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Mexico's President Andres Manuel Lopez Obrador wave goodbye after delivering his first year's state of the nation address at the National Palace in Mexico City, Sept. 1, 2019.Marco Ugarte/The Associated Press

Mexican President Andres Manuel Lopez Obrador acknowledged a grim tally of violent crimes and a weak economy as he delivered the first state of the union address of his six-year term Sunday.

Homicides in Mexico are at a record high and the economy is struggling nine months into his administration. Yet Lopez Obrador, who campaigned on promises to end corruption, continues to enjoy sky-high approval ratings of more than 70% after winning the presidency in a landslide July 2018 election victory that also handed his political party a near-majority in Congress.

Stamping out corruption and impunity remains a top priority, Lopez Obrador said in his address to Cabinet members, generals, businessmen and journalists at the National Palace.

Tackling corruption is a tall task. Mexico scored 28 out of 100 points in Transparency International’s 2018 Corruption Perceptions Index, where a lower score indicates higher levels of corruption. That puts Mexico on par with Russia and behind countries such as Bolivia and Honduras in clean business dealings.

“Nothing has damaged Mexico more than the dishonesty of its rulers – and this is the main cause of the economic and social inequality, and of the insecurity and violence, that we suffer,” the president said sombrely.

Lopez Obrador has dubbed his tenure the “Fourth Transformation,” saying it represents a change akin to Mexico’s 1810 independence uprising, 1857 Liberal movement and 1910 revolution. He took office in December on promises to help the country regain its moral compass.

The transition has been bumpy, with three top Cabinet members having already resigned. Austerity measures have gutted key institutions, such as the public health system, and contributed to a growing hesitance among Mexicans to invest and spend.

Valeria Moy, an economist and director of the think-tank Mexico, Como Vamos, said the administration has been largely driven by the president’s ego and interests. She said that has led to the destruction of valuable programs, institutions and projects seemingly because they were baptized by previous administrations.

“There’s no rational process for decision-making,” Moy said.

Investors were especially spooked by the president’s decision to cancel a $13 billion airport for the capital that was one-third built. They questioned the new government’s commitment to contracts and long-term projects.

The president on Sunday touted 145 billion pesos, or roughly $7.25 billion, in savings from spending cuts and other measures that have taken effect since he took office Dec. 1. His administration has confronted fuel theft from the state oil company Pemex, slashed public salaries, eliminated a major social program and decommissioned government offices abroad that promoted investment in Mexico.

As the economy flirts with recession, Lopez Obrador said that well-being should be measured via the happiness of the people rather than by growth in gross domestic product. And the majority of Mexicans are “happy, happy, happy,” he said.

Hundreds took the streets of the capital Sunday to express the opposite sentiment. Holding signs with phrases like “Nothing to brag about,” they called on Lopez Obrador to resign.

Mexican presidents are limited to a single term in office, and Lopez Obrador reiterated Sunday a desire to hold a public referendum midway through his presidency, and in future presidencies, to determine whether those elected should carry out their full terms.

He lambasted opulence and the accumulation of wealth, saying he sees a commitment among Mexico’s private sector to create jobs, pay more taxes and accept slightly lower profits.

“Above all we are Mexicans,” he said, calling out by name business leaders such as Mexican billionaire Carlos Slim to thank them for their support.

Slim, who attended the address, is the wealthiest man in Latin America. The Bloomberg Billionaire’s Index estimates the Slim family fortune at $54 billion, or nearly 5% of Mexico’s annual economic output.

This wealth has been amassed from a country in which 44% of the people are poor, as defined by the World Bank using indicators of both income and social deprivation. One in four Mexicans gets by on less than $5.50 a day.

Lopez Obrador equated the status quo of prior governments with “prostitution,” saying it is unethical to defend the interests of a few while many struggle to make ends meet. He repeated an oft-used line: “For the good of all, the poor come first.”

Threatening his feel-good message, though, are escalating rates of brutal crime. The president said curbing violence is one of the country’s “main challenges.”

Mexico set a new record for homicides in the first half of the year – 17,608 killings, fuelled partly by cartel and gang violence in several states. Worse yet, violent crime appears to have permeated much of the country, whereas it was once confined to a few hot spots.

Lisa Sanchez, director of Mexicans United Against Crime, said Lopez Obrador’s approach to fighting crime “leaves much to be desired.” She said his administration has no real proposal to reform the criminal justice system, which is plagued by sloppy investigations, few cases solved, and collusion between police and criminals.

The public distrusts law enforcement so much that an estimated 90% crimes go unreported.

Lopez Obrador has opted against confronting cartels head-on, saying he will instead rely on a newly minted National Guard to safeguard Mexicans. Mexico’s drug war, launched in 2006, has had a hydra effect, with new, often more brutal criminal groups arising and multiplying after a gang’s leaders have killed or arrested by soldiers and police.

“The extermination war against so-called organized crime is over,” Lopez Obrador said. “The country will be pacified.”

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