It’s time for women,” Claudia Sheinbaum told jubilant crowds at her presidential inauguration in October. “Women have arrived to shape the destiny of our beautiful nation,” she said to thunderous applause. The event marked a historic occasion for Mexico, as the nation’s presidential sash was presented to a woman for the very first time.
After winning a landslide victory in June’s elections, President Sheinbaum has taken office on a wave of public support. An environmental scientist and the former mayor of Mexico City, the newly elected president is something of a trailblazer in Mexican politics. As the first female leader and first Jewish President in over 200 years of Mexican independence, Sheinbaum’s election has already made history. But as she embarks on a six-year presidential term, the world will be waiting to see if she will forge a new political path for Mexico.
Sheinbaum has made it clear that she prioritises the clean energy transition in Mexico
Sheinbaum inherits a highly troubled nation from her predecessor and mentor, Andrés Manuel López Obrador. Mexico is gripped by gang violence, with over 175,000 people murdered and a further 43,000 missing over the last six years. López Obrador – known colloquially as AMLO – pursued a controversial ‘hugs, not bullets’ policy during his time as president, which ultimately proved ineffective in curtailing the nation’s violent drug cartels. After an election campaign marred by violence, confronting Mexico’s dire security situation will be a priority for Sheinbaum. And, along with escalating cartel violence, López Obrador has also passed a shaky economy on to his protégé.
The country’s budget deficit stands at close to six percent of GDP – the highest it has reached since the 1980s. Last year, foreign investment in Mexico fell to an 11-year low, with jitters over security affecting investor confidence. Productivity remains stagnant, and the large informal economy continues to limit the government’s tax base. Amid this challenging fiscal landscape, Sheinbaum may struggle to implement the ambitious social policies that she so successfully campaigned on.
A lasting legacy
While Claudia Sheinbaum’s election came as no great surprise, nobody had expected her victory to be quite so decisive. The climate scientist was elected with nearly 60 percent of the vote – the highest vote percentage in the country’s democratic history. Her party, Morena, now governs 24 of Mexico’s 32 states, and also boasts a large legislative majority. This gives Sheinbaum near-unprecedented power to shape the nation’s future – but the burning question is whether she will break from her predecessor’s policies.
AMLO’s legacy looms large in Mexico. The left-wing politician rose to power in 2018, promising a ‘Fourth Transformation’ for the nation, on par with the war of independence, the Reform War and the Mexican Revolution. As part of this radical transformation, López Obrador pledged to end corruption, reduce violence, grow the Mexican economy and expand social programmes designed to reduce poverty and inequality. By the end of his six-year term, AMLO may have fallen short on a number of his lofty ambitions, but his administration achieved inarguable progress in poverty reduction.
Between 2018 and 2022, more than five million Mexicans were lifted out of poverty, driven largely by significant increases to the minimum wage and direct cash transfers to low-income families. Social spending increased across AMLO’s presidency, with a focus on pension benefits, educational scholarships and financial assistance for vulnerable groups. Many Mexicans have felt the benefit of this expanded social safety net, helping AMLO’s approval ratings to remain consistently high throughout his administration.
A charismatic and well-liked leader, López Obrador was able to forge a bond with many ordinary Mexicans during his time as president. His personalised approach to politics endeared him to his electorate, with millions tuning in to his sprawling daily press conferences each morning. These lengthy news briefings, known as the mañaneras, allowed the former president to speak directly to his citizens, highlighting his government’s key achievements and verbally sparring with members of the press.
Often lasting for up to three hours, the mañaneras became a defining feature of AMLO’s presidency, and reshaped how many Mexicans interact with the news. Even more significantly, the briefings showcased the former leader’s ability to influence the national conversation, using his communication skills and charisma to his advantage.
Despite his failures to tackle corruption and curtail cartel violence, AMLO left office with an approval rating of almost 60 percent, and a legion of loyal supporters. He has insisted that he will retire from political life, and relocate to his family ranch in the southern state of Chiapas. But even if AMLO embraces a peaceful retirement, his legacy will have a lasting impact on Mexican politics. His political protégé Sheinbaum will soon need to decide if she wishes to continue in AMLO’s footsteps, or forge her own path.
Pioneer or ‘puppet’?
On paper, Sheinbaum and her mentor are cut from a rather different cloth. Ideologically, both are left-leaning, and committed to socio-economic justice. But the pair have differing political backgrounds and public personas. A lifelong politician, López Obrador has secured enduring popularity based as much on personality as on policy. The former president also prioritised fossil fuel production during his six-year term, propping up indebted state-owned oil firm Pemex in an effort to achieve a self-sufficient energy supply. In his frequent interactions with the press, AMLO embraced populist rhetoric, attacking the nation’s corrupt ‘elites’ while defending the working class.
Home to over 130 million people, and boasting strong trade ties to the US, Mexico has vast economic potential
Sheinbaum, by contrast, may set a different tone in her presidency. She brings a formal scientific background to Mexico’s top job, and outlined a modern, progressive outlook in her inaugural speech as president. Her career as a climate scientist, meanwhile, sets Sheinbaum at odds with AMLO’s fossil fuel-focused strategy. Although she didn’t campaign on an explicit climate platform, Sheinbaum has made it clear that she prioritises the clean energy transition in Mexico. With her technical background and her reputation for hard work and efficiency, Sheinbaum may adopt a more pragmatic approach to politics than her predecessor.
Sheinbaum now has a tricky line to tread. She has promised some departures from the previous administration, particularly when it comes to energy and the government’s relationship with the private sector. But she has also committed to continuing the model of ‘Mexican Humanism’ set out by her mentor. Sheinbaum’s campaign slogan promised ‘continuity with change,’ but any radical reforms may prove difficult when AMLO casts such a large shadow.
And it is not just AMLO’s lasting legacy that Sheinbaum has to contend with. Before leaving office, López Obrador announced a series of constitutional reforms, which could radically reshape the Mexican judicial system in the years to come. The controversial proposals include introducing direct elections for state, federal and Supreme Court judges, as well as cuts to the overall number of lawmakers. Experts have warned that, if implemented, the proposals could weaken judicial independence and the wider division of powers in Mexico. Sheinbaum has shown no opposition to the proposals brought forward by her predecessor, and the judicial reform received approval in the lower house of Congress in September. The reform will move to the Senate for further debate, where it is expected to pass due to the ruling party’s strong majority. According to human rights advocates, the move marks a concerning erosion of democracy, by all but guaranteeing Morena political control of the judiciary.
Sheinbaum’s support for these controversial proposals suggests that she will remain loyal to AMLO’s political agenda. Critics have cast her as a mere ‘puppet’ of López Obrador, while international markets have baulked at the reforms. The Mexican peso has tumbled against the dollar following the judicial system upheaval, and bond market volatility has increased. The US ambassador to Mexico, Ken Salazar, has been openly critical of the proposed reforms, warning that the direct election of judges constitutes “a major risk to the functioning of Mexico’s democracy.”
As the peso continues to fall against the dollar, Sheinbaum may need to reconsider her public position on these reforms if she is to reassure investors and analysts of her commitment to democratic values.
Balancing the books
Along with grappling with AMLO’s political legacy, Sheinbaum will also need to get to grips with the shaky economy she has inherited. Home to over 130 million people, and boasting strong trade ties to the US, Mexico has vast economic potential. Historically speaking, however, the nation has struggled to tap into these prospects, and has underperformed compared to similar developing nations. This pattern of slow growth and missed opportunities continued under López Obrador, whose business-bashing rhetoric hampered private sector investment in a number of key sectors. What’s more, AMLO’s spending on social programmes has put considerable strain on the government purse strings. The budget deficit now stands at six percent of GDP – the highest rate in three decades. Simply put, the government does not collect enough tax revenues to fund its current level of social investment. Mexico’s large informal economy continues to impact its tax base, with tax revenues amounting to just 17 percent of the nation’s GDP – far below the OECD average of 34 percent of GDP. Almost 60 percent of Mexico’s workforce operates off the books, and tax compliance is minimal at best. Sheinbaum has promised to continue the ambitious social policies of her mentor, but will struggle to finance these legacy programmes without increasing tax collections.
Last year, Mexico officially displaced China to become the US’s top trading partner
Most significantly, she will need to find crucial funds to support health services, which were dramatically underfunded during AMLO’s term. In 2020, the López Obrador administration closed its flagship health insurance programme, Seguro Popular, which had provided medical cover to millions of Mexican citizens. As a result, the number of Mexicans without access to health services more than doubled by 2022 to over 50 million people. Reversing this trend and expanding access to healthcare should be an early priority for the socially conscious Sheinbaum. Indeed, in her first speech as president, Sheinbaum insisted that “health and education are rights of the Mexican people, not privileges.” Sheinbaum’s pledges to increase social spending will have to be financed somehow. But maintaining fiscal responsibility without reforming tax may prove a difficult line to tread.
A creaking giant
Aside from tackling the budget deficit, one of President Sheinbaum’s most pressing economic concerns is the fate of the beleaguered state-owned oil firm Pemex. With debts of over $100bn, Pemex is the world’s most indebted oil company, and has largely relied on government bail-outs to stay afloat. The firm was once a major money-maker for Mexico, providing half of the country’s entire revenue in its heyday. But years of falling crude production, corruption scandals and workforce bloat have left the company drowning in debt. Amid these dire circumstances, López Obrador decided to throw Pemex a lifeline.
In an effort to revive the debt-laden firm, López Obrador slashed its debt burden and channelled government funding into the construction of a new oil refinery in the state of Tabasco. AMLO’s tax cuts and cash injections are thought to have pumped over $70m into the state-owned firm over the course of the last six years, constituting a major burden on state finances. This ambitious rescue package was ultimately in service of AMLO’s lofty goal to make Mexico self-sufficient in fuel production. By recommitting to fossil fuels and providing near-unlimited support to an ailing Pemex, López Obrador effectively slammed the brakes on renewable energy growth.
Unlike her predecessor, President Sheinbaum has shown explicit support for the clean energy transition. During the election campaign, the former climate scientist promised to invest $14bn in renewables, and is seemingly open to working with the private sector to enable the green energy transition. Here again, however, AMLO’s shadow looms large. Her ties to her predecessor have seen Sheinbaum publicly defend the construction of the Dos Bocas refinery, and set a target for Pemex to ramp up its oil production. These decisions may seem in conflict with Sheinbaum’s climate-conscious background, but the new president’s hands are largely tied when it comes to the indebted oil firm. Increasing production and sales at Pemex will reduce the firm’s reliance on state support, but is squarely at odds with a transition to clean energy. And with Pemex’s fortunes so deeply entwined with those of Mexico itself, Sheinbaum simply cannot afford any costly missteps when tackling the firm’s pressing debt burden.
Neighbourly relations
It is not all doom and gloom for the incoming president. There are some bright spots in the Mexican economy – particularly when it comes to the nation’s relationship with its northern neighbour. Last year, Mexico officially displaced China to become the US’s top trading partner, with $798bn of goods passing between the two nations.
Indeed, Mexico is uniquely placed to benefit from escalating US-China tensions, and Sheinbaum would be wise to harness this opportunity while it lasts. Economic relations between the US and China have severely deteriorated under the Trump and Biden administrations, with Chinese exports to the US falling by 21 percent since July 2018. With tariffs on Chinese imports likely to continue under the new US administration, Mexico’s exports boom shows no signs of slowing down.
The nation also stands to gain from the phenomenon of ‘nearshoring.’ The business practice – which sees firms relocate their factories in order to bypass costly tariffs – has become increasingly commonplace in the post-pandemic environment. Given its proximity to the US, Mexico is a prime location for companies looking to nearshore their production lines. In fact, new investments driven by nearshoring could see Mexico add an additional three percent to its GDP over the next five years.
Recent announcements by major industry players have bolstered confidence in the nation’s ability to attract investment. Amazon Web Services has announced that it will invest $5bn to open new data centres in Mexico over the next 15 years, while car-making giant Volkswagen is set to inject a further $1bn into its sprawling Puebla plant. In total, the nation received $36bn in foreign direct investment in 2023 – a boon for the economy, certainly, but perhaps falling short of its full potential.
AMLO’s anti-business rhetoric and underinvestment in water and electricity infrastructure have diminished Mexico’s attractiveness to multi-nationals. Blackouts and water shortages are a major concern for investors looking to establish manufacturing bases in the country, while security threats from organised crime have long impacted Mexico’s competitiveness on the international stage. The US remains the largest investor in Mexico by some margin – spending $13.8bn south of the border in 2023 – but the Latin American nation will need to tackle some deep-set issues if it is to maximise investment from its neighbour.
Unlike her predecessor, President Sheinbaum has shown a willingness to work with the private sector, and a desire to improve investor confidence in Mexico. But her ability to strengthen the bilateral relationship with the US will be largely determined by the behaviour of the unpredictable Donald Trump as he settles into his second term. What’s more, with the US-Mexico-Canada Agreement (USMCA) free trade deal up for renegotiation in 2026, Trump’s return could radically reshape the economic relationship between the two neighbouring countries.
The cartel question
In 2024, one prevailing issue continues to hold Mexico back from achieving its full potential: extreme criminal violence. The country has just experienced the most deadly election campaign in its history, with a number of high-profile assassinations taking place in the lead-up to voting day. According to political consultancy firm Integralia, approximately 200 politicians, candidates and public servants were murdered or threatened ahead of June’s elections, and three further assassinations took place in the days following the vote.
This latest wave of political violence adds to the country’s worsening security crisis. President Sheinbaum has inherited a nation marred by gang warfare and violent criminality. AMLO’s ‘hugs, not bullets’ approach failed to clamp down on cartel violence, with his administration presiding over the bloodiest six-year term in the nation’s modern history. Since 2018, over 30,000 people have lost their lives each year to crime-related violence, while kidnappings and disappearances remain rife. So far, Sheinbaum has largely stuck to AMLO’s political roadmap. But his hands-off security approach has proved ineffective in tackling escalating cartel violence. For the safety and security of her own citizens – and for the sake of her country’s reputation on the world stage – Sheinbaum may need to forge her own path on this issue. She has a track record of combating crime, with the homicide rate plunging by 50 percent during her tenure as mayor of Mexico City.
President Sheinbaum must prioritise a security strategy that bolsters investor confidence and civilian safety
Sheinbaum achieved this impressive result with a combination of targeted strategies, from intelligence sharing with US law enforcement agencies, to boosting police surveillance powers in high-crime areas. There are early signs that she may continue this multifaceted approach to crime reduction in her new role as president. Shortly after taking office, Sheinbaum unveiled a new security strategy, which promises to boost collaboration between law enforcement units, along with creating an enhanced national intelligence agency. This fresh approach to security policy simply cannot come soon enough – a survey published by the national statistics agency shows that over 60 percent of Mexicans consider public safety to be the gravest issue affecting the nation.
For years, Mexico’s struggle with violent crime has harmed its citizens, dampened its economy and deterred investors. With the nation poised to benefit from a once-in-a-generation nearshoring opportunity, President Sheinbaum must prioritise a security strategy that bolsters investor confidence and civilian safety. This window of opportunity will not last forever, and the nation’s new president will need to act swiftly and decisively to unlock the country’s full potential.
If Sheinbaum can seize the initiative and step out from her mentor’s shadow, she may be able to steer Mexico towards a bold new future.
