Morena and the dangers of absolute power in Mexico

That Claudia Sheinbaum was able to sweep into the presidency with a 30 percentage-point victory over her main rival speaks to the political juggernaut that is the Morena ruling party.

Unspectacular and uncharismatic compared with her mentor, President Andrés Manuel López Obrador (AMLO), the climate scientist and former Mexico City mayor nevertheless won with nearly 59% of votes, besting the 53% obtained by AMLO in 2018. Sheinbaum, who will start her six-year term on October 1, has vowed to continue the agenda of Morena's nationalist movement, which is not seen as business-friendly.

While AMLO could not run for a second term, as Mexico's constitution does not allow reelection, the president clearly made the June 2 general elections a priority for his administration to fulfill his so-called Plan C – not only to keep the presidency in the hands of Morena, but also to secure two-thirds majorities in both chambers of congress in order to pass the constitutional reforms that would secure his legacy. A day after the election, with votes still being counted, Morena seemed to be closing in on that target.

In an election marred by the growing influence of organized crime, which killed over two dozen candidates running for local municipalities, opposition coalition candidate Xóchitl Gálvez also decried "the full State apparatus dedicated to favoring their candidate."

Morena's sweeping victory raised concerns among investors, who fear a weakened Mexican democracy due to the party's potential power to pass constitutional reforms. The peso lost over 4% against the dollar on Monday, reaching its lowest level since November.

The package of constitutional reforms presented by AMLO on February 5 was seen as a political maneuver intended to make it more difficult for a future president to reverse his so-called Fourth Transformation of Mexico, while also boosting Sheinbaum’s campaign. It also sought to bolster social programs, weaken autonomous agencies and pass laws, decrees and reforms that were nullified by the supreme court.

“There is serious concern about the content and impact that these reforms may have on the private sector,” constitutional expert Mariano Calderón, a partner at law firm Santamarina & Steta, told BNamericas at the time.

One reform seeks to constitutionally establish that power utility CFE is a strategic public company and not a state productive enterprise, as defined in the 2013 energy reform. Another seeks to “ban genetically modified corn and the extraction of hydrocarbons through fracking in national territory” and outlaw concessions for open pit mining. 

The reform proposals – and their potential to create a more challenging legal environment for the private sector – come at a time when the country has the opportunity to attract investments from companies seeking to bring supply chains closer to consumers in the United States. But the nearshoring potential is limited by insufficient water and electric power supplies.

In early May, Mexico experienced a heatwave that considerably increased electricity demand throughout the country, leading to blackouts in 21 of 32 states on May 7. The country’s reliance on US natural gas to meet energy needs will continue to represent a short-term risk in the event of extreme climate events, Moody’s Ratings warned.

Meanwhile, Mexico City’s metropolitan area could run out of water by the end of the month, as the reserves of the Cutzamala system – a series of reservoirs, water treatment plants, canals and tunnels that supply a quarter of the water consumed in the metropolitan area – are drying up amid a drought.  

The question now is whether Sheinbaum – a physicist of Jewish descent, with a PhD in energy engineering – can find her own voice and come out of the shadow of AMLO, the populist founder of Morena with a cult following among much of the electorate.