As finance secretary, Luis Videgaray isn't the most powerful tool in President Peña Nieto’s cabinet. Interior (Gobernación) Secretary Miguel Ángel Osorio Chong does, by virtue of his authority over most of Mexico’s internal affairs.
But Videgaray may have the harder job — not so much in managing the economy as in convincing the population that the outlook is rosy when it’s clearly not.
Confidence is the keystone in building economic health. The finance secretary’s challenge is to generate it. The task is Sysyphean.
In righting the U.S. ship in the face of opposition sabotage, Obama had one seldom-mentioned advantage. Deep inside, despite impatience and complaining, the people were pretty sure things would eventually get better.
The cautious optimism was not from legendary American optimism. It was from experience. Things always had got better, usually more so than before the rough patch.
In Mexico, things never seem to get better. The boulder barely makes it halfway up the hill before something pushes it back to the bottom. Videgaray tries his best to overcome the pessimism, but he’s in deep.
At least he can count on Excélsior to help his cause. The pro-government daily interviewed Videgaray as he attended World Bank and IMF conferences in Washington over the weekend,. The result was this morning’s lead headline “Videgaray: There’s no contraction.”
If there’s one thing you can be sure of in a Mexican daily’s headline over a story based on an interview, it’s that it will consist of a quote from the interviewee, verbatim or paraphrased, pulled out of context. Excélsior picked an odd one for a friendly piece. We’re supposed to feel better about anemic GDP growth because at least it’s not negative?
El Universal (which also runs an interview, in Q&A format) and La Jornada (publishing a canned piece from the government news agency Notimex) both helped him out more in their headlines over lower-placed stories — the former with “Mexico is protected against volatility: SHCP” and the latter with something similar.
In Excélsior, Videgaray is free to deploy the rhetorical tricks needed to spin bad news into good, to sugarcoat the indisputable fact that the economy isn’t growing anywhere near what we were told at the outset of the administration. And it’s not going to get much close during this presidency. The government’s own forecasts, delivered to Congress recently, confirm that.
Put in human terms, President Peña Nieto’s 2012 promise of high growth, more jobs, and decent wages “for all Mexicans” won’t happen.
Videgary can’t pretend that GDP growth is anything but dismal, but it’s always put in terms of being “less growth than expected.” Notice the shift from too-low growth to too-high expectations. Hey, we’re just a bunch of dang optimists. Can you blame us?
It’s also important for him to mention, repeatedly, the worldwide drop in oil prices, the pending interest rate hike in the United States, and the European crisis. All those things are real, but they also offer a frame that’s been useful to Mexican politicians across the spectrum since before independence — foreigners are doing this to us.
Then there’s the familiar declaration that the ballyhooed economic reforms haven't kicked in yet. In the secretary’s words, “If the reforms are genuinely profound as is the case with the reforms led by President Enrique Peña Nieto, they aren’t going to yield results in the very short run.”
Again, true, but again, rhetorically useful. Good times are around the corner, if we'll just be patient. But that would have more credibility if the Finance Secretariat (SHCP) itself hadn’t promised much more growth in the short run than what we ended up with.
During the campaign to get the reforms passed, we were told that the GDP would grow in 2015 at 3.8% without the reforms, and at 4.7% with them. It grew at 2.1%.
El U asked the secretary about the criticism he and the administration have been getting on the economy’s performance. He responded with a deft reflection: “We public servants are obligated to listen to criticism and accept that this is the reality. It's good for Mexico that a critical society exists. At the same time our obligation is to do our job.”
Filter out the niceties about free expression, which wasn’t at issue, and you realize what you’re hearing: “Those critics don’t know what they’re talking about, but we do.”
Videgaray can (and did) boast that the administration has done a pretty good job of insulating the Mexican economy from any upcoming volatility, or at least keeping any problem from turning into a disaster, such as those in the mid-1980s and the mid-1990s.
Again, that’s accurate. But it’s not going to win over people who don’t have enough money to live a decent life, never have, and feel like they never will. Which is to say the majority.
Mexico has been reeling from one crisis to the next for as long as most of can remember. Seeing to it that the next one won’t be too bad is probably not enough to get people pumped up about the future.