Dec 1, 2018

Mexico's AMLO poised to reshape government as he assumes presidency

Mexican President Andrés Manuel López Obrador in Mexico City on August 6, 2018. Photo: Carlos Tischler/Getty Images

Andrés Manuel López Obrador, the leftist former mayor of Mexico City known popularly as AMLO, was inaugurated today for a six-year term as president of Mexico.

Why it matters: The U.S. will face an abrupt change of governing style in Mexico, its third-largest trading partner and the southern neighbor with whom it‘s confronting an ongoing flow of Central American migrants and asylum seekers.

Background: The presidency has been a long-sought goal for AMLO, who came within 300,000 votes of winning in 2006 and competed again in 2012, placing second to outgoing President Enrique Peña Nieto.

  • His July 2018 victory was resounding. He won 53% of the vote, more than twice his closest competitor, and became the first Mexican president to win an outright majority since Mexico's full transition to democracy in 2000.
  • AMLO's political party, the National Regeneration Movement, and its allies now control 70 of 128 seats in the Senate and more than 300 of 500 seats in the Chamber of Deputies — majorities that will grant him ample leeway to pursue his agenda.

What to watch: AMLO ran on an anti-corruption platform and has promised a “fourth transformation” of Mexico through ambitious reforms, infrastructure projects and a raise in the minimum wage.

  • He has vowed to consult frequently with the public via referendums and to shake up government by trimming top positions, reducing salaries and benefits (including pensions for former presidents) and keeping a watchful eye on the public purse.
  • A longtime critic of NAFTA, López Obrador has expressed support for the newly signed United States–Mexico–Canada Agreement (USMCA).

What they're saying: Despite relief in the Mexican business community that AMLO will not reject the USMCA, other moves have spooked investors and sent the stock market to its lowest levels since 2014.

  • Concerns that he may revisit energy reforms (and contracts signed by foreign companies) have prompted uncertainty amid a sliding currency, now trading at more than 20 pesos to the dollar.
  • In October, before taking office, AMLO successfilly organized a referendum rejecting a new Mexico City airport that was already 30% completed, a signal that he will not hesitate to overturn decisions by the prior administration.

Apart from economic and anti-corruption reforms, curbing insecurity and violence will be key to López Obrador's success. To advance those goals, he plans to create a new “National Guard” to fight crime and focus more on development and youth engagement.

Daniel P. Erikson is managing director at Blue Star Strategies and a senior fellow at the Penn Biden Center for Diplomacy and Global Engagement.

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