Private investment requires only one thing to materialize: certainty. What inhibits it is not left-wing or right-wing policies, but the absence of clear, transparent, predictable, and enforceable rules of the game. The "Mexico Plan" is a great idea, but it rests on shaky anchors precisely because it fails to recognize the need for a foundation of certainty that is reliable and sustainable. In a word: context matters.
Certainty is not an ideological issue. In recent weeks, given the actions of the American president, all of humanity has experienced an example of what uncertainty is; in other words, the point is universal. Uncertainty prevents us from defining what we can do, from the most modest person to the most exalted businessman. Some, the speculators, will know how to take advantage of an uncertain moment, but the majority remain paralyzed, waiting for things to calm down. That's why uncertainty is destructive, as we have witnessed in these times.
The phenomenon is ubiquitous, but some, even nations that lack the rule of law in the Western sense, such as China, have resolved it well, employing alternative means to ensure certainty. Mexico is a clinical case of the lack of mechanisms that provide certainty, which is what explains, historically, why economic cycles have lasted six years; why corrupt officials who serve in one administration are prosecuted in the next; why there is always uncertainty about what the next president will be like. This has been the case since colonial times, and it is one of the main explanations why Mexico has not prospered as much as it could have. Therein lies the heart, the origin of the North American Free Trade Agreement (NAFTA), which was conceived as a mechanism to provide certainty to investors. Its success was notable in terms of economic modernization, the construction of an impressive manufacturing plant, and the stabilization of the economy in general. Unfortunately, this logic did not extend to the entire country and society, as this could have propelled all of Mexico toward its comprehensive development.
Two things threaten the country's development, being the main sources of uncertainty in the current context: one is the institutional destruction championed by the two Morena governments; the other is what we receive from Trump.
On the domestic front, it's not just that the rules are changing, that institutions and organizations that served as anchors for the functioning of various sectors have been eliminated (such as the Energy Regulatory Commission and the INEGI, to name two obvious ones), but that the sense of direction, as illustrated by the judicial reform, is geared toward eliminating checks and balances, one of the crucial elements for consolidating certainty. Furthermore, many of the reforms undertaken in recent years are of dubious rationale, more the product of AMLO's obsessions and personal grievances than processes duly discussed, argued, and negotiated to ensure the acceptance and legitimacy of the entire society. When everything depends on a hyper-powerful individual or a hegemonic party, no one—businessperson, investor, or ordinary citizen—can be sure that their rights will be respected and protected.
On the external front, the tariffs and threats issued by Trump create an environment of uncertainty that will not be easy to eradicate, even if they are eliminated in the near future. The possibility that such instruments (which, moreover, violate the USMCA) could be implemented at any moment constitutes an inexorable source of uncertainty. President Sheinbaum's administration has done everything possible to resolve this source of precariousness and instability, but it is paradoxical that it has not dedicated the same effort to building sources of certainty within the country.
Businesspeople and investors require certainty to decide to invest, employ, and grow. The existence of benign rhetoric, such as that contained in the "Mexico Plan," is a step forward, but it must be accompanied by an institutional framework that constitutes an effective counterweight to the actions of the executive branch. However, everything we have observed since September 1st goes exactly in the opposite direction. Therefore, the combination of the absence of counterweights and precariousness from abroad constitutes an enormous disincentive to growth, regardless of the presidential rhetoric or the applause of private-sector politicians.
The FTA was conceived precisely to provide investors with certainty, given the enormous difficulty that existed (and continues to exist) in the country in generating internal sources of credibility, a phenomenon that was equally evident in the PRI era and in the current Morena era, and for similar reasons: because our institutions confer so much power on the executive branch that any counterweight is rendered irrelevant. The problem for Morena is that, in the absence of the FTA, a risk that can no longer be ruled out, only the government can build sources of certainty. The challenge is therefore obviously enormous.
Logic would dictate that institutions must be built, but as Román Revueltas says: “Trump, look, doesn't have a monopoly on irrationality.”
