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Leftist candidate heightens Mexico business jitters
Tue Nov 29, 2005 7:15 PM ET



By Greg Brosnan

MEXICO CITY, Nov 29 (Reuters) - A nervous first date between Mexico's leftist presidential front-runner and wary business leaders went badly on Tuesday as former Mexico City mayor Andres Manuel Lopez Obrador vowed to put the poor first and defended the state's role in the economy.

"We have to attend to everyone, listen to everyone and respect everyone, but we must give preference to the humble, poor people of our country," Lopez Obrador told hundreds of businessmen.

Although he has huge support among the poor and leads in polls ahead of the elections next July, business leaders and Wall Street investors fear Lopez Obrador would be a populist and ruin Mexico's hard-earned financial stability.

The austere widower has been conspicuously absent from business conferences attended by his two main competitors in the race and many hoped he would reach out to them on Tuesday.

Lopez Obrador, whose lead has slipped since he stepped out of the media limelight in favor of a low budget campaign tour, appeared to adopt a conciliatory tone at one point in his speech at an American Chamber of Commerce conference.

"The state does not have the capacity to bring development to the country," he said. "You also need the motor of private investment."

But he also made it clear that a government led by him would seek to play a more active role in the economy -- a jab at President Vicente Fox's conservative National Action Party (PAN), which favors a less government interference.

"Markets are good, they generate wealth," said Lopez Obrador. "But you also need the state to distribute wealth."

Business leaders listened to the speech with long faces, some envisioning a nanny state that they fear Lopez Obrador would set up if he wins. They also complained he was short on details for his economic platform.

"He was very clear in his position that the state will be the absolute ruler in politics and the economy," said Juan Carlos de la Pena, director in Mexico of U.S. office furniture manufacturer HNI International.

"The worst thing is that he didn't present a single concrete proposal to us today."

Lopez Obrador also said he would seek to revise a clause in the North American Free Trade Agreement between the United States, Mexico and Canada that proposes free trade in corn and beans. He said it would destroy Mexico's rural economy.

His comments contrasted with a punchy address by PAN candidate and business favorite Felipe Calderon, whose speech on energy and fiscal reforms -- akin to an economic pep-talk -- was often interrupted by cheers.

Roberto Madrazo, candidate for the Institutional Revolutionary Party which ruled Mexico for 71 years before Fox took power in 2000, also called for fiscal and judicial reform.