This year will be anything but dull for Mexico and specially for Mexican politics. As the country goes into the fourth year of the López Obrador Administration, we can expect an all-in attitude by the President, his party and government to consolidate their self-described Fourth Transformation of Mexico. However, it will also be harder for Mr. López Obrador -who has proven to be a masterful communicator no doubt- to pin the lack of results on the past. A sluggish economy, high insecurity and an anti-corruption strategy that seems to be more focused on narrative than action are likely to take a toll, if not on the President’s approval —which remains high at around 60 percent— perhaps on his capacity to continue to push forward his agenda. This year can prove to be more consequential for Mexico than 2018, when Andrés Manuel López Obrador (AMLO) won the election and stirred the hopes of millions of Mexicans. Predictions are a risky business –even more so in the political arena. Hence, here are five things that are simply worth paying attention to during the upcoming year.
•Post-Covid economic performance. Even by the government’s own estimates, economic growth during the AMLO’s six-year term will be well below two percent per year on average and might even end up flat. The government cannot be blamed for Covid-19’s huge impact. Nevertheless, the economy —and specially investment—- were already shrinking before the pandemic started. Last year, after an initial post-Covid rebound, the Mexican economy lost all momentum. This happened despite vigorous growth of the U.S. economy. For example, physical investment figures for September 2021 (reported in December) were already in the negative with a decline of 1.6 percent compared to the previous month. During 2022, people are likely to expect much more from the President and his party in terms of economic performance. A slow economy not only spells trouble politically for the incumbent, but it also implies two additional risks. First, it will further stress public finances and thus the government’s social programs which are an important part of President AMLO’s economic and political strategy. Second, it will put additional pressure on Mexico’s sovereign credit rating. To his credit, Mr. López Obrador has thus far been careful with public finances, yet his maneuvering margin has become much smaller and will continue to do so unless taxes are raised.
•Internal dynamics within MORENA. President López Obrador is the undisputed leader of his party (MORENA) and has been able to exert almost absolute discipline. Yet, cracks within MORENA are becoming increasingly visible. As internal competition for the 2024 presidential election tightens, it will be harder to maintain party discipline. The President will undoubtedly have a critical if not defining role on who will be MORENA’s presidential candidate for the presidential election. The perceived frontrunners include Foreign Secretary (Marcelo Ebrard), the Mayor of Mexico City (Claudia Sheinbaum) and the Senate’s Majority Leader (Ricardo Monreal). We can expect they will continue to exhibit loyalty to the president AMLO and his party, while at the same them becoming more politically active. As of today, polls show that the 2024 presidential election is MORENA’s to lose. However, most analysts also concur that divisions among competing factions and eventually a fracture within the party are the number one obstacle to retain Mexico’s Presidency.
•Presidential referendum. This coming April, and for the first time in history, there will be a referendum on the Mexican President’s mandate. Oddly, public debate about the cost for the whole thing, and whether it is really worth it -especially considering the President AMLO’s popularity- is stronger than the debate about the president’s actual performance. AMLO and his supporters defend the novel exercise as emblematic of Mexico’s new popular democracy. His critics argue that the referendum is a waste of taxpayers’ money and a way for the President to campaign for his party given he cannot run for reelection. Nobody seriously expect Mr. López Obrador will be voted out of office. The referendum, however, will likely polarize the country further and, more importantly, it will probe to be another important test for Mexico’s independent National Electoral Institute (INE), which has been the target of strong criticism and attacks by the President and his party.
•Constitutional reforms. Time is rapidly becoming AMLO’s mightiest adversary, especially as he seeks to consolidate his legacy. Accordingly, he intends to secure three more constitutional reforms before his tenure as Mexico’s President ends. The first one, already under consideration in Congress, would basically reinstate a government monopoly in the power sector. Another would formally place the newly created National Guard under the Mexican Army. Finally, an additional reform would involve a major overhaul of the National Electoral Institute (INE). It is expected that the President will use these to campaign hard both as part of the presidential referendum and June’s election, when six state governorships will be disputed, in addition to other local positions in different Mexican states. Some people even suggest that the reforms real intent is only to maintain a narrative for electoral purposes, given that MORENA does not hold sufficient votes in Congress to pass constitutional reforms. I believe the President is serious about trying to get these reforms through and that, if approved, they would in fact consolidate his vision of Mexico.
•Cohesiveness of the opposition block. Since last year’s midterm election, the three main Mexican opposition parties, PAN, PRI and PRD, albeit their sharp differences, have managed to maintain an opposition block which is crucial to keep MORENA short of the needed supermajority to reform the Constitution. Last December, the oppositoin block announced that it will again compete together in four out of the six state governor races this year. This reflects –at least to some extent—that the opposition block could remain cohesive during 2022. However, it can be expected that President AMLO and his party will try to cajole and/or pressure to break the opposition parties’ alliance.
* Gerónimo Gutiérrez Fernández is senior advisor at Covington and Burling, LLP and partner at BEEL Infrastructure. Twitter: @GERONIMO_GF
