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LatinNews Daily - 05 July 2018

Mexico’s López Obrador and big business forge alliance

Development: On 4 July the victor in Mexico’s presidential elections, Andrés Manuel López Obrador, held a meeting with Juan Pablo Castañón, the president of one of the country’s main umbrella business associations, Consejo Coordinador Empresarial (CCE), to discuss future cooperation.

Significance: The CCE arguably provided more effective opposition to López Obrador during the electoral campaign than either of his principal presidential rivals. But that has now been consigned to the past. López Obrador was full of praise for Castañón who, in turn, embraced one of the incoming president’s flagship proposals: youth apprenticeships.

  • The CCE, along with Mexico’s other main business lobby, the Consejo Mexicano de Negocios (CMN), succeeded in getting under López Obrador’s skin during the campaign where his presidential rivals failed, forcing him into a number of intemperate outbursts more characteristic of his failed presidential campaigns in 2006 and 2012 than the measured and moderate tone he adopted in 2018.
  • López Obrador emerged from a two-and-a-half-hour meeting with Castañón, however, saying that they had established a “mutual confidence” that would guarantee “the country’s transformation”. López Obrador said the conversation had been “very cordial” and “very respectful”, describing Castañón as “a business leader with a civic vision and social dimension”.
  • The two men agreed to drive López Obrador’s ‘Jóvenes Construyendo el Futuro’ programme designed to guarantee 2.6m young people scholarships and job training. Businesses will be the main beneficiaries of a M$110bn (US$5.66bn) government investment package to pay the wages of young people serving apprenticeships. “We will have to come up with this funding…even if it means losing the shirts on our backs,” López Obrador said.
  • The businesses will provide young people participating in the programme with instructors and training programmes. They will not be required to provide them with a job upon completion of their training but issue them with a certificate of competence.

Looking Ahead: López Obrador said he would hold future meetings with the business sector to deepen cooperation. This should instil market confidence. His conciliatory rhetoric saw the peso strengthen against the US dollar yesterday and the Mexican stock exchange (Mexbol) rallied.