Mexico

Claudia Sheinbaum: Mexico's first female president between continuity and change

Claudia Sheinbaum is the newly elected president of Mexico and will take office on October 1. As the country’s first female president, she will witness a smooth transition of power – a rarity in Mexican history. Moreover, her party, Morena, now governs 24 of Mexico's 32 states and holds significant majorities at the national level, including the ability to amend the constitution. This grants her and her party substantial scope for shaping the country's future.

On the other hand, Claudia Sheinbaum Pardo has thus far operated under the political protection of Andrés Manuel López Obrador (AMLO), her popular (and populist) predecessor. It was AMLO who invited her to join the government of Mexico City, and it was under the banner of Morena that she became mayor of Tlalpan (the largest borough of Mexico City) and then head of government for Mexico City. AMLO also was the one who positioned her as his successor. How much influence he will continue to wield over her and her policies after the transition, how she will leverage her party’s overwhelming majorities – if she can keep them unified – and what her political priorities will be remain difficult to predict.

Preserving López Obrador's Legacy

Sheinbaum has repeatedly stated that it is her duty to "build the second floor of the Fourth Transformation," which would mean a steadfast continuation of AMLO’s agenda. His priorities included expanding clientelist social programs, dismantling autonomous institutions to concentrate more power in the presidency, and strengthening the role of heavily deficit-ridden state-owned enterprises in the energy sector, especially in oil and gas. In his (un)modest view, AMLO regarded this as the "fourth transformation" of the country, following the independence in 1821, the Reform era of Benito Juárez from 1852 to 1872, and the Mexican Revolution of 1911.

Thus far, Morena has been a one-man party, revolving around López Obrador. It has yet to fully evolve into a true institution.  composed of various groups with diverse interests and ideologies. López Obrador was the glue holding this movement together, and now that his presidency is ending, it remains to be seen whether and how he will continue to exert influence and whether the party can remain unified through this leadership transition.

Furthermore, at least half of Sheinbaum’s new cabinet consists of members from López Obrador’s cabinet. However, her team generally has a more technical profile, whereas AMLO favored political figures. This might indicate a subtle shift in approach. The real surprise, though, was the appointment of the president’s son, Andrés Manuel López Beltrán, as Secretary of Organization for Morena, a key position in electoral campaigns. This suggests that AMLO does not intend to relinquish his influence.

López Obrador’s influence extends beyond recommendations for key cabinet and party positions. He has also pushed through constitutional reforms, most recently the highly controversial judicial reform, which mandates that federal judges be elected by popular vote, severely threatening the democratic separation of powers in Mexico and causing alarm internationally among political and business circles. He achieved this because the newly elected parliament, with its constitutional-amendment majority, convened in September, one month before the transfer of power to his successor. He also ensured that the National Guard, originally intended as a replacement for the old federal police, would be placed under military control.

Will Sheinbaum Find Her Own Path? And If So, Which One Will It Be?

There are also significant differences between Sheinbaum and her predecessor. While López Obrador was a president who viewed everything through a political lens, Sheinbaum seems to follow her roots as a climate scientist, taking a more substantive and scientific approach.

Although she publicly adhered to López Obrador’s rhetoric, Sheinbaum pursued her own security strategy as head of government for Mexico City, one that was more data-driven and focused on training civilian security forces. It remains to be seen whether she and Omar García Harfuch, who served as Secretary of Security for Mexico City under Sheinbaum and is now responsible for the same role in the federal cabinet, can implement a similar model at the national level. Security is one of the most pressing issues in Mexico – AMLO’s term ended with the highest murder rate in the country’s modern history (around 180,000 homicides) – so expectations and the urgency for action are particularly high.

Another key issue is the much-needed energy transition. Although Sheinbaum has stated her intention to strengthen Pemex, the national oil company, she has also spoken of renewing support for renewable energies, a sector AMLO largely neglected throughout his presidency in favor of bolstering the state oil company.

In terms of style, Sheinbaum has shown herself to be more conciliatory and cooperative. An example of this is the highly controversial judicial reform, where rumors suggest that Sheinbaum made assurances to bankers and other sectors that secondary legislation would address and mitigate many of the investors' concerns about the reform.

In her previous positions, Sheinbaum has proven to be a capable and skilled politician. Becoming Mexico’s first female president with the strongest electoral result in the country’s democratic period is – prominent predecessor support notwithstanding – a remarkable achievement. It is now up to her to distinguish herself from AMLO and to chart her own path, set her own policies, and define her own priorities.

Is Mexico Heading Toward an Authoritarian Regime?

During AMLO’s presidency, Mexico experienced an erosion of its democratic institutions, which, according to the Democracy Index of the Economist Intelligence Unit, has transformed the country into a hybrid regime.

In addition to the aforementioned judicial reform, there was also an electoral reform planned that would require the popular election of the members of the National Electoral Institute (INE), which is responsible for overseeing elections. However, according to some sources, Sheinbaum has shelved this reform in congressional committees.

Another proposal inherited from AMLO is the abolition of seven autonomous institutions: the National Institute for Transparency, Access to Information, and Data Protection (INAI), the National Council for the Evaluation of Social Policy (Coneval), the Federal Economic Competition Commission (Cofece), the Federal Telecommunications Institute (IFT), the National Commission for the Continuous Improvement of Education (MEJORADU), the Energy Regulatory Commission (CRE), and the National Hydrocarbons Commission (CNH). Their functions are to be transferred to federal agencies or the National Institute of Statistics and Geography (INEGI). While the abolition of these autonomous institutions was framed as a cost-saving measure that would not result in significant losses to essential state functions, in reality, it represents a massive expansion of executive power and a dramatic reversal of the country's process of professional institutionalization, effectively dismantling the rule-of-law reforms.

Little resistance is expected from the opposition, which has been largely aimless and discredited since 2018. The more significant development will likely come from within Morena itself. Morena is not a traditional party but a coalition of various political factions, which could begin to fracture once the unifying force of López Obrador’s leadership disappears.

Economic Outlook

Mexico’s short-term economic prospects are not particularly promising. The Organisation for Economic Cooperation and Development (OECD) estimates growth of 1.4% in 2024 and 1.2% in 2025. Sheinbaum hopes to reinvigorate Mexico's economy through foreign investment, particularly from companies seeking alternatives to China. Foreign direct investment (FDI) increased by 310% between January and September 2022. However, in 2023, FDIs dropped by 5%.

To attract foreign investment, Mexico will need to offer more than just cheap labor. It must also ensure good working conditions and reliable access to water and electricity. Public security is another important factor. According to a study by the Mexican Institute for Competitiveness, Mexico performs poorly in these areas, and the German-Mexican Chamber of Commerce (CAMEXA) reported in a survey that, alongside exchange rate fluctuations, security concerns can be a significant deterrent for companies.

Mexico is also an important location for German businesses: 2,100 companies with German capital are registered with Mexico's Ministry of Economy, employing approximately 300,000 people. Mexico is the most important investment destination for German companies in Latin America, with investments totaling 45 billion USD since 1999. The key sectors for German businesses include the automotive industry, pharmaceuticals, chemicals, electronics, machinery, and logistics, and German-Mexican trade volume amounted to 29 billion Euro in 2023.

Currently, Mexico has 12 free trade agreements with 46 countries and more than 30 investment promotion agreements. One of the most important is the United States-Mexico-Canada Agreement (USMCA), signed on November 30, 2018, which replaced the old NAFTA agreement and is set for review in July 2026. The abolition of autonomous market regulation institutions has raised concerns among investors, as this could be seen as a violation of the USMCA, potentially leading to annual reviews of the agreement until it expires in 2035 (the so-called "sunset clause"). This risk is especially high if Donald Trump returns as President of the United States.

AMLO leaves behind a record-high budget deficit due to extensive social spending and increased foreign debt. The problematic judicial reform also raises the risk of a further downgrade in the country’s credit rating. President Sheinbaum will face significant challenges in finding the funds to continue the generous social programs she has promised.

Foreign Policy

In recent years, Mexico has taken a very reserved stance in international discourse, remaining relatively quiet on many conflicts. This applies to wars in Ukraine and the Middle East, as well as conflicts in Latin America. Mexico, the world’s largest Spanish-speaking country, has not taken a clear position on Venezuela and has refrained from condemning the undemocratic power retention of the Maduro regime.

Sheinbaum, who has Jewish roots, has also been quite reserved on international issues so far. Whether this stance will remain viable in an increasingly tense global situation remains to be seen. Mexico has the potential to be a significant partner for Europe—economically, in the fight against climate change, and particularly in the global competition of systems. Whether President Sheinbaum will be more open to democratic and economic partnerships is an intriguing question.

Conclusions

Claudia Sheinbaum, Mexico’s first female president, faces high expectations and equally significant challenges. On one hand, she inherits López Obrador’s legacy and the responsibility to continue his policies. However, she is also expected to correct the damaging aspects of those policies. AMLO’s charisma has granted him consistently high popularity, which shielded him from criticism despite the underwhelming results of his economic and security policies. Claudia Sheinbaum is likely to face more scrutiny.

She also faces the difficult task of consolidating Morena as a cohesive party and establishing a stable power base. Her ability to balance the internal factions within the party will be crucial for ensuring political stability in the country. Her focus on science, the creation of new ministries, and a data-driven security strategy point to a different governing style. However, some of her proposals, such as the abolition of proportional representation and interference in the judiciary, raise concerns about the future of Mexico’s democratic quality, particularly regarding the system of checks and balances.

Her government follows a term marked by charismatic and polarizing populist politics. Sheinbaum's administration will be characterized by the tension between continuity and change, with the necessity to demonstrate political independence and management skills to tackle the complex challenges Mexico faces.