they're certainly going to cooperate.

SPEAKER_02 27:46

So almost private agreements between state and international. And does this, I mean, all of this then, and I have to this points to another thing, all of this handing over and and the captures and and and of course these politicians implicated. Does this strengthen the rule of law in Mexico or likely to trigger more violence?

SPEAKER_01 28:10

Well, um, I I don't think the rule of law in Mexico can be any more compromised. I mean, if you look at what's happened in Mexico, they have essentially dismantled uh the judiciary. A lot of these judges are also um participating in organized or facilitating organized crime. Um they're now uh uh siding against uh uh folks. There was a period where the the judiciary in Mexico expanded Mexican citizens' rights. Now we're in a contraction period. Uh and many of them are compromised. Half of the judges are still to be elected sometime. And now Morena itself, which reformed the judicial system, is saying that it's such a bad reform that it's not working, that they should postpone the election of the other half of the uh judges to 2028 instead of 2027 to fix the law that they passed because they realized that it was so bad and so many incompetent and perhaps even compromised individuals were getting into the judiciary that they now needed to fix the mess they made. So that's completely gone. The prosecutorial system is completely bankrupt. It's not working at all. There's no there's no uh uh real evidence, there is no trials, there is no uh real intention to really, from the executive to really go after bad guys, and obviously they're if they're part of the political coalition, much less so. Um and then uh uh violence is high, the government is trying to sort of hide a little bit and kind of uh uh you know, sort of sort of uh uh make the numbers a little bit better by reclassifying deaths and and murders and uh uh extortion is going up, uh uh people feel unsafe. They think, you know, we often think that the murder rate is the only um you know the only thing that matters. No, the the the violence and and extortion and kidnapping and and and and theft, uh, you know, property theft and things like that are uh uh uh the hijacking of um trucks in Mexico is up. Um so businesses are operating under very difficult conditions. All that is going on. So let's not kind of fixate on the on the murder rate because it's you know it's kind of being papered over a little bit. Um the violence continues. So can it get worse? I'm not sure how it can get worse. There are places where people just cannot circulate, they can't travel, they cannot do business. It's very, very difficult. A family was just killed in Mexico City this week uh because they failed to pay extortion, and there was a message left there. You didn't pay, you all die in Mexico City, right? So when that kind of violence touches the capital, which is relatively safe, and they try to keep it as an island of uh you know uh safety, public safety, is touched by that, then you know that there are many other places in Mexico where this is just not working. Congress is completely co-opted, there's almost no articulation in efforts on public safety between governors and and the federal government. So, how can it get worse? I'm not sure. The rule of law in Mexico is broken. And let's not even talk about the fact that many of the reforms that they made um uh uh not do not just guarantee a good administration of justice for Mexicans, but they also create a great deal of uncertainty for investors and businesses. So can it get worse? Uh possibly, but goodness, it's very difficult to figure out, you know, to argue that this can certainly get worse.

SPEAKER_02 31:47

Yeah. It it it makes for very uneasy listening and of course reading about this. And I thought, you know, when you think of obviously the criminal element and the uh, you know, the organized crime, this is not just a domestic issue, obviously, in in Mexico, it's an international issue. And you what you want to be able to say to China, I mean, and I'm sure that she's strategizing right now, how can she point at domestic successes? I mean, she can't even uh point at the economy, really. I mean, why does it continue to underperform? It's everything.

SPEAKER_01 32:20

We just uh published an article on um uh you know, it's called Locked in Low Gear, Mexico's Struggling Economy. You can find the paper on our website. And and um the reason why I thought about that paper is because I said, look, the Mexican economy is in trouble, but it's not just you know one of those passing troubles that, you know, things are bad right now, but the fundamentals are good, and then we're just gonna eventually the crisis blow will blow over, much like a storm over Houston, uh, you know, and and and that'll be the end of it, and the economy will recover. No, there are some very important structural issues in Mexico. Uh productivity is um is falling. Um there is very little investment in RD. Um the educational the education system uh is in shambles, uh starved um public universities um under siege and and and really not being provided with the uh resources. The infrastructure is not being maintained. Uh we see a lot of problems with uh bridges and roads and public transport and airports and and and ports. They're just not there. The investment is not there, and they don't want to open it to private investment. Mexico could prosper enormously if all these things were just, you know, sort of be open to private investment. They would, you know, the country would have stellar infrastructure, but they don't want to because their idea is that the government should control all that. Then there are some white elephant companies that were created or projects that were created by Lopez Obrador, and Scheinbaum has insisted in maintaining uh like the Mayan train and the airport and the you know on and the airline, all of them losing money. Uh uh and and uh and now there is uh practically uh uh the a government that's broke half of Mexico's foreign debt in the last uh uh years has been acquired by the Lopez Obrador and the Shane Baum administration, which tells you that the the fiscal position of the country is uh uh tough. And and of course, if you get to over sixty percent of GDP uh foreign debt, you may lose your investment grade, which will create uh just a a very unattractive environment for investors around the world. So and she can't she doesn't seem to be able to fix this. Inflation is still very high, castigating especially the the poorest, because the poor use a lot of their money for the basics, food and fuel. And uh that kind of inflation is certainly way, way higher than the you know four, four point seven, four point five percent, whatever it is today. Um you know, it's it's it's in the twenties and thirty percent. So um uh uh the eventually I think the cash transfers the government is making to folks on the ground is not gonna be enough. Uh that's gonna be eaten away by by extraordinary food inflation. We continue to depend the energy sector is not open. So structurally, I think the economy is just in trouble. But instead of opening it to give it some oxygen, they're closing it. And so I think that is getting Shanebaum into a into a pickle, all of their own making, right? These are all things that they came with and they believe in. They don't have to be that way. There's lots of opportunities for Mexico to prosper, to become a real powerhouse. They just don't want to.

SPEAKER_02 35:44

Um, the the roots, as you say, the roots run deep into the Morena, uh let's say the Morena history in the country, López Obrador, uh obviously President Scheinbaum. Oh, well, I know that we have to wind this down. Um, and um while we're talking of an investor uncertainty and of course the large informal sector in in Mexico. Can we can we see a way forward? As final comments here uh from you, Tony. Can we see a way forward for Mexico for Scheinbaum?

SPEAKER_01 36:17

Well, I think uh she's going into her second, well into, she's already, I guess, well into her second year. I don't see that she's going to take control of the situation. She's truly committed to an economic and political model that's not going to pay off. It doesn't make the country freer, it doesn't make the economy better. The only way forward is going to be up to Mexico and Mexico's citizens. Mexico's citizens have to take action in the ballot box. They have to come to the ballot box and figure out who are the candidates that are offering uh uh kind of a better future. If they don't do that, if they continue to sell their vote for a cash transfer every month or every two months or whatever they receive, you know, five, six thousand pesos every so often, if they continue to to to be uh not citizens who exercise their right to vote effectively and uh but but rather clientele clients of the uh of the Morena Party in exchange for this these cash transfers, then the country is just gonna hobble hobble along. I think uh uh uh I I think it's up to Mexico's citizens. They really need to step up to the plate. There are options, there are other political parties, uh, there will be other candidates. They have to figure out how to say no to Morena. That's the only way out. I don't shamebaum herself in the position that she's in right now, surrounded by the problems that she's surrounded, can easily break out in any any time soon.

SPEAKER_02 37:56

Thank you. Thank you for that. Troubling times, troubling times certainly in in Mexico's so uh let me say thank you so much to uh Tony Payan, PhD. He's the Claudio X González Fellow in US and Mexico Studies, the Francoise and Edward uh de Region Fellow for Mexico Studies and the Executive Director of the Claudio X Gonzalez Center for the US and Mexico at Rice University's Baker Institute for Public Policy, also Professor of Social Sciences at the Universidad Autónoma de Ciudad de Juárez in Mexico. It has been an absolute pleasure. Uh perhaps not so happy news about Mexico, but we news we need to share and news we need to tell. Thank you so much for sharing such uh profound insights into a situation.

SPEAKER_01 38:42

Thank you, Richard.

SPEAKER_02 38:43

See you next time. See you next time. I've been Richard McCall here in Bogota, Colombia, your host for the Latin News uh podcast. We'll be back in a fortnight's time discussing more issues and stories from the region. Remember to subscribe wherever you get your podcast, YouTube, Spotify, Spotify, iTunes, and beyond, and never miss a future episode. Thank you.

SPEAKER_00 39:05

Bye bye.com.