“When we invest in infrastructure, we’re really investing in opportunity. These are investments that will build a better America. It sounds like hyperbole, but it’s real.” President Joe Biden, in a speech in January 2022, spoke to a recent shift in political culture. Recent political priorities in the United States and Mexico have contributed to a culture of creation — creating new social programs, creating new pandemic-era governmental standards, creating infrastructure and new definitions of infrastructure. President Andrés Manuel López Obrador (commonly referred to as AMLO) has his Cuarta Transformación, or “Fourth Transformation;” President Biden has his plans to Build Back Better.
Infrastructure packages have been in the spotlight on both national and political stages in the past few years — in Mexico, particularly with AMLO’s administration, and in the United States with Biden’s infrastructure priorities in his domestic agenda. What do parallel development initiatives look like in countries with such starkly different political cultures? A closer look at infrastructure policies shows that Mexico’s government takes an approach of federal directives at the cost of transparency or regulation, while the U.S. chooses process over progress.
AMLO has introduced three packages intended to revitalize the federal government’s relationship with the Mexican private sector and pump money into the country’s underdeveloped infrastructure.
AMLO has had a fraught relationship with the private sector during the first few years of his presidency — as a leftist candidate, he claimed the economy was too reliant upon private corporate interests. The Mexican economy contracted in 2019; reduced investor confidence responded to economic moves, including the cancellation of a partially built airport in Mexico City that was expected to cost $15 billion, on which at least $2 billion was already spent.
The three proposed packages — mostly privately financed — are efforts to repair relations with business leaders in the country, and uplift an economy struggling from shaken investor confidence and battered by the pandemic. Proposed in October 2020, the first phase of the plan is an almost $14 billion dollar package for 39 infrastructure projects and partnerships, including Pemex, the state’s oil firm, and Impulsora del Desarrollo y el Empleo en America Latina (IDEAL) by Carlos Slim, Mexico’s richest man.
The second package was introduced by the government soon after the announcement of the first. Comprising an investment of roughly $11 billion, the package has 29 projects in addition to three major public investment works in the Southeast — Tren Maya, Tren Transístmico, and Refinería Dos Bocas — none of which are on track to be completed by the close of the president’s term. Undersecretary of Infrastructure Jorge Nuño Lara detailed four major criteria for selecting projects:
- Private investment should total over 50% of investments in each project.
- The project’s aims should be distributed throughout the sectors of energy; communication; and transport, water, and sanitation.
- The project should be clearly defined in terms of social benefits, scope, cost, and implementation time.
- The project should not impact the national debt.
Between the first and second package, there are a total of 68 projects with a combined $25 billion dollar investment. The third package, announced in July 2021, includes up to 15 new highway works, border crossings, airports, railway works, concessions, and expansions, among others under mixed investments.
In the United States, infrastructure has been a cornerstone of the Biden administration’s domestic agenda. The administration expanded the definition of infrastructure to include children and caregiving, climate change, healthcare, and economic aid, ultimately leading to two separate bills — a traditional infrastructure bill able to garner bipartisan support, and a companion social safety net and climate bill, known as Build Back Better. The Infrastructure Investment and Jobs act includes more spending for public transit alone than AMLO’s three infrastructure projects combined are projected to cost by the end of his term. The difference in the scale of spending is almost incomprehensible.
The separation of the two bills allowed the passage of the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act, but the components of the bill that constitute the Biden administration’s new and expanded definition of infrastructure are not likely to pass the Senate due to opposition from Republicans and moderate Democrats, including U.S. Senator Joe Manchin (D-WV). The Build Back Better Act will likely die in the Senate after Senator Machin’s resolute opposition, declaring the bill “dead.” Now, in March 2022, negotiations have not reached any concrete agreements and the bill remains stalled.
This legislative resistance and power over the future of spending and infrastructure is in marked contrast to the Mexican government’s method of implementation of AMLO’s infrastructure projects: by decree. AMLO has declared the administration’s public works projects as matters of public interest and national security, issuing a decree that enables administrators to largely disregard regulators and bypass traditional approval processes. The decree shields the administration from legal hurdles, allowing for expedited temporary approval for many projects. Critics expressed concerns that this was a troubling retrogression of governmental transparency in Mexico.
While AMLO’s administration has bypassed legislative resistance, the legislative process in the U.S. has effectively blocked the Biden administration’s expansion of what constitutes “infrastructure,” and has left them with no concrete legislative wins in this effort beyond what is now considered “traditional” infrastructure. In Mexico, as of mid-January 2022 work had not begun on over half of the projects in the first two packages despite the controversial decrees that expedite projects and circumvent regulatory hurdles for AMLO’s infrastructure initiatives.
The completion of infrastructure projects in Mexico is constantly in question, while presidential administrations in the U.S. can consider $1.2 trillion dollar packages a legislative compromise and, in some cases, a political loss. The relationship between the Mexican government and the private sector cannot improve without trust and transparency, and yet it is nearly impossible to build trust without the legitimate means to follow through on the promises of an administration.
The United States and Mexico, at this moment in history, are faced with a demand to imagine and legislate a new reality in a world unrecognizable to its former self. Infrastructure is the foundation of this new reality, the foundation of the livelihood of hundreds of millions of citizens. In two countries so economically intertwined — with the U.S. absorbing three quarters of Mexican exports — the fate of infrastructure and trade is inextricably linked for both governments. If the U.S. government cannot pass its ambitious legislation, and the Mexican government cannot complete the projects it pursues, then what is the future of infrastructure? What will this future look like if we cannot meet the demand to create? Creation must be more than a political culture, it must be an actionable avenue. Perhaps, to build in the Americas, the U.S. and Mexico must build together toward a reality in which reliable and robust infrastructure is a material reality for everybody, not a legislative pipe dream or an empty promise.