Mexico leftist vows to block reforms, warns oil firms

By Simon Gardner CATEMACO, Mexico (Reuters) - Fiery Mexican leftist Andres Manuel Lopez Obrador has vowed to stop the government's energy and tax reforms and hopes to lead even bigger protests than when he brought central Mexico City to a standstill after narrowly losing the 2006 presidential election. A colorful renegade and a former Mexico City mayor, Lopez Obrador accuses President Enrique Pena Nieto of trying to sell off Mexico's assets by seeking to lure foreign capital into the state-controlled energy sector. Pledging to battle what he calls a planned privatization of Mexico's vast oil reserves, Lopez Obrador swears he will work to undermine any contracts agreed with the government. "We're not going to stop until we manage to block these reforms," he told Reuters in an interview on Friday in a lush, lakeside garden in Catemaco in the Gulf state of Veracruz. Pena Nieto has pinned his hopes of ramping up lackluster growth in Latin America's second largest economy on attracting more investment into the oil industry, and improving Mexico's meager tax revenues. In 2006, Lopez Obrador drew hundreds of thousands of supporters onto the streets of Mexico City to protest when he lost the presidency to Pena Nieto's predecessor, Felipe Calderon, by less than 1 percentage point. Declaring himself Mexico's legitimate president, his demonstrations triggered transport chaos, choked tourism in the capital and prompted businesses to shutter storefronts. After losing to Pena Nieto in last year's election, he again claimed he was robbed and led new protests, but they were more subdued. Now, the 59-year-old is seeking to take to the streets at a time when other protests have already started to disrupt life in the capital. Since last week, militant teachers have staged blockades in Mexico City against an education reform that Pena Nieto has said is also central to the country's future. On September 8, the very day Pena Nieto is expected to unveil his fiscal reform, Lopez Obrador plans to launch an anti-reform protest at the heart of the city he once governed. The silver-haired firebrand would not be drawn on whether he planned indefinite street protests, saying he had yet to decide - but he hoped that they will be "the same as or bigger (than 2006) because the circumstances call for it." "We are going to struggle peacefully, without falling into the trap of violence, to prevent the privatization of oil and tax increases," he said in Veracruz. Pena Nieto insists he is against privatizing Pemex and has no plans to list the company. His pending fiscal reform is expected to tax food and medicine, a political hot potato Lopez Obrador is also firmly against. Only if the government agrees to put the reform proposals to public referendums will he relent, Lopez Obrador said. Pena Nieto wants to change the constitution to give private companies incentives to invest in oil and gas fields alongside lumbering state oil monopoly Pemex, whose output has fallen by a quarter since peaking in 2004. BIGGEST THEFT 'OF ALL TIME' Lopez Obrador also had a message for oil companies that may sign contracts to share in profits tapping Mexico's oil: he will do all he can to cancel them if he ever comes to power. He called the oil reform the biggest theft "of all time". "I have a recommendation, not a warning, for foreign oil companies," he said. "Think clearly, because a franchise from an illegitimate government is not enough. We are not going to stop insisting the oil is ours. And we will get it back." "They have no certainty. Let it be clear to them that we are not going to allow it because we see it as a robbery of the Mexican people and the nation," he added. Once a member of Pena Nieto's ruling Institutional Revolutionary Party (PRI), Lopez Obrador defected in 1988 to help found the leftist Party of the Democratic Revolution, or PRD. He later split with the PRD too and now constantly travels the country, campaigning against Pena Nieto's reform plans with an eye on the next presidential race in 2018. He founded his own political movement and has the backing of some small left-wing parties as well as many lower-income supporters who have traditionally backed the PRD. The PRD is also against changing the constitution to open up the oil sector, but has kept its distance from Lopez Obrador. "He has chosen his path, his own strategy, and we have chosen ours," said the PRD's chairman, Jesus Zambrano. Whether Lopez Obrador, often known by his initials AMLO, can disrupt the reforms may depend on whether the government can defuse the teachers' protests. Otherwise the demonstrations could snowball and shake the nerve of Congress. "I don't think AMLO at this point can do more than create a cacophony," said George Grayson, a Mexico expert at the College of William and Mary in Virginia and biographer of Lopez Obrador. "A lot will depend on whether or not (Pena Nieto) can achieve a reasonable understanding with the teachers," Grayson added. "If Pena Nieto capitulates with the teachers, it's going to change the dynamics and it's going to make it easier for someone like Lopez Obrador to mobilize support." So far, Pena Nieto has shown a deft touch in dealing with Congress, where he lacks a majority. Right after taking office, he sealed a pact with opposition leaders to negotiate reforms and key figures from those ranks are still holding the line. "Even with people on the street, we need to push through the energy and tax reforms," said Jose Trejo, a senior lawmaker from the opposition conservative National Action Party, or PAN, who heads the finance committee in the lower house. (Editing by Dave Graham, Kieran Murray and Mohammad Zargham)