By Jorge G. Castañeda
MEXICO CITY – Mexico’s elections delivered numerous surprises but few certainties. Claudia Sheinbaum, a protégé of outgoing President Andrés Manuel López Obrador (known as AMLO), won in a landslide, defeating her closest opponent by more than 30 percentage points and becoming the country’s first female president-elect. Her party, Morena, won seven of the nine contested state governorships, as well as Mexico City’s mayoral election. Even more significantly, the party nearly achieved a two-thirds supermajority in both houses of Congress.
While the election’s outcome reflects the popularity of AMLO and some of his economic policies, it also raises significant concerns about the future of Mexico’s young and fragile democracy.
Sheinbaum’s resounding victory can be partly attributed to the increase in disposable income among most of Mexico’s working population, both in the formal and informal sectors. Over the past five years, the real minimum wage has doubled, while the average wage in the formal economy has increased by roughly 10% in real terms.
Social-welfare programs targeting the elderly, disabled individuals, indigenous communities, high-school students, unemployed young people, and farmers in southeastern Mexico have also played a crucial role in boosting disposable incomes. AMLO heavily promoted these handouts, which are expected to benefit 28 million Mexicans this year, frequently emphasizing that he personally oversaw their delivery.
To be sure, essential public services such as health care, education, law enforcement, and housing all deteriorated during AMLO’s term, but voters appeared indifferent. These services had always been inadequate, and Mexico’s traditional ethos of individualism and skepticism led their supposed beneficiaries to believe that cash handouts were more valuable than politicians’ perpetually unfulfilled promises of improving health care and schools.
Mexico’s economic history can help explain how AMLO managed to do this without triggering price increases, causing widespread bankruptcies, or running huge budget deficits. Since the mid-1980s, Mexican governments have relied on low wages as their primary anti-inflation tool. While this strategy has been effective in controlling inflation, it has also kept incomes at abysmally low levels. Consequently, even minor improvements, such as an average monthly stipend of $80 for the elderly, could have a significant impact on people’s well-being without posing major macroeconomic challenges. AMLO may have figured this out intuitively, but he was undoubtedly right.
Sheinbaum’s landslide victory means that her government will have much greater freedom to pursue its legislative agenda. But while the new Congress will convene on September 1, AMLO remains in office until the end of that month. This “September window” has made investors nervous, causing the peso to weaken and the Mexican stock market to fall.
For example, AMLO could use the September window to introduce his proposed judicial and electoral reforms in the House and Senate. These far-reaching reforms aim to overhaul vital institutions and independent government agencies, including those overseeing competition policy and transparency. If enacted, Supreme Court justices would be elected by popular vote and the House’s proportional-representation system would be eliminated, reducing the number of members from 500 to 300. Given the outcome of the latest elections, this could result in the winning party gaining a legislative supermajority with well under one-half the popular vote.
Whether approved under AMLO or Sheinbaum, these reforms would effectively eliminate most of the remaining checks and balances painstakingly built over the past 25 years. At the heart of Morena’s plan to consolidate power is the notion of majority rule. According to AMLO, if a majority of Mexican voters support his party, agenda, and designated successor, then the preferences of that majority should be reflected in Congress, the judiciary, the entire state apparatus, the media, and even the central bank. This approach is entirely at odds with the separation of powers, a fundamental principle underpinning liberal democracies around the world.
But if there is one country in Latin America that needs checks and balances, both domestic and international, it is Mexico. The country’s first genuinely free and fair election took place in 2000, and it is still grappling with violence, corruption, and crony capitalism. Centralizing power in the hands of a single individual or branch of government is precisely what Mexico must avoid, given its tumultuous history.
Despite Sheinbaum’s decisive victory, many uncertainties remain. Morena might not secure enough seats to amend the constitution, and Sheinbaum may choose not to push through her predecessor’s judicial and electoral reforms, especially if they trigger a public backlash. Moreover, the proposed changes may not be compatible with international treaties Mexico has ratified.
Nevertheless, it is hard not to be pessimistic, given that Mexican voters have decided to empower a party and a leader whose legislative agenda could undermine democratic institutions and lead to unpredictable consequences. This scenario has played out before, in Mexico and other countries, and it rarely ends well.
Copyright: Project Syndicate, 2024.