Claudia Sheinbaum’s first mission as president-elect: signals to calm the markets

The overwhelming victory in Mexico of the Government party, Morena, has sowed concern in the economic sphere since Monday, June 3, when it became known that the power accumulated in the legislative chambers was so strong that the political reforms proposed by the president, Andrés Manuel López Obrador, before concluding his mandate on September 30, could be approved without problems. That kind of rollercoaster has been received with falls in the national currency, rebounds and new falls this week. The peso has fallen 8% since last Sunday’s elections, the worst week in four years of strength, reaching an exchange rate of 18.30 per dollar.

The president-elect, Claudia Sheinbaum, has worked to calm the markets and has held talks with the International Monetary Fund, the World Bank, the OECD, the powerful investment manager BlackRock, as well as the immediate announcement that the current minister of Treasury, Rogelio Ramírez de la O, will remain in his position for an indefinite period. But peace has not just arrived.

López Obrador is not contributing to tranquility, quite the opposite. In 2021, his party lost enough of a majority in the legislature to approve a package of 20 reforms, some of which require modifications to the Constitution. For that reason, he called on the people to vote en masse to now have one last opportunity to carry out his measures, which include a change in the judicial branch by which the judges of the Supreme Court and others would be elected by popular vote. , rather than appointed by the Senate. He also intends to eliminate some independent autonomous bodies, such as those that regulate economic competition, telecommunications, the energy market or those in charge of public transparency, among others. The opposition has described these measures as a true “regime change”, because they affect the system and the electoral body, such as the elimination of deputies through multi-member channels, that is, without holding elections. There are those who consider that multi-member elections allow people from the civil sphere to be introduced into the Chambers, which provides a certain plurality, but other more controversial profiles also enter who want to guarantee a seat without submitting to the vote.

These announced changes have supported the opposition’s narrative during the campaign that Mexican democracy was at risk, that authoritarianism was coming, something that the June 2 elections have not confirmed, leaving Morena with a shower of votes, carte blanche to complete your reforms. And the president relies on that, knowing, furthermore, that part of that overwhelming victory is due to the charisma that he still maintains among the population. “Justice is above the markets,” he said this past Friday, denying that economic or financial instability could be an obstacle for him. “People want that, they want changes, Mexico’s economy is strong, you should not choose between law and justice or between progress and slavery,” he said. Those who are protesting are for the president “promoters of nervousness.” But he stated that everything will be done “in an orderly manner, without authoritarianism, calling on everyone to talk about the issue.” He only has the month of September left to legislate once Congress is formed.

At Claudia Sheinbaum’s transfer of power headquarters they are trying hard to send a message of calm, that the “steamroller” will not be used despite the power of votes in the legislature, with a qualified majority of deputies and two senators also having it in mind. the upper house. Possibly on Monday, when the electoral court officially validates Sheinbaum’s victory, the president will meet with her and after that meeting some differences between the political projects of the two may be ironed out. The candidate presented a more contemporaneous outline of judicial reform in the campaign, which differed to some extent from that proposed by the president, but all the details are yet to be outlined. López Obrador assured the day after the elections that he would try to “not bother” the elected president. The continuity with the policies of this six-year term that Sheinbaum has promised during the electoral campaign predicted complete support for the projects of her predecessor, something that many reproached her for, but which the electorate finally approved without room for doubt.

Mexico is a country with still very notable basic deficiencies, such as healthy eating or a good health system, as well as the lack of running water in many territories. A total of 36 million people live in poverty or extreme poverty, which is why many analysts have considered that these have been the priorities when casting their vote, without caring much about the changes in the judicial power, in autonomous organizations, which They are very unknown to a large part of the population, or the same violence that devastates the country. Eating comes first. And the anti-poverty measures have been some of the most applauded by Mexicans, who have seen their minimum wage significantly increased or received billions in social aid.

A key figure in the transfer of powers is Juan Ramón de la Fuente, who will lead this process. He is a moderate man who had been Mexico’s representative to the UN before Sheinbaum called him to his campaign team. A doctor, writer, diplomat and former rector of the great Mexican university, UNAM, De la Fuente has a reputation as a good negotiator and moderate person, which is also a sign of a dialogic mood at this time.

The fights between the current Administration and the next one, glimpsed rather than explicit, also present the other side: López Obrador and Sheinbaum become public affections. “Although I think the same as you about power being humility, the truth is, I am very proud. You are the best thing that has happened to the country in these times. There is no doubt that Mexico and its people are blessed,” the president wrote to her successor to congratulate her. The message was made public in his morning conference and Sheinbaum acknowledged that his “eyes filled with tears at the recognition” of a man whom he has always admired “as a great leader and a great president,” he said. . Both will tour various parts of the country visiting ongoing government projects and will meet soon.

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