AMLO's market-friendly choice

Wall Streeters worried that Mexico's front-runner in next July's presidential race, Andrés Manuel López Obrador, might pursue market-unfriendly leftist policies got a lift last month when AMLO named his economic adviser: Rogelio Ramírez de la O, 57, a Cambridge-educated economist who boasts a 20-year career in the private sector running his Mexico City consulting firm, Ecanal.

The choice was seen as a message "to let the market know that [López Obrador is] not going to deviate too far from the broad macroeconomic framework," says James Barrineau, senior vice president for emerging-markets research with Alliance Capital Management in New York. Mexico currently enjoys record-low inflation, a stable currency and a nearly balanced budget.

Some Mexican investors, however, reacted with skepticism. "Rogelio clearly understands both the market economy and foreign portfolio and direct investors," says Timothy Heyman, president of institutional investment manager Heyman y Asociados, in Mexico City. "The issue is whether he will be able to influence and educate López Obrador or be confined to a spokesman or cheerleader role."

Ramírez de la O says that as economic adviser he will focus on "bringing the pragmatism of the private sector to government." Key concepts for the AMLO program include reducing the size of government and freeing up resources for investment and social spending, simplifying red tape to make doing business easier and stimulating competition in the government-owned enterprises. "The public sector has to offer products at competitive prices," he tells Institutional Investor, alluding to Mexico's state-owned gasoline and electrical monopolies.

AMLO's overarching goal is to "attract investment projects capable of transforming the future of Mexico and to draw investments of more than $1 billion, up from the $800 million achieved during the presidency of Vicente Fox," says Ramírez de la O.

López Obrador will need that kind of money to fund his three pet megaprojects: a new international airport north of Mexico City, a bullet train between Mexico City and the Texas border and a railroad for transferring shipping containers between the Atlantic and Pacific Oceans across Mexico's narrow Isthmus of Tehuantepec.