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A referendum on a new airport was a test for Mexico’s incoming president — and it ended badly

When is an airport more than airport? When it is a bellwether for a nation’s economic policy.

This week, Mexico held a referendum on the construction of a new major airport at the behest of the country’s incoming president, Andrés Manuel López Obrador.

López Obrador, known as AMLO, has long complained about the costs and environmental impact of the project, which began several years ago, even as experts and members of his own transition team warned him that voiding plans for the airport would prompt an economic disaster. It would send a message to investors, critics said, that López Obrador was hostile to the private sector, that existing public contracts might not be respected.

Still, López Obrador decided that he would go ahead with the referendum Sunday, a hasty poll that drew only 1 percent of Mexican voters. When those voters rejected plans for the new airport, López Obrador called the decision “democratic, rational and efficient.”

The market disagreed. The peso fell by more than 3 percent. The stock market fell by more than 4 percent. Analysts at JPMorgan Chase cut their 2019 forecast for Mexican growth. Juan Pablo Castañon, director of Mexico’s Business Coordinating Council, said the decision “seriously hurts Mexico’s image in the world” and “sends a message of uncertainty” to potential investors.

Because of completed construction and existing contracts, the cancellation could cost the country $5 billion. It’s unclear what will be done with the existing site — the airport’s foundation is already partially laid.

Global financial markets and the Mexican business community have struggled to predict what kind of economic policy López Obrador would pursue. The 64-year-old has been a longtime fixture on the country’s political left. He has criticized the privatization of the petroleum industry and proposed a wide range of social programs without coherently explaining how they would be funded.

 During his campaign, he spent significant time trying to convince Mexicans that he wasn’t the radical leftist that some of his opponents suggested. He recruited business leaders to join his team, including Alfonso “Poncho” Romo, slated to become his chief of staff.

“Poncho is with me to help convince the businessmen who have been told we’re like Venezuela,” he said at one campaign stop.

But even as he sailed to victory by a wide margin in the July vote, the airport hovered over López Obrador as an early, important test for how he might govern.

In 2014, President Enrique Peña Nieto announced that he would launch plans to replace Mexico City’s aging airport, the busiest in Latin America. The plan was ambitious and expensive: an $8.7 billion project in the wetland in Texcoco, north of the city, whose price tag grew to more than $13 billion. Billionaire investor Carlos Slim came on board. Award-winning British architect Norman Foster did the design. By some measures, it would be the third-largest airport in the world.

Millions, or more, had already been spent on construction by the time Sunday’s referendum was held. Still, López Obrador said he would continue with the referendum, alluding to concerns that it threatens a wilderness area with aquatic birds and could lead to flooding in the area. He suggested an alternative: adding commercial airstrips to an existing military airport north of the city.

That’s the option that voters chose Sunday, even though a fraction of Mexicans came to the polls. Aside from questions of López Obrador’s economic policy — and whether he could be counted on to respect existing contacts — the episode raised doubts about whether Mexico’s next president would attempt to govern through poorly organized referendums.

“AMLO’s use of referendums in Mexico in the name of direct democracy raises concerns over the erosion of existing democratic institutions and of policy predictability,” Fiona Mackie with the Economist Intelligence Unit said in a tweet, referring to the incoming president.

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