Mexico: Lopez-Obrador Last Dance as President
Andres Manuel Lopez-Obrador's presidency faced economic challenges, with limited pandemic support, but maintained fiscal prudence. Despite attempts to expand state presence, fiscal discipline paved the way for nearshoring. As his term concludes, Lopez-Obrador aims to secure seats for his party, MORENA, and proposes significant measures, facing opposition resistance. With a high approval rate, he seeks a narrative for constitutional changes, anticipating challenges from the current Congress. Analysts await the outcome, predicting the maintenance of the Congress's current composition.
The beginning of Andres Manuel Lopez-Obrador's presidency in 2018 was troubled. Growth was restricted, and support for the population and enterprises during the pandemic was limited. The economic effects of the pandemic lagged Mexico's recovery. However, fiscal prudence was maintained, and good macroeconomic conditions were kept, despite the Lopez-Obrador administration trying to increase state presence in the energy sector and attempting to weaken electoral organs. This fiscal discipline has set the ground for nearshoring, which first started with strong demand from the U.S. and later through the construction of new plants, significantly increasing industrial production with spillover effects to services.
Finishing his mandate, Lopez-Obrador will not run for the presidency, as it is vetoed by the Mexican Constitution. At the moment, Lopez-Obrador has the task of electing his successor and securing substantial seats in the Senate and the Chamber of Deputies for his party, MORENA. During his term, Lopez-Obrador was not able to substantially amend the Constitution, as he lacked the qualified majority for constitutional amendments. The last measures of his mandate will soon be sent to Congress. First, he wants to introduce a new formula to change the minimum wage, guaranteeing an adjustment above inflation. Second, he wants the state to ensure that Mexican pensioners receive 100% of their last salary, currently set at 70%. This measure would require substantial efforts from Mexico, increasing government spending in the long term, although the short-term impact would be limited due to the still-young Mexican population. Another measure will be the election of federal judges by popular vote.
The opposition has already stated that it will not support any of these measures, and AMLO knows that, although he will send the proposals to Congress anyway. The reason for that? He wants to create a narrative for his party. With over a 68% approval rate, it is very likely he will be able to elect Claudia Sheinbaum his successor, but most of his focus will be on getting enough votes to make substantial changes to the Constitution. With the Congress rejecting his last proposal, he will have the right narrative to state that the current Congress is working against the best interests of the Mexican population. The result is yet to be seen, but so far, most analysts believe that the current composition of the Mexican Congress will be maintained.