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Vox populist

Possibly Mexico's next president, Andrés Manuel López Obrador may splurge on social programs, but he's also economically pragmatic.

"THE POLITICAL ECONOMY HAS TO BE managed without ideologies." So states Andrés Manuel López Obrador, then mayor of Mexico City and the probable future president of Mexico. During an interview this summer with Institutional Investor in his mayoral office overlooking the Zócalo, the city's vast central plaza (see box, page 80), he continues: "Management of the political economy must be technical and professional, not ideological."

Does he mean it? Will sound free-market economic policy take precedence over leftist political ideology in a López Obrador administration? Is he a Lula rather than a Chávez?

Mexicans are heatedly debating these questions as the campaign for the July 2006 elections to replace President Vicente Fox, who cannot run again, gets under way. August polls showed that the 52-year-old López Obrador, who is popularly known by his initials -- AMLO -- is 13 percentage points ahead of his closest rival, despite the third-party status of his Partido de la Revolución Democrática, or PRD.

"Andrés Manuel is not charismatic like people who are flashy with words, but there is an aura of power or history around him," says Daniel Lund, president of Mexican polling agency Mund. "Excitement begets excitement."

Yet AMLO is a polarizing figure -- and an enigma. To some critics on the right, he is a dangerous left-wing demagogue who wants to saddle Mexico with grandiose public works projects, add to the tax burden and swell the country's debt.

"The business community is scared of another lost decade, another crisis and, should López Obrador's avowed economic policy fail, the political consequences in terms of a class-based clash," warns Luis Rubio, president of the Centro de Investigación para el Desarrollo, a Mexico City research and policy center that keeps tabs on business sentiment.

To many others, AMLO is a visionary who grasps how to achieve vital social objectives, such as reducing Mexico's grinding poverty -- four out of ten Mexicans live on less than $2 a day -- through imaginative but practical economic methods that mark him as a pragmatic populist.

AMLO's administration, says Mohamed El-Erian, a managing director of giant U.S. bond house Pacific Investment Management Co., which holds $4 billion of Mexican paper, "will be one with more emphasis on social sectors, but not at the cost of macro stability. His is another economic model -- financially principled populism. You change the emphasis of economic policies without changing the overall stance."

López Obrador's still-gelling economic agenda would feature more spending on education, health and housing. As mayor of Mexico City, he founded a university, instituted government pensions for older citizens and built low-income housing. He sees Mexico's major sources of growth as "the construction of infrastructure, public works and housing, in the initial stage. For the medium term -- modernization of the energy sector."

AMLO cites Europe's social welfare programs whenever he talks about the role of income transfers in Mexico. If he becomes president, he says, his first priority will be the people's "well-being." As mayor his slogan was "For the good of everyone, [but] first the poor." Nonetheless, he is quick to add that his other leading objectives would be "economic growth and job creation."

Mayor López Obrador set up income transfers -- a monthly pension of $60 -- for all Mexico City adults over 70; the money is disbursed via an innovative debit card system, dispensing with a huge payments bureaucracy. He also provided cash supports for poor schoolchildren, single mothers and the handicapped, and he expanded social outreach programs by starting the Universidad de la Ciudad de México and building college-preparatory schools in poor neighborhoods.

"It's basic Franklin Roosevelt," says Federico Estévez, a political scientist at the Instituto Tecnológico Autónomo de México in Mexico City. Adds López Obrador adviser Manuel Camacho: "He does not believe that a costly government is synonymous with justice. His vision is of an efficient, austere government."

Just the same, such largesse costs a bundle. Where is the wealth that a López Obrador regime would redistribute supposed to come from? That concerns not only his critics but also some of his top aides. Rogelio Ramírez de la O, president of Ecanal, an economic consulting firm in Mexico City that advises multinationals, has been counseling AMLO on his development program. He estimates that social programs would require an additional 1 percentage point of GDP, or $6.7 billion annually. Nonetheless, he says: "The plan will be capped to make sure that public finance does not get strained. López Obrador's programs are high impact but not costly or open-ended."

Funding for social and public investment is to come primarily from a crackdown on tax evasion, which now runs at a staggering 50 percent of taxes due. López Obrador's advisers estimate that tax receipts, now equal to 13 percent of GDP, could be increased -- conservatively -- to 14 percent through simplification of the current arcane tax system and more-rigorous collection. In addition, the advisers say, economic growth will boost tax revenues.

AMLO insists that cutting back on government costs and fighting pandemic corruption will yield $10 billion extra a year for federal coffers. A hard-to-miss target: state oil company Petróleos Mexicanos, or Pemex, which he plans to keep under state control (see box, page 83). One minor, but highly symbolic, austerity measure that he has proposed is eliminating federal pensions and staff -- 400 jobs in total -- for Mexico's four living former presidents. The savings? Nearly $4.5 million annually.

López Obrador sees more substantial savings from restructuring and refinancing Mexico's $150 billion foreign debt, equal to one quarter of the country's GDP. Step one, however, would be to add $125 billion in off-balance-sheet debt to the government's books to improve the terms on those loans by putting Mexico's investment-grade sovereign guarantee behind them. The result of this stratagem should be cheaper financing costs. The immediate impact, though, would be to push Mexico's all-in public debt to $275 billion. "This is going to require good work in financial engineering and in seeking the most adequate terms for refinancing," López Obrador concedes.

For a leftist, AMLO can be quite conservative in fiscal matters. He endorses the Banco de México's independence and acknowledges the importance of financial prudence. He even has an appreciation for the workings of the free market. For instance, López Obrador has promised to award more operating licenses to banks. "He has the idea of opening the market for banks to stimulate healthy competition in the market [to counter] preserves of power," explains Mario di Constanzo, an adviser to the PRD's Senate bloc.

AMLO's emerging economic program also calls for embracing the North American Free Trade Agreement (though he tells II that he will press to delay the phasing in of liberalized trade in corn and beans beyond 2008), "regularizing" the legal status of Mexican immigrants in the U.S. and doing more to help the maquiladora assembly plants along the U.S.-Mexican border compete with China.

Most conspicuously, López Obrador would promote public works projects, as he did as mayor. His concept of a bullet train to speed up business travel from Mexico City to the U.S. border at Nuevo Laredo or Tijuana may be mostly a captivating chimera, though: The cost, for a start, is likely to be prohibitive.

Other, no-less-grandiose schemes have a more-practical, less-Ozymandian cast. One dramatic proposal: creating a modern land bridge linking the Pacific and Atlantic Oceans across the Isthmus of Tehuantepec by expanding a highway traversing the 125-mile-wide spit of land from four to six lanes; developing four rail lines across the isthmus to accommodate cargo ship containers; and expanding port facilities on the Pacific side at Salina Cruz and on the Gulf side at Coatzacoalcos. The overcrowded Panama Canal is too narrow at present for the biggest ships (Institutional Investor, March 2005).

"It's a good idea to unite the Pacific and the Gulf of Mexico," contends Enrique González Pedrero, a former governor of the state of Tabasco. "The problem of Mexico is creating jobs, and all along the route of the railroad, you would develop that isolated zone and integrate it to Mexico."

President Fox and his center-right Partido de Acción Nacional, or PAN, also thought big. He promised Mexicans 3 percent inflation by 2003 and 7 percent GDP growth by 2006. Instead, GDP growth is puttering along at about 3 percent, and consumer prices are rising at nearly 4 percent a year. Moreover, per capita GDP has been stagnant. Worse, the conservative president's key reforms -- broadening the tax base to increase federal revenues from 11 to 17 percent of GDP, loosening restrictive labor laws and opening the state energy sector to private investors -- by and large fell victim to political gridlock. Nevertheless, as an oil power and a factory for the booming U.S. (recipient of 85 percent of its exports), Mexico has enjoyed a thriving stock market and paid off some of its debt. Credit not Fox but the politically independent Banco de México for keeping a solid grip on monetary policy.

Those flourishing capital markets may be wary of López Obrador, but they do not seem overly concerned about his strong standing in the polls: Spreads on Mexican bonds have risen only modestly this year. That shouldn't be construed as a backhanded compliment to AMLO, however. "The market assumes a certain political risk but is not assuming the worst of the scenarios with López Obrador -- it foresees deadlock [in Congress] and low growth and no reforms," says Alfredo Thorne, head of Latin American economic and policy research for J.P. Morgan Chase & Co. in Mexico City. Mexico's lower house, the Chamber of Deputies, sets the ceiling on fresh federal debt, the judiciary is independent, and the latest polls suggest that López Obrador's PRD would not win a majority in Congress. Only one out of five voters is PRD. "Whatever he wants to do would have to be done by consensus," asserts Thorne.

In any case, López Obrador wouldn't be as free as some past Mexican presidents to play the grand patron in dispensing political favors in the guise of social benefits. There are "rail guards in place today to be sure the Mexican economy doesn't go off the highway," says Pimco's El-Erian. Mexico's diversified economy is tightly integrated with the U.S.'s, putting a damper on policy experiments. Macroeconomic discipline to combat inflation and currency fluctuations is institutionalized not only in the central bank's autonomy but also in congressional oversight and, ultimately, in free financial markets that quickly signal their qualms.

López Obrador recognizes these constraints. "We have to seek balances," he says. "One cannot break with international financial organs, nor can one submit to their dictates. You have to seek a negotiation, seek agreements without a break in relations. Reaching agreement can be done. Yes, there is space [for formulating policy], and for that the noble trade of politics is useful."

Then again, as much as he's the front-runner, López Obrador is by no means assured of victory next July. Mexico, a young democracy with a long-dominant party -- the Partido Revolucionario Institucional -- presents special challenges for out-of-the-mainstream candidates. PRI, which lost the presidency in 2000 for the first time in 71 years, will wage a fierce battle to regain power, armed with a well-oiled party machine, ample funds and a massive publicity blitz. Fox's PAN, although a distant third in the polls, could figure prominently in postelection coalition-building -- or obstructionism. And in late August a new complication emerged for López Obrador: A couple of leftist fringe parties said they would back Cuauhtémoc Cárdenas, co-founder of the PRD. If he runs and the contest happens to be close, Cárdenas could siphon off just enough of the vote to tip the balance. "This is bad news for AMLO -- Cárdenas could remove 4 percentage points, which in a tight race could be crucial," says Alejandro Hope, a political analyst at GEA StructurA, a Mexico City consulting firm.

In that case the election would most likely go to the PRI's Roberto Madrazo. The other contender is PAN's Santiago Creel, who is considered a long shot. The two parties are expected to formally name their candidates by November. Like AMLO, both Madrazo and Creel graduated from the Universidad Nacional Autónoma de México and are in their early 50s.

For Madrazo and López Obrador, the election shapes up as mano a mano. Both are natives of Tabasco, the oil-and-gas-rich state in southeastern Mexico, and they are bitter political rivals. The pair faced off for governor of Tabasco in 1994, and Madrazo won by a slim margin. AMLO futilely challenged the victory, alleging that Madrazo had exceeded campaign spending limits by millions of dollars. Moreover, López Obrador is the son of a shopkeeper; Madrazo comes from Tabasco's political elite -- his father, Carlos, was governor and went on to become national president of the once-all-powerful PRI. Madrazo is widely perceived as allied with the PRI's old guard and old habits.

PAN's likely candidate, Creel, grew up in a prominent family with roots in Chihuahua in the comparatively affluent north and practiced law for 20 years, only gradually becoming involved in politics. He too has no love for López Obrador, having narrowly lost the Mexico City mayoral race to him in 2000.

In contrast to the other candidates, AMLO has pledged to run an austere campaign with minimal advertising. He is appealing to the public to promote his candidacy by word of mouth and hopes to draw not only independent backers but also disaffected PRI and PAN members -- whom he must win over if he hopes to be elected. His goal, though, is not just to win the presidency but also a majority of seats for the PRD in Congress.

Mexico's shifting demographics and AMLO's appeal across social classes could surprise the more cynical observers, who foresee only gridlock in Congress. The PRD's strength is mainly in the cities, which are growing, and among the masses. López Obrador's support "begins with the working poor and moves up to include salaried workers, privileged unionized workers and the fragile lower middle class, and they make up 50 percent of Mexico," notes pollster Lund. The PRI, on the other hand, is losing ground in cities and fares best in the countryside, which is steadily losing inhabitants.

That López Obrador would puzzle many foreigners and not a few Mexicans is understandable. On July 28, in his final ceremony as mayor of Mexico City, he presided over the inauguration of a new downtown plaza that includes a spacious esplanade with a sunken fountain intended to set off a future Foreign Ministry headquarters. The guest of honor was Latin America's richest person, Mexican telecommunications magnate Carlos Slim, who praised López Obrador for launching the public-private partnership that financed Plaza Juárez and other mixed-use projects downtown. For each peso Mexico City has put up, private investors have invested 20, attracted by new investment opportunities and AMLO's tax breaks. Billionaire Slim -- no anticapitalist, he -- called the arrangement a "new paradigm" that would allow Mexico to "break through its budget limitations and multiply by 15 or 20 times the capacity of national public investment."

In that same spirit, López Obrador has been reaching out to executives, meeting privately with Mexican bankers and officers of multinationals. In March he sent a letter to 100 top Mexican businesspeople pledging his commitment to market-friendly policies. His top advisers, including Mexico City Finance Secretary Arturo Herrera, who has a Ph.D. in economics from New York University, and Camacho, a PRD deputy with a master's in public affairs from Princeton University, have been talking with Wall Streeters, U.S. officials and think-tank types.

While making these overtures to business interests, AMLO also was dealing with bare-knuckle Mexican politics. President Fox moved to have AMLO impeached as mayor this spring for disobeying a judicial order to halt construction of a city road going to a hospital. The pretext: A neighbor had complained that the road encroached on his land. Although the issue was minor (and the facts in dispute), Mexico's lower house -- controlled by PAN and the PRI -- duly voted to impeach López Obrador, giving the government the right to prosecute him on the ground that he had defied a court order. Under Mexican law, anyone being prosecuted cannot run for office. Outraged, 1 million López Obrador supporters conducted a silent protest in Mexico City's Zócalo on April 24.

Addressing the peaceful crowd, AMLO reiterated his basic political platform. "Our proposal," he said, "is to establish a welfare state, an egalitarian and fraternal state, in which the poor, the weak and the forgotten find protection against economic uncertainties, social inequalities, disadvantages and other calamities." The largest demonstration in recent Mexican history accomplished its goal: The government backed down from prosecuting him, and Fox even fired his attorney general.

Yet the massive show of allegiance and the provocative rhetoric -- though "bienestar," or welfare, also translates as simple well-being -- help explain why AMLO makes members of the Mexican establishment uneasy. "They have voodoo dolls of him," quips GEA StructurA's Hope. Fauzi Hamdam, a PAN senator, says of López Obrador: "He supersedes the laws -- that's very dangerous. He has demagogic attitudes."

Longtime political activist Jorge Castañeda, who was Foreign minister under Fox from 2000 to 2002 and is now an independent presidential hopeful, says, "Instead of trying to raise the levels of leadership, he appeals to the baser instincts of those people with no democratic experience, no sense of the rule of law, who are used to corruption." That contention is fiercely disputed by AMLO adviser Camacho, who himself was briefly a Foreign minister in the early 1990s under then-president Carlos Salinas.

"Certain groups in Mexico are formed in the idea that peasants are inferior people who should not have political rights and are always manipulated by corporatism," Camacho says. "Those groups have no democratic convictions."

WHO IS AMLO, AND WHAT DOES HE WANT?

Start with the fact that López Obrador is an interloper within the Mexican elite -- and not averse to cultivating his outsider image for political purposes. He is not slick or facile or stylish or worldly. He has been abroad just a handful of times and does not speak English. AMLO has the charisma of anticharisma, in contrast to the sleek, swaggering Fox.

Poor Mexicans, however, seem to have an almost visceral affinity for AMLO, seeing him as one of their own and a politician who has their interests at heart. They identify with someone who drives a beat-up old Nissan, lives in an apartment in Mexico City's unfashionable Copilco section of town and comes from the sticks. His mayoral press conferences became national events -- and helped propel him into a position where he could make a credible run for president.

López Obrador was raised in the steamy swamplands of Tabasco, in the tiny town of Tepetitán, at the end of a dusty road running alongside the slow-moving, muddy river of the same name. "Majestic pueblo," he says, alluding ironically to his humble hometown. Yet for López Obrador, growing up in Tabasco and becoming intimately familiar with largely impoverished southeastern Mexico was an indispensable education. "Having been raised in a pueblo and studying in small cities allowed me to know better the reality," he tells II.

Andrés López, the family patriarch, came to the region in the early 1950s as a worker on the drilling rigs of Pemex. He met Manuela Obrador, who was working in her father's dry goods store in Tepetitán. They married, he left Pemex, and they set up their own store. In 1953 their first son, Andrés Manuel, was born. The couple went on to have four more boys and one daughter. The family lived comfortably but simply. Andrés Manuel and others of his siblings went to public universities. Late in life the parents, who are now deceased, ran a small hotel near the Mayan ruins of Palenque in the state of Chiapas.

The oil industry is all around Tabasco, and AMLO grew up largely during a boom. Still, tragedy struck López Obrador's family in 1969 when his brother José Ramón was killed while playing with a pistol. Andrés Manuel helplessly witnessed the accident. "It was very lamentable, at a very young age, and it affected the whole family," he says.

López Obrador went to Mexico City to earn his bachelor's degree in political science and public administration at the Universidad Nacional Autónoma de México. By all accounts, he did not distinguish himself as a student. The topic of his thesis, however, is revealing: the creation of the Mexican state in 1857 under President Benito Juárez. A hero of AMLO's, the liberal Juárez restored the republic after France meddled in Mexico's affairs, established separation of church and state, and reined in the military.

López Obrador returned to teach at the Universidad Juárez Autónoma de Tabasco, in the state capital of Villahermosa. An attractive student with large, gentle eyes, Rocío Beltrán, caught his attention. They married and had three sons: José Ramón, now 24; Andrés, 18; and Gonzalo, 14. Generally regarded as López Obrador's most important political adviser, Rocío died in January 2002 after a long battle with lupus.

As a widower, López Obrador has devoted more time to his children. "Only very exceptionally do I accept a lunch invitation," he tells II. "I go home and have lunch with them almost every day. We have a good relationship. They are good boys; their mother left them with the proper values."

In 1976, López Obrador entered politics at 23, joining the PRI, which ruled Mexico as a virtual one-party state. The following year he was appointed to head the Tabasco operations of the National Indigenous Institute, a federal development agency, and took his wife and young son to live in a shack among the Chontal Indians. His predecessors had chosen to stay in the capital.

After five years, López Obrador sought out González Pedrero, a Tabasco intellectual and former head of the political science department at the Universidad Nacional Autónoma, and offered support for his gubernatorial bid in Tabasco. González Pedrero took AMLO aboard his campaign. "I called on him because of the knowledge Andrés Manuel had of local problems, and I sympathized with the way he worked" with indigenous communities, he says. "My idea was to listen to people, that the people would tell me how they see the problems."

Once in office, González Pedrero named López Obrador as president of the PRI in Tabasco because, he says, he displayed rare political intuition. Nonetheless, AMLO's first political job went badly. He alienated party members by pressuring Tabasco's mayors to implement PRI rules requiring internal elections to select local leaders. "He tried to make things move quicker than was my style," says González Pedrero, who felt he had no choice but to remove the upstart. He made AMLO his chief of staff instead. López Obrador, however, resigned from the post on the first day, persuaded by his friends that the position removed him from the political arena, the former governor says.

Ironically, his next job was even more on the periphery of politics. He returned to Mexico City to head the social promotion department of the National Consumer Institute, a government agency. While there he wrote two books chronicling the history of Tabasco. He was still a PRI adherent.

But in 1988 the party suffered the deepest schism in its history. The former governor of Michoacán state -- and prospective presidential candidate -- Cárdenas, who was the son of a revered former president, Lázaro Cárdenas; and Porfirio Múñoz Ledo, who had been an Education minister, an ambassador to the United Nations and president of the PRI, quit the party when it refused to hold an open primary to choose its presidential candidate. Cárdenas ran for president as the candidate of a coalition of small parties in the July 1988 election -- and likely won in a murky race. But the breakdown of vote-tallying computers on election night put the PRI's Salinas in power.

Disgusted by this turn of events -- he would later write a book denouncing PRI election tactics in Tabasco -- López Obrador quit the party and joined up with the defectors. He ran for governor of Tabasco in November 1988 on the slate of Cárdenas's coalition, the Frente Democrático Nacional, but lost. When Cárdenas co-founded the PRD in 1989, López Obrador became its first president in Tabasco. Immediately, he set about organizing the party, stumping the state indefatigably in sweltering heat. The PRD's first local committee in Mexico was founded by López Obrador in Macuspana, where his brother José Ramiro is today the mayor.

The 1991 municipal races in Tabasco prompted López Obrador to again denounce election fraud, which he alleged included the nullification of pro-PRD ballots in tight races. He later led a march -- the "Exodus for Democracy" -- from Tabasco to Mexico City to protest the vote count. Ultimately, the state governor was forced to resign, though his term was served out by another PRI politician.

In 1996, López Obrador was elected president of the national PRD, and the party soon began to make electoral gains. In 1997, Cárdenas became mayor of Mexico City and PRD candidates secured 126 of the 500 seats in the Chamber of Deputies -- one seat more than the traditional opposition party, the PAN. The PRD owed its success to the pull of the respected Cárdenas and to López Obrador's tireless training of poll watchers and organizing of campaign workers.

Those successes didn't go unnoticed. In 2000, AMLO was named his party's candidate for mayor of Mexico City; Cárdenas had stepped down to run for president. López Obrador won by a narrow margin. Victory placed him in charge of what arguably is Latin America's biggest metropolis: Mexico City has a an official population of 8.5 million but, counting urban sprawl, encompasses 20 million, or roughly one fifth of all Mexicans.

As mayor, López Obrador had a platform for launching himself nationally. He was at his office in the municipal building by 6:30 every morning, giving his daily press briefing. These now-famous news conferences made him a celebrity. In a typical session he might discuss, among other topics, progress on the elaborate elevated freeway system that his administration was constructing on the city's outskirts. A workaholic, AMLO didn't take a vacation that anyone can remember, and he made it into the office for his early-morning press conferences even on Saturdays and Sundays.

Associates praise him for his ability to focus. In 1998, when López Obrador was looking into the government's controversial $90 billion bank bailout -- he later wrote a highly critical book about it titled Open Dossier -- he was presented with a chart showing the rescue's impact on public finances. AMLO scanned the Excel table. "These do not add up," he said, pointing to a column where the figures did not in fact tally. Ecanal's Ramírez de la O, recounting that story, adds: "Anything López Obrador decides to look at, he will look at. There is no question that he's going to be frivolous or superficial."

AMLO comes to meetings better prepared than most of his advisers, say associates. "If you show him things with numbers, he listens," says PRD adviser di Constanzo. After poring over facts and figures, he doesn't hesitate to make a decision. López Obrador, confides one close observer, functions as his own war room. "Once decided, he is all hands-on," notes Ramírez de la O. "When working on priorities, he dismisses requests for meetings and many pressures to get involved in other projects. It is the combination of where to put your energy and at what time that is unusual, and you only find it with very successful top businesspeople." During the final phases of the construction of the Mexico City beltway, López Obrador donned a hard hat and visited the site every day.

AMLO's leisure activities are baseball -- a passion from childhood -- and reading. He plays ball once or twice a week. He used to be a center fielder but is now a first baseman. "It's a more comfortable position," he explains. "With the years you lose mobility and strength in the arm."

His favorite reading is history, though he also enjoys literature and reads "a bit of economics," he tells II. He recently finished The Gay Nineties by former World Bank chief economist and Nobel Prize winner Joseph Stiglitz, a ferocious critic of Wall Street excesses; Blindness, a novel about societal breakdown by Portuguese Nobel Prize winner José Saramago; and Pinochet, Vivir Matando, a history of the regime of the former Chilean dictator by renowned Mexican journalist Julio Scherer.

López Obrador has rarely traveled outside Mexico. In 1991, though, he visited the U.S. on a trip sponsored by the State Department and spoke with government officials in Washington and Wall Streeters in New York. Critics chide him for lacking knowledge of the world outside Mexico. But as José María Pérez Gay, a former Mexican ambassador to Portugal and one of López Obrador's top advisers on international affairs, points out: "His common sense is overwhelming. He feels it is not necessary to travel abroad because the problems are here, not outside." The candidate plans visits to the U.S., Chile and Spain in the next couple of months. He will seek to build bridges with Chile's Ricardo Lagos and Spain's José Luis Rodríguez Zapatero, successful left-wing leaders who have proven to be moderates once in power.

Some see López Obrador's thinking as representing a trend in Latin America toward governments' paying greater heed to social needs without disrupting their economies' basic balances. "Ideology in terms of economic models really is a thing of the past in Latin America," asserts economist Jerome Booth, head of research at Ashmore Investment Management in London, which holds $10 billion in emerging-markets debt. "There is broad consensus about what is prudent economic policy, and in the past 15 years, there has been a shift of discussion from economic models to distribution [of wealth], which is really the issue."

The reality in Mexican politics today is that voters are disillusioned and willing to split their vote. "Fox couldn't deliver, and with the PRI there is a question about honesty," says Michael Shifter, vice president for policy at the Inter-American Dialogue, a Washington think tank. "López Obrador's appeal is that it now seems he could be both effective and honest, and that's what most Latin Americans are looking for."

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