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Date: 04/10/2024
Location: Mexico
Who’s involved: New Mexican President Claudia Sheinbaum, outgoing President Lopez Obrador, Sinaloa cartel, Mexican civil society, US
What happened:
On 01/10/2024, Mexico inaugurated its new President, Claudia Sheinbaum, the first woman to lead the country in its history. After winning the elections on 02/06/2024 with 60% of votes, Sheinbaum replaced her mentor and ally of the ruling Morena party, President Andres Manuel López Obrador (AMLO). Sheinbaum promised "continuity in the change" initiated under her predecessor's reform agenda. Yet Sheinbaum is inheriting substantial political, economic and security challenges.
On 15/09/2024, a controversial judicial reform, that will allow voters to elect judges to the Supreme Court and other courts, came into effect. The approval of the reform sparked massive protests nationwide. Judicial workers called for demonstrations and strikes in coming days and weeks to oppose the new judicial legislation, claiming it would undermine the independence of the judiciary and would jeopardize judges’ impartiality while strengthening the power of the ruling Morena party. During the Senate vote, protesters broke into the building. Mexico's Supreme Court will examine the controversial judicial overhaul to decide if the reform affects the independence of the courts. The review process is scheduled to conclude by 30/11/2024.
Violence has been spreading in Mexican western Sinaloa state since fighting between two factions of the Sinaloa cartel erupted in the city of Culiacan on 09/09/2024. The trigger for the conflict dates back to last July arrest in the US of Ismael "El Mayo" Zambada, top leader of one of the main factions of the Sinaloa cartel, allegedly after being kidnapped and handed over to authorities by a member of the rival faction, Los Chapitos. In the past few weeks, intra-cartel fighting in Sinaloa state resulted in at least 53 people killed and over 50 people missing. Mexican authorities responded to the new spiral of violence In Sinaloa State with tightened security, deployment of additional 600 soldiers and intensification of arrests. This also spurred diplomatic tensions between Mexico and the US, after AMLO claimed that Washington should be considered "co-responsible" for the escalation of violence.
On 01/10/2024, Sheinbaum launched her new security strategy and identified six priority municipalities in a few states with the country's highest violence rates. She has presented her experience as mayor of Mexico City, from 2018 to 2024, which saw a 50 % drop in homicides as evidence of a workable strategy. That said, there are doubts about the feasibility of achieving these improvements in the short term and the durability and sustainability of this policy in the long term. Moreover, the new security strategy renewed concerns about the increasing militarization of public security in Mexico, which began during the AMLO administration with the transfer of the National Guard from civilian to military control.
Analysis:
New President Sheinbaum begins her term in office with a policy agenda oriented toward socio-political reforms, economic revival, and a firm security approach to address Mexico's endemic violence. Despite Sheinbaum's proud reassurance that she will continue her predecessor's political project, López Obrador's legacy poses substantial challenges and concerns for the incoming administration.
Mexico's short-term economic prospects are not particularly positive. AMLO left behind a record-breaking budget deficit. It is estimated that the Sheinbaum administration will inherit a fiscal deficit exceeding 5% of gross domestic product at the end of 2024. One of the cornerstones of the new president's agenda is to reinvigorate foreign investment, such as focusing on renewable energy, to improve the country's economic performance and successfully implement the ambitious social program that was promised to voters. However, many competing factors could discourage foreign investment, including increased violence and instability but also the recent controversial reforms passed in September 2024 that undermine the credibility and reliability of the Mexican government.
Reforms approved by President López Obrador in the last weeks of his term, including the judicial reform to allow popular election of federal, state and local judges and the elimination of seven autonomous entities and regulators - including the Federal Commission for Economic Competition (COFECE), that ensures a free and fair business competition, the National Institute of Transparency and the Federal Institute for Access to Public Information and Data Protection, and other regulators on energy, development and education sectors - have sparked domestic and international controversy and concerns. Opponents of the reforms denounce it as an attack on the country's democratic institutions through a massive expansion of executive power and erosion of the rule of law in favor of strengthening the grip on power of the ruling Morena party. The reforms have been justified by AMLO as necessary to improve institutional performance and cut unnecessary costs. Not only these reforms raise international concern over the erosion of democratic institutions and a potential authoritarian shift by the Morena party, but it also strongly deters foreign investment. Indeed, by shifting the regulatory functions of oversight from autonomous bodies to federal institutions that depend directly on the executive branch, the risk arises that these mechanisms will become arbitrary, non-transparent nor accountable, and politicized. The looseness of market regulation could result in undermining anti-competitive and corrupt practices.
The approval of the judicial reform is also souring relations with the United States, Mexico's most important trading partner, purchasing 80% of Mexican exports and the largest source of foreign direct investment. Experts expressed concern that the reforms risk undermining bilateral trade and investment relations under the U.S.-Mexico-Canada Agreement (USMCA), as it would jeopardize Mexico's ability to comply with USMCA’s standards and limit the fairness and impartiality of Mexico's judicial system toward US investors. The new Mexican President will have to navigate the diplomatic and financial tension spawned by the new reforms to secure positive relations with the US, a major partner also in countering drug trafficking, cartel-related violence, and addressing the migration crisis.
On top of this, there is AMLO's recent decision to relocate the National Guard, the main federal law enforcement body, from civilian to military control, under the Ministry of Defense. International critics fear this could lead to a proper militarization of public security. Moreover, the National Guard has been criticized for excessive use of force against civilians, especially undocumented migrants, and for committing human rights violations, including extrajudicial killings and disappearances. Created in 2019 and consisting of about 120,000 soldiers, the National Guard has been the AMLO government's main response to combat organized crime and violence in the country. Sheinbaum promised to expand the force by increasing personnel in the country's most violent areas and foster greater cooperation between government institutions, intelligence, and the judiciary to eradicate criminal organizations. Granting more functions to the federal law enforcement agency is part of Sheinbaum's new security strategy. The ambitious plan is expected to produce tangible short-term improvements in levels of violence and organized crime in six Mexican states. Yet, it is unclear how the new approach can adapt to the specific circumstances and challenges of each context and address the causes of violence.
Conclusion:
The newly inaugurated Mexican President, Claudia Sheinbaum, inherited a complex and unstable political, economic, and security landscape. While the government faces a security crisis due to the recent escalation of violence in the state of Sinaloa and extreme levels of violence in other states, the new President must also address a growing political tension, both internally and diplomatically. Though Sheinbaum has vowed to fully support and advance the political reform project of her mentor and Morena Party predecessor, López Obrador, his controversial constitutional reforms risk destabilizing the Mexican government's credibility and legitimacy. International critics argue that Mexico is undergoing a process of democratic recession and alarming militarization of public security, and this will adversely affect foreign investment, something Mexico, which is experiencing economic instability, desperately needs.
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