Mexico presidency front-runner to investors: 'Don't be frightened'

MEXICO CITY (Reuters) - Mexican presidential front-runner Andres Manuel Lopez Obrador on Wednesday sent an open letter to investors, seeking to allay concerns he could damage the economy, and promising to run an austere, zero-deficit government.

Leftist front-runner Andres Manuel Lopez Obrador of the National Regeneration Movement (MORENA) addresses supporters during a campaign rally in the municipality of Santa Catarina, on the outskirts of Monterrey, Mexico April 2, 2018. REUTERS/Daniel Becerril

In the letter published in financial newspaper El Financiero, Lopez Obrador sought to strike a conciliatory tone with investors who have been concerned by his threats to cancel lucrative energy and airport construction contracts.

“We’re not rebels without a cause and we keep our word. We know how to carry out our commitments. Don’t be frightened,” wrote the former Mexico City mayor, who is now making his third presidential bid.

Lopez Obrador holds a double-digit lead in recent polls ahead of the July 1 election, and has been striving to strike a balance between appealing to his leftist base and business leaders, who fear he could destabilize the economy.

Contracts for oil exploration and to build a $13 billion new Mexico City airport, projects championed by President Enrique Pena Nieto, would be checked one by one for signs of corruption, he said. However, he did not reiterate his proposal to scrap the new airport and instead expand another hub nearby.

He also said he would pursue an economic model “similar to” one Mexico employed from the 1950s to 1970s, a period of rapid growth when the government controlled large swaths of the economy.

“It’s not our goal, of course, to revive a model from the past and mechanically apply it to today,” he said.

His opponents, Ricardo Anaya, from a right-left coalition, and Jose Antonio Meade, the ruling party candidate, who are running second and third respectively, have criticized Lopez Obrador’s economic policies as backward-looking.

Lopez Obrador has vowed to build more oil refineries and increase welfare spending, proposing to pay for such works by wiping out corruption and cutting government salaries, not through more debt or higher taxes.

“Without corruption and with an austere government we can pull Mexico from an economic crisis, from discomfort and from poverty,” he said.

As part of that, Lopez Obrador said his government “will operate the public administration without deficit.”

Lopez Obrador states in the letter that, according to the World Bank, 20 percent of Mexico’s public budget is skimmed off by corruption every year.

However, in a written response to Reuters, the World Bank said it has not published specific estimates on the cost of corruption in Mexico.

Reporting by Daina Beth Solomon and Michael O’Boyle; Editing by Sandra Maler