48 TheAmericas TheEconomistDecember4th 2021
but the infrastructure outside—from roads
to ports—is of poor quality, says Mr de la
Calle. Businesses complain of problems
obtaining inputs. The likes of Panasonic
and Össur import many of the materials
they need. Similarly Össur nearly pulled
out of Tijuana because it could not find a
company to apply chemical processes to its
products, which include prosthetics. (bap
eventually stepped in.)
Some of the causes of Mexico’s pro
blems are outside its control. When the
government of the United States talks
about “nearshoring”, it really means on
shoring, says Bill Reinsch of csis, a think
tank in Washington. It can be protectionist
in negotiations with Canada and Mexico.
usmca, the revised trade deal agreed in
2020 between the three countries, is strict
er than its predecessor, nafta—indeed it
was negotiated in part to preserve manu
facturing jobs in the United States.
But Andrés Manuel López Obrador,
Mexico’s populist president, has not
helped. In 2018 his administration re
placed one of the most businessfriendly
(if corrupt) governments in Mexico’s histo
ry, that of Enrique Peña Nieto. Mr López
Obrador, in contrast, seems to enjoy un
nerving investors.
Soon after taking office he cancelled a
new airport for Mexico City, after the dig
gers had been working for three years, at a
cost of at least $5bn. In 2020 he also pulled
the plug on a $1.4bn investment in a new
factory by Constellation Brands, an Ameri
can brewer, which was near completion.
He has weakened independent regulators
by absorbing them into government or
slashing their budgets.
Mr López Obrador is also reversing his
predecessor’s opening of the energy indus
try to private firms and favouring ineffi
cient stateowned outfits. Along with mak
ing electricity dirtier and less reliable, this
sends forbidding signals to investors. In
November the boss in Mexico of General
Motors (gm), an American carmaker, said
the company would not invest further in
the country without laws that promote renewableenergy.Earlierthisyeargmhad
said it wouldinvestmore than $1bnto
makeelectric carsinMexicofrom2023.
LastyearTesla,aleadingmakerofsuch
cars,consideredopeninga factoryinMex
icobutoptedinsteadforTexas.Although
Tesla did not explain its reasons, Elon
Musk, itsboss, hasgrumbled aboutthe
Mexicangovernment’sclosureofsomeof
thefactoriesofitssuppliersduringcovid
relatedlockdowns.
Mexico risks “shooting itself in the
foot”bynottakingadvantage ofshorter
supply chains, says Michael Camuñez,
whostarteda seriesofmeetingstoboost
theeconomicrelationshipbetweenMexi
co andthe UnitedStates duringBarack
Obama’sadministration.(MrLópezObra
dorandPresident JoeBiden relaunched
this“economic dialogue”inSeptember.)
UnfortunatelyitisMrLópezObradorwho
hashisfingeronthetriggerand,ifhispast
treatmentofforeigninvestorsisanyguide,
seemslikelytopullit.nTaking off (for now)
United States, share of aerospace imports from
%Source: US ITC *To September43210
21*1510052000951989ChinaMexicoHondurasA leftward turn
H
ondurans oftenvote with their feet.
The United States says it caught
320,000 of them trying to cross its border
illicitly last year. That is equivalent to 3% of
Honduras’s population, though many were
doubtless caught more than once.
On November 28th Hondurans voted in
a presidential election. Some hope that the
apparent winner, Xiomara Castro, will help
them build a country they no longer wish
to escape. Preliminary results suggest that
Ms Castro, of the leftist Libre party, has
won the presidency, ending 12 years of rule
by the National Party. With her allies, she
may secure a majority in Congress, too. Ms
Castro, the wife of a former president, Ma
nuel “Mel” Zelaya, rose to prominence by
leading protests against his ouster in a
coup in 2009. Her win is part of a backlash
against organised crime in Honduras, and
against incumbents across Latin America.
The poll was peaceful. At 68%, turnout
was the highest for over a decade. Fears of a
repeat of the fraud and violence seen in
2017 proved unfounded. Back then at least
29 people were killed when President Juan
Orlando Hernández was reelected in mur
ky circumstances—and after the Supreme
Court had changed the constitution to al
low him to run for a second term. Ms Cas
tro will be the first female Central Ameri
can president.She will have a lot to do. Mr Hernández,
one of the most unpopular leaders in Latin
America, is accused of having turned Hon
duras into a narcostate. In 2019 he was im
plicated in a trial in the United States that
found his brother guilty of drug trafficking.
(He denies any involvement.) The country
is the secondpoorest in the region, after
Haiti. In 2019 around half the population of
10m lived on less than $5.50 per day. The
covid19 pandemic has made matters
worse. And although the murder rate has
fallen by half since 2011, it remains the
fifthhighest in the world.
Ms Castro talks about rebuilding de
mocracy, creating a fairer economy and
getting rid of corruption. She says her gov
ernment will work for poorer people, such
as teachers and farmers, rather than elites.
Some promises, like selling the presiden
tial plane, should be relatively easy to keep
(although Mexico’s populist president, at
tempting the same gimmick in 2018, could
not find a buyer). But other ideas are either
vague or improbable.
For example, she has promised on the
first day of her presidency to organise a
vote for a body to write a new constitution.
Lester Ramírez of the Association for a
More Just Society, an ngo, reckons she may
delay these plans and focus on job creation
instead. Ms Castro also says she will tackle
corruption by inviting in a unbacked
commission to come into the country,
along the lines of the one in Guatemala
which helped prosecute two former presi
dents and numerous officials. Tiziano Bre
da of the International Crisis Group, a
thinktank, suspects that donors may be
loth to back such a body, after the one in
Guatemala was booted out by the govern
ment in 2019.
It is also unclear how her government
will be able to afford to create more gener
ous social programmes or support smallXiomara Castro will be Central
America’s first female presidentRed and ready to rule