Mexico, one step away from the elections
Elections will be held in Mexico on Sunday 2 June. The President is directly elected every six years and the system does not provide for re-election. The candidate who gets the most votes wins, there is no second round.
The three candidates for President are Claudia Sheinbaum, Xochitl Galvez and Jorge Alvarez Maynez. Sheinbaum she is from the center-left Morena party and has always been a front runner in the polls. You represent continuity with the current President. AMLO’s support certainly helped, even if it is not so usual in this country for an outgoing President to so openly support a candidate. Galvez she is the candidate of the centre-right opposition coalition. At the moment she does not appear to have been able to attract votes with the promise of change. The fact that during her electoral campaign she changed her slogan several times and the people close to her probably had an impact. In the end, Maynezthe center-left candidate for the Citizens’ Movement, started the election campaign a little late compared to the other candidates, who seeks to represent a popular alternative among young voters.
Sheinbaum has always had a large majority of votes according to published polls, the consensus for the three main candidates has always been quite stable over time and the electoral campaign has not changed the approval rate.
It turns out quite surprising how the consensus for the outgoing party and for the candidate supported by the outgoing President is very high and stable, this is dissonant with the population’s perception of the current state of the economy which worsened during the last years of the AMLO Government. The only element that all surveys report growing is the population’s perception of social assistance. AMLO, in fact, has positioned himself as the advocate of subsidies to the population and the government has also proven to be quite effective in fighting poverty in the country. It should not be forgotten that, in addition to the fact that AMLO was a very charismatic leader, it must also be considered that traditional parties are continuing to lose support.
In addition to the election of the President, there will also be voting for members of Congress. If Sheinbaum’s victory is taken for granted, the margin of victory and majority that the coalition (Morena, PVEM and PT) will obtain in the two chambers of Congress is uncertain. It is taken for granted that it will obtain a simple majority, but the coalition’s ability to obtain the qualified majority necessary for constitutional reforms is doubtful.
What to expect from the change of government?
It is difficult to understand how Sheinbaum will govern, since AMLO is practically running the election campaign. She she comes across as quite calm and with little charismawithout the control of other party members, for this reason the risk is that it will radicalize, to try to keep the party united and guarantee votes in Congress, without giving in to negotiations with the opposition. For now, his desire to signal is clear a certain continuity with the current Government.
To be able to distance herself from AMLO she will need time, she will not be able to do it immediately after coming to power, first she will have to gain political capital.
From a public finance point of view, many of his electoral promises imply an increase in public spending, we will have to see how much room for maneuver he will have given that he has also promised to maintain a stance of fiscal austerity. The first appointment after the elections to have a clearer idea of the new administration’s approach to the tax issue will be the presentation of next year’s budget in mid-November. Sheinbaum has also repeatedly underlined his attention towards environmental issues, while during the electoral campaign, the theme of investment development and increasing the country’s competitiveness did not have much space.
In addition to domestic elections, Mexico will be particularly affected by elections in the United States, later in the year. These are relevant to dictating the political direction for the coming years globally, but have particular relevance for Mexico given the close ties between the two countries. Mexico’s position in US politics is not particularly friendly, although recently the attention of US foreign trade policy has been directed more towards China. The recent duties imposed by the Biden administration on imports from China have been in the spotlight, it could be more worrying for Mexico if a more extensive measure of imposition of duties on all imports were to be carried out. Mexico is currently benefiting from the nearshoring process, which is expected to continue in the coming years.
*Macro Economist, AcomeA SGR
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