AMLO rips rating agencies, says they are punishing Mexico

President Andres Manuel Lopez Obrador said Tuesday that credit rating agencies were punishing Mexico and state-owned companies, such as oil giant Pemex, for the “neoliberal policies” adopted by prior administrations.

The Mexican leader, popularly known as AMLO, said the rating agencies had remained “quiet” while his predecessors implemented harmful economic policies.

“They are punishing the country for the neoliberal policies implemented over the past 36 years, which were a total failure. Especially in the past few years,” the founder and leader of the leftist National Regeneration Movement (Morena) said during his daily press conference.

On Monday, Standard & Poor’s downgraded its outlook for the Federal Electricity Commission (CFE) from “stable” to “negative,” the same rating it has for Petroleos Mexicanos (Pemex) and Mexican sovereign debt.

“The government’s financial support, in order to restore credit fundamentals, falls well short of the company’s multi-annual capital investment needs,” S&P said in a statement, referring to Pemex.

The credit rating agency also revised the long-term outlook downward for 77 Mexican financial institutions, as well as for Coca-Cola Femsa and America Móvil, after downgrading its outlook for sovereign debt to “negative” last week.

“We’re going to have to pay for the mess they made,” AMLO said, referring to the policies implemented by prior administrations.

Last Friday, the credit rating agency said it was revising “its outlook on the long-term ratings on Mexico to negative from stable,” while affirming its “‘BBB+/A-2’ foreign currency and ‘A-/A-2’ local currency sovereign credit ratings.”

Fitch, another credit rating agency, also downgraded its outlook for Mexico.

Lopez Obrador said that during the “neoliberal period,” economic policy was characterized by “looting and corruption.”

“Pemex and the CFE were the companies worst looted not just in Mexico, but in the world, during the neoliberal period,” the president said.

The Morena leader said that he was criticizing the rating agencies in a spirit of “brotherhood and respect,” adding that they “remained quiet all the time that corruption reigned at Pemex and the CFE, and they rated with 10s and excellence.”

Lopez Obrador said, however, that he would respect the “decision” made by S&P.

“I’ll let actions speak for themselves,” the president said, adding that when his administration “completely” ended corruption and turned around Pemex and the CFE, the rating agencies would upgrade their outlooks.

Lopez Obrador criticized the energy industry overhaul carried out by President Enrique Peña Nieto , who governed Mexico from 2012 to 2018, saying that the reforms deprived Pemex of much-needed resources.

Peña Nieto opened the oil industry to private investment, ending Pemex’s control over the sector.

The move to end Pemex’s monopoly, in place since the company was created in 1938 as part of then-President Lazaro Cardenas’s nationalization of the oil industry, was a thorny issue in Mexico because the state-owned firm had long been a symbol of national sovereignty.

Lopez Obrador, who lost to Peña Nieto in the 2012 election, organized a campaign to try to stop the oil industry overhaul, but the effort failed.

The reforms also affected the CFE by allowing expanded investment by foreign companies in the electric and natural gas utility sectors.

The president denied that Pemex CEO Octavio Romero and Energy Secretary Rocio Nahle were at odds.

“They get along really well,” Lopez Obrador said.