Mexico gridlock resolved
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Emerging Markets

Mexico gridlock resolved

Political standoff abates as presidential contender backs down

Fears that demonstrations planned today in Mexico will end in violence have been put to rest by embattled supporters of the country’s losing presidential contender who took steps yesterday to avoid a much-anticipated confrontation. The move also defuses what was seen as a mounting political crisis that threatened to bring the country to gridlock.


Supporters of Anders Manuel Lopez Obrador (AMLO) decided to remove their encampments - which have blocked traffic in Mexico City’s principal avenue - and to abandon the main square where they have lived in tents for 47 days, following an announcement by outgoing president Vicente Fox that he would relocate yesterday’s independence day commemoration to avoid a showdown with AMLO’s backers


“It seemed there was no way out of the Mexican [political] crisis—now there is this,” Manuel Camacho, former campaign strategist for AMLO, told Emerging Markets yesterday in an interview.


“After the decision [to remove encampments], the scenario is quite peaceful,” Alejandro Hope, political analyst with the Mexico City-based GEA Structura consultancy, toldEmerging Markets.


The movement backing AMLO split on Thursday into two camps, reflecting a shift in political strategy and the launch of a new political party, the Broad Progressive Front, of which Camacho is also a principal leader, with the goal of working within congress to advance promote AMLO’s social justice agenda.


AMLO will continue to lead what he calls a peaceful social movement which will decide whether to declare him president and set its agenda at the National Democratic Convention scheduled for September 16. “We will articulate the pressures of the movement and have the capacity to negotiate in Congress,” Camacho said, indicating the two arms of the AMLO political movement will work in tandem.


The new party is made up of the leaders and congressional blocks of the three political parties that ran on the AMLO coalition. In Congress, those parties hold 3% of the votes, just four votes shy of veto power over constitutional reforms such as measures to open the oil monopoly, Petroleos Mexicanos, to private and foreign investment, and to modify labor rights.


Analysts say moves by AMLO’s coalition reflect declining support for Lopez Obrador. “AMLO suffered several defeats this week,” said Hope. His negative rating increased from 33 percent to 59 percent from July to September following the protests that disrupted traffic and choked off business in central districts of the capital, according to polls of the GEA-ISA Mexico City agency.


Despite what appears to be an improved political climate, president-elect Felipe Calderon has plenty of challenges ahead for when he takes office on December 1. “There is a long way to go for Felipe Calderon, he has to figure out a way to govern and has a lot of work to deal with these (AMLO) people,” says Doug Smith, chief economist for the Americas with Standard Chartered Bank in New York. “Calderon has a smaller majority in Congress than Fox and lower popularity, so the outlook for anything major from Calderon is not so good,” adds Smith.

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