Cracks Emerge In Morena’s Political Dominance

President Andrés Manuel López Obrador's party loses its supermajority in the Mexican Congress and suffers an embarrassing defeat in Mexico City but what's next and what does it mean for your business?

According to our sources, Mexico is rapidly becoming an autocracy with all roads leading to President Andrés Manuel López Obrador (“AMLO”) who reigns supreme in the face of a fragmented opposition incapable of mounting any form of fightback.

Following the mid-term congressional elections that took place on 6th June, are there glimmers of hope for the return of democracy after AMLO’s Morena party loses its supermajority? Or, in the face of gross mismanagement of the pandemic and a faltering economy is Morena’s retention of a simple majority better than they had hoped for?

AMLO rose to power with a populist discourse against the powerful elite who he alleged had betrayed the people and victimised the poor. His socialist agenda resonated well with the working class and his apparent determination to tackle corruption won over much of the middle-class too. The President has modestly referred to his presidency as the 4th transformation (“4T”) of Mexico – after independence from Spain, the liberal reforms of the 19th century and the revolution of the 20th century – as he sought to deliver politics without corruption, privilege or impunity and leave the neoliberal approach of previous administrations behind.

Despite leaving behind many left-wing intellectuals, human rights activists, feminists, environmentalists and indigenous people who voted him in to power, AMLO still enjoys an impressive 65% approval rating and has become allies with many of the powerful elite he swore to bring down such as Carlos Slim and Ricardo Salinas. Indeed, despite being the President, AMLO somehow manages to exploit his anti-Establishment credentials by positioning himself as an outsider and an enemy of the status quo, helped along the way by Mexico’s traditional political parties (PRI, PAN, and PRD) allying with each other against him.

There are signs that the tide may be turning, according to a previously high-ranking but now estranged Morena politician, “Until a few months ago, a sweeping triumph for Morena was expected but the results have shown a smaller majority for Morena countered by an important growth of the Green and the Movimiento Ciudadano that can balance powers. The former now allied with Morena, the latter still undecided. The most interesting results were the losses in Mexico City, Morena’s most important stronghold, mostly likely due to the fallout of the Line 12 subway tragedy.”

“The most interesting results were the losses in Mexico City, Morena’s most important stronghold, mostly likely due to the fallout of the Line 12 subway tragedy.”

Former senior politician, Morena party, Mexico

These congressional elections were closely watched and politically important, not just because of those elected but because they provided a strong indication of AMLO’s popularity. The President knew this, as a political analyst and pollster explained, “Morena’s entire campaign was around AMLO, without him, sympathy for the party falls. AMLO even got involved directly, not only in the selection of candidates, but openly in public, during his mañaneras [televised briefings to the people] and their events supporting Morena, reviling rivals, to the point the INE [El Instituto Nacional Electoral] had to intervene. AMLO even involved the FIU [Financial Intelligence Unit] to destabilise the opposition in Nuevo León with accusations of illicit activities.”

Accusations of the Executive meddling in the congressional elections also include: intimidation, threatening the loss of social benefits, destroying opposition campaign materials, and even using COVID vaccines to attract voters. The opposition are not free from accusations of misbehaviour either. All of this will mean that many results, such as those in Nuevo León, are likely to be contested in court – nothing new for Mexico!

And what about the results? Well, the political analyst believed that “Everyone won a little: the opposition gained credibility, made gains in Mexico City and the north, and won a little more leverage in Congress. Morena also won because they maintained a majority, despite losing the super majority, winning in Sinaloa, Colima and maintaining Baja California Sur. The loser is democracy because the institutions look very weak and we will likely have to reinvent our electoral system, again.”

“Everyone won a little, the opposition gained credibility, made gains in Mexico City and the north and won a little more leverage in Congress. Morena also won because they maintained a majority.”

Political analyst, Mexico City

The electoral battle is now over but the post-electoral conflict begins, “The next legislature begins in September and the parliamentary coalitions will have to be established,” a constitutional lawyer explained, “the great budget battle is coming too so any major reforms will need to wait until 2022. Morena will continue to face difficulties in making constitutional changes – they are already losing such battles in the courts.” A former Morena politician agreed, “Like all elections in Mexico, there are allegations of voter coercion and intimidation and AMLO flagrantly intervened in the campaign so a post-electoral conflict will be inevitable.”

AMLO also has one-eye on the 2024 presidential elections according to the political analyst, “Re-election is on the agenda for AMLO but it won’t be easy as demonstrate by these results. AMLO’s age and health will become an increasingly important issue, will he be able to throw himself into another six-year term? There are rumours that COVID has had an adverse effect on his health.”

To complicate matters further, there are several aspiring successors waiting in the wings, as a renowned Mexican economist observed, “An important point is that the presidential succession process has begun with these results and two of AMLO’s possible successors, Marcelo Ebrard (Secretary of Foreign Relations) and Claudia Sheinbaum (Head of the government of Mexico City) have lost credibility after Morena lost in CDMX. In contrast, the leader of the Senate of Morena, Ricardo Monreal, whose brother won the governorship of Zacatecas is on the ascendancy.”

“Two of AMLO’s possible successors, Marcelo Ebrad and Claudia Sheinbaum have lost credibility after Morena lost in CDMX. In contrast, Ricardo Monreal is on the ascendancy.”

Renowned economist, Mexico

Central to any re-election hopes will be economic recovery. Unlike many similar countries, Mexico has provided very little fiscal support to its economy with the government’s stimulus plan amounting to just 1.1 per cent of GDP, an eighth of what Brazil has committed. Populist President AMLO is surprisingly a fiscal conservative and is fiercely opposed to taking on additional debt and has instead focused on maintaining the payment of social benefits and a few trophy infrastructure projects.

The government’s austere approach has indeed kept debt levels low, at 65.5 per cent of GDP, according to the IMF, but emergency funds have been drained and economists argue that a lack of government spending will hold back the country’s recovery until 2026, compared to 2023 for Brazil. A former federal legislator reinforced the growing importance of AMLO’s economic track record, “Mexico’s economy has grown a mediocre 2 per cent per annum on average since 1980. Even before the pandemic, the economy was declining due to AMLO’s structural reforms. The absence of an economic reactivation programme following COVID is a challenge for AMLO’s credibility.”

“Even before the pandemic, the economy was declining due to AMLO’s structural reforms. The absence of an economic reactivation programme following COVID is a challenge for AMLO’s credibility.”

Former federal legislator, Mexico

Regarding the opposition, although they have made gains, there are no solid candidates with an agenda to compete with AMLO. They need to come forward with policy solutions for inequality, corruption, security and economic stagnation if they are to have any hope as a credible alternative. An experienced government official and former campaign manager has little hope for the opposition, “It is empty, it has no substance, and whatever gains were made are because of the government’s mistakes, not because they have a credible policy alternative. There is no chance of political renewal. It’s like Venezuela: the populist government is popular, and the opposition is politically bankrupt.”

“[The opposition] is empty, it has no substance, and whatever gains were made are because of the government’s mistakes, not because they have a credible policy alternative.”

Former government official and campaign manager, Mexico

The estranged Morena politician summarised, “By 2024, everyone will have to do better. Morena needs to sort out its internal issues, including: the coup in the image of Claudia Sheinbaum and Marcelo Ebrard and the dispute that got them into trouble in Guerrero and left Felix Salagado half out. The opposition needs to get serious about rebuilding itself, it has to let go of the past if it wants to compete, their current alliances helped to reduce Morena’s victory but they are not strong enough to displace Morena.

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