'Radical' change, Mexico President Lopez Obrador vows at inauguration

MEXICO CITY (Reuters) – Veteran leftist Andres Manuel Lopez Obrador was sworn in as Mexican president on Saturday, promising a radical change of course in a country struggling with gang violence, chronic poverty and corruption on the doorstep of the United States.

Mexico’s new President Andres Manuel Lopez Obrador waves while arriving to the Congress for his inauguration, in Mexico City, Mexico December 1, 2018. REUTERS/Carlos Jasso

Backed by a gigantic Mexican flag, the 65-year-old took the oath of office in the lower house of Congress, saying his administration would overturn what he called the disastrous legacy of decades of “neo-liberal” governments.

“Starting now, transformation is under way, ordered and peaceful but at the same time radical, because we will end the corruption and impunity that impede Mexico’s rebirth,” he said.

One of the biggest challenges facing Lopez Obrador is managing the relationship with Mexico’s top trading partner the United States, after repeated insults across the border by President Donald Trump.

Lopez Obrador promised higher wages for the poor and zero tolerance for corruption in his government.

The first leftist to take office in Mexico in a generation also tried to reassure business after markets crashed since the July 1 election on worries about his policies, including the abrupt cancellation of a $ 13 billion airport project.

Lopez Obrador reiterated that investments in the country of 130 million people would be safe, and vowed to respect central bank independence.

Saying his government would make savings by stopping losses from the public purse into the “sewer of corruption,” he promised not to raise national debt or taxes.

But in a reference to one of his heroes, the former president Benito Juarez who separated the church and the state in Mexico, Lopez Obrador promised his government would ensure a divide between economic and political power in the country.

Making 16 references to “neo-liberal” policies in his speech, he vowed to abolish the “regime” he said it had created.

“The government will no longer be a committee at service of a rapacious minority,” said the new president, who is often nicknamed AMLO.

He blamed the government of his predecessor Enrique Pena Nieto for causing a plunge in oil output by opening the energy industry in Latin America’s second-largest economy to private investment.

Instead, he vowed to ramp up public investment to rescue state oil company Pemex, which is suffering from debilitating debts amid falling oil production.

Pena Nieto sat impassively two seats to the left of Lopez Obrador during the sustained attack on his economic legacy, at times touching his face, wiping his brow with his hand and taking occasional sips of water.

“There were few signs in AMLO’s speech that the full reality of governing has sunk in thus far,” said Duncan Wood, director of the Wilson Center’s Mexico Institute.

“Markets will be deeply concerned about the future of the energy sector and the overly ambitious infrastructure plans without any way of paying for them,” Wood added.

However, Mexican billionaire Carlos Slim said he was reassured by the speech, saying when asked that there was “no doubt” Mexico remained a safe place to invest.

“What is needed, as he said, is to generate jobs and combat poverty. The best investment is to combat poverty,” Slim told reporters.

TRUMP FACTOR

Lopez Obrador repeated he was seeking to contain migration through a deal with Trump and Canadian Prime Minister Justin Trudeau to foster development in Central America and Mexico.

And he reaffirmed plans to create a low-tax special economic zone on Mexico’s northern border to act as the “final curtain” to keep Mexicans working inside their homeland.

He said Trump had treated him respectfully since the July 1 election, and thanked U.S. Vice-President Mike Pence and Ivanka Trump for attending the ceremony.

Since Pence is making only a short stop in Mexico to avoid a longer absence from the United States while Trump is at the G20 summit in Argentina, he will miss a lunch attended by a U.S. foe, Venezuelan President Nicolas Maduro.

Maduro did not attend the swearing-in ceremony, where opposition politicians shouted “dictator” and held up a blue banner with the words, “You are not welcome” when Lopez Obrador mentioned his name.

Under Maduro, Venezuela has suffered a debilitating economic crisis that has led to malnutrition in the once-wealthy country and forced millions of its people to migrate.

Members of Lopez Obrador’s own party, however, applauded when the new president mentioned Maduro’s name, with one member telling Reuters that they did not agree with booing another country, whatever its problems.

Some of the toughest issues Lopez Obrador faces are more severe than when Pena Nieto took office in 2012 vowing to tackle unprecedented violence. Like his predecessor, the new president says security will be his top priority.

    More than 25,000 murders, a record, were logged in 2017. Over 10,000 were registered between July and October, the bloodiest four-month period since modern records began in 1997.

Lopez Obrador, who plans to create a militarized nationwide National Guard to tackle crime, dedicated several minutes of the almost 90-minute-long speech to praise the armed forces, saying they had never been part of the “elite” or an “oligarchy.”

Addressing critics who fear he will be tempted to stay on longer than his six-year term to carry out what he calls “fourth transformation,” he said under no circumstance would he seek re-election.

Mexican presidents are only permitted to hold office for one period, although the majority held in Congress by Lopez Obrador’s coalition has raised the possibility of a constitutional change

He also reiterated a promise to hold a recall referendum during his administration, and would leave office early if he lost.

Reflecting his austere manner, Lopez Obrador arrived at Congress in a modest white Volkswagen sedan with little visible security, in contrast to the opulent lifestyles of his predecessors.

Despite his praise for the army, he has dissolved the 8,000-strong elite military presidential guard that many Mexicans associate with a distant political class, opting instead for a small group of unarmed body guards.

Slideshow (9 Images)

The move has been criticized as irresponsible in some quarters.

In another sign of change, the doors of Pena Nieto’s former official Los Pinos residence were thrown open to public visitors on Saturday. Lopez Obrador has said he will save money by living in an apartment in the presidential palace.

Pena Nieto returned to Mexico from a G20 summit in Argentina on Saturday morning, on the last official flight for his Boeing Dreamliner presidential plane, which Lopez Obrador is putting up for sale.

Reporting by Lizbeth Diaz and Anthony Esposito in Mexico City; Additional reporting by Dave Graham and Diego Ore in Mexico City; Writing by Dave Graham and Frank Jack Daniel; Editing by Alistair Bell and Matthew Lewis

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