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President Claudia Sheinbaum, of the National Regeneration Movement (Morena), assumed office on 1 October, succeeding Andrés Manuel López Obrador (AMLO). Her presidency reflects a balance between maintaining AMLO’s influence—evident in the approval of his constitutional reforms—and asserting her own political independence.
President Claudia Sheinbaum, of the National Regeneration Movement (Morena), assumed office on 1 October, succeeding Andrés Manuel López Obrador (AMLO). Her presidency reflects a balance between maintaining AMLO’s influence—evident in the approval of his constitutional reforms—and asserting her own political independence.
Sheinbaum faces significant inherited challenges, including high insecurity, economic instability, social polarisation, infrastructure deficiencies and strained US-Mexico relations. While her government remains supportive of private investment, companies will need to align with Morena’s social and political priorities to succeed in public-private partnerships.
The last dance
Propelled by a landslide win during the general election of 2 June, Morena’s coalition has a supermajority (two-thirds) in the Chamber of Deputies (lower chamber) and a near-supermajority in the Senate (upper chamber), where the party fell only two seats short of it. Additionally, changes in the legislative calendar produced a unique one-month overlap of the outgoing president with the new legislature.
AMLO’s last month in office therefore coincided with a Morena-dominated Congress (legislature) between 1 and 30 September, enabling him to fast-track a series of controversial initiatives that he first presented in February. The first was judicial reform, which, among other provisions, established the election of judges and Supreme Court justices through popular vote; the second transferred control of the civilian National Guard to the Defence Ministry (Sedena).
In a show of the ruling party’s political muscle, Morena secured two crucial Senate votes from the opposition within days; the Senate then approved both consequential bills against an unavailing dissent on 11 and 25 September, respectively. The party’s success, and the manner in which it orchestrated it – by allegedly staging one opposition senator’s sick leave and negotiating with another – ignited widespread public outcry. This compounded the already-existing protests across the country against the bill and backlash to Morena's perceived overreach.
Action, reaction
National and international condemnation was swift. The US and Canadian embassies, along with foreign and Mexican business chambers, investment firms and credit rating agencies, separately responded to the reforms between August and September, saying these were already impacting the economy. A sharp peso depreciation followed Morena's electoral victory, for instance. Key concerns include business and legal uncertainty – a major driver of market volatility – and a reduced appeal for foreign direct investment. Additionally, the reform jeopardises Mexico's commitment to North American economic integration, especially regarding compliance with provisions in the US-Mexico-Canada Agreement (USMCA).
On the domestic front, moreover, the approved reforms and those pending approval are likely to undercut checks and balances and reduce legal protections for the private sector. Morena’s efficiency in approving these bills attests to the party’s strength. Businesses should be ready for more adverse impacts should AMLO seek to push his influence beyond his term.
Who’s pulling the strings?
The central question regarding Sheinbaum's term remains the extent to which AMLO's influence will shape her administration. The former president will remain a larger-than-life political player, who, according to pollster Oraculus, enjoyed a 72% approval rating as of 2 September (up from around 70% throughout his tenure). He is also a pivotal figure within Morena and a unifying force for its many factions.
Sheinbaum has benefitted from leveraging AMLO’s political clout. Her narrative positions her administration as a continuation of her predecessor’s self-styled “Fourth Transformation” and will likely continue using this strategy to maintain popularity throughout her term.
But she has also laid the groundwork for her own agenda and projected independence, fashioning herself as a leader in her own right – particularly to calm the adverse market reaction to Morena’s reforms.
Her first challenge came during the make-up of her own cabinet, when she faced impositions from Morena’s more ideologically driven forces, including AMLO. She has so far been successful in selecting members with technical expertise and positioning allies in Congress. While some appointments are political – reflecting continuity with AMLO while appeasing the party’s factions – others show her inclination for experts, especially in areas she has championed throughout her career: security, energy and healthcare.
Sheinbaum has displayed more moderate stances than AMLO’s on the reforms pending approval, indicating an intention to promote dialogue with key stakeholders before reintroducing them to Congress. For instance, the initiatives on mining and water usage are likely to be accompanied by further discussion with the private sector and with more openness to reach a consensus.
Business climate
Sheinbaum’s creation of the Business Advisory Board to engage with business leaders underscores her intent to collaborate more closely with the private sector, shifting away from AMLO’s adversarial rhetoric and replacing it with a more open approach while maintaining a sense of political continuity. She is likely to leverage this pragmatism to advance Morena’s narrative, creating more favourable conditions for businesses that align with the party's political priorities.
Fostering business growth would ensure an increase in taxation to support social programmes. For this reason, collaborating with private players will likely include transitional measures to dilute the AMLO initiatives with greatest impact on the private sector – such as the reform to ban open-pit mining – and the prioritisation of consultation with Indigenous peoples for private projects.
Pending issues
Among the foremost issues Sheinbaum will face upon taking office is insecurity: she will inherit record-high levels of violence from the most violent presidential term in modern Mexican history with nearly 200,000 murders in six years. Sheinbaum will need to craft a security strategy efficient enough to address entrenched issues, including the growing infiltration of organised criminal groups (OCGs) into the legal economy and local politics.