Mexican President Andres Manuel Lopez Obrador’s first finance minister has issued a stern verdict on his former boss’s energy policies, describing them as harmful to the country, out-of-date and eroding investor confidence.
Carlos Urzua, who served as finance minister between 2018 and 2019, panned Lopez Obrador’s drive to tighten state control of energy in an interview with Reuters this week, after joining the opposition campaign for the 2024 presidential election.
Lopez Obrador has rolled back a liberalization of the energy market since taking office in December 2018, arguing past governments rigged policy in favor of private interests, and has moved to strengthen the country’s state-run energy giants.
The policies have upset Mexico’s main trade partners, sparking a row with the United States and Canada, which argue the Lopez Obrador administration is in breach of its trade obligations and discriminating against their companies.
“He’s trying to destroy the very economic mechanism with which we could grow,” Urzua said of energy policy in his first interview since backing the opposition against Lopez Obrador’s party in next year’s election. “So many mistakes were made.”
Urzua, who quit as finance minister in July 2019, said the billions of dollars in support Lopez Obrador had given to state oil and gas company Pemex and national power utility CFE was based on ideology and unsustainable.
Instead of trying to revive state monopolies, Lopez Obrador could have benefited from private sector investment and know-how, boosting Mexico’s electricity output from renewable sources and reducing reliance on fossil fuels.
“Mexico is different now,” said Urzua, who returned to academia after leaving government. “Lopez Obrador doesn’t understand because he’s from the 1970s.”
A spokesperson for the 69-year-old president, who remains popular, did not respond to requests for comment.
Urzua was also Lopez Obrador’s top finance official when he was mayor of Mexico City, and said he had governed well then.
But Urzua said he found Lopez Obrador had changed as president, criticizing his 2018 decision to cancel a partly built $13 billion Mexico City airport, which rattled investors.
This week Urzua joined the team of Xochitl Galvez, the main opposition presidential contender, who plans a sweeping overhaul of Pemex and more private sector participation in energy.
Still, former Mexico City Mayor Claudia Sheinbaum, who Lopez Obrador wants to succeed him, has a big lead over Galvez in opinion polls. Presidents may only serve one term in Mexico.
Urzua said Pemex should have been allowed to do more joint ventures with private partners to explore ultra-deep waters because the indebted company lacks funds and expertise.
Lopez Obrador is building an oil refinery in the port of Dos Bocas in his home state of Tabasco, a project Urzua cast as an unrealistic “folly.” The refinery’s cost has ballooned.
“No one, really no one, thought this was ever going to be feasible,” said Urzua. “It’s imperative public infrastructure projects are viable – and Dos Bocas wasn’t.”
(Reporting by Stefanie Eschenbacher; Editing by Dave Graham and Jonathan Oatis)