Investors in Mexico have “nothing to worry about,” President-elect Claudia Sheinbaum said Tuesday as she sought to calm concerns over a proposed judicial reform that will be considered by Congress later this year.
Markets have reacted nervously to the comprehensive victory of Sheinbaum and the ruling Morena party in the June 2 elections. The Mexican peso slumped to as low as 18.97 to the US dollar on Wednesday morning, a depreciation of over 10% compared to its pre-election level.
After meeting with President Andrés Manuel López Obrador on Monday, Sheinbaum said that there would be “broad consultation” on the proposed judicial reform that would allow citizens to directly elect Supreme Court justices and some other judges.
The constitutional bill is set to be considered by the Congress in September, when Morena and its allies will have a supermajority in the lower house and a large majority in the Senate, putting them in a strong position to approve that proposal and others put forward by López Obrador in February.
At a press conference on Tuesday, Sheinbaum addressed investor concerns about the proposed judicial reform — which critics say will reduce checks on executive power — as well as other planned constitutional changes, including ones to disband a number of government autonomous agencies and overhaul Mexico’s electoral system.
“My message is that investors have nothing to worry about,” said the president-elect, who will be sworn in on Oct. 1.
Sheinbaum said that the so-called “fourth transformation” political project she now leads seeks “more justice in all senses: social justice, environmental justice, justice for women [and] a justice system that works.”
“So national and foreign investors have nothing to worry about, their investments in Mexico are safe, obviously within the framework of our laws,” she said.
“They have no reason to be concerned about a reform in the judicial power because it’s ultimately about building a better justice system for our country,” Sheinbaum said.
“.. The important thing to know for those who are going to invest in Mexico is that there is investment certainty in our country, there is social and political stability,” she said.
The president-elect expressed confidence that foreign companies will continue to relocate to Mexico as part of the growing nearshoring trend because the rule of law will continue to be respected, the economy is strong and the government will always be open to dialogue.
She has previously said that nearshoring will help drive significant economic growth during the 2024-30 presidential term, but has stressed that Mexico wants the kind of investment that generates “wellbeing” for its people.
Sheinbaum made similar remarks on Tuesday, saying that there is an “agenda” for the Mexican people and a planned “national project” to pursue.
Sheinbaum discusses trade, migration and security with US officials
Sheinbaum held her press conference on Tuesday after meeting with United States Ambassador to Mexico Ken Salazar and U.S. Homeland Security Advisor Elizabeth Sherwood-Randall.
Omar García Harfuch, who served as security minister in Mexico City during Sheinbaum’s mayorship, and Juan Ramón de la Fuente, Mexico’s representative to the United Nations and the president-elect’s transition coordinator, also attended the meeting.
Sheinbaum told reporters that they discussed trade, migration, women’s issues and security – including the entry of firearms to Mexico from the U.S. – but didn’t reach any agreements.
She described the talks as “informal” and cordial. Sheinbaum said she expressed her “interest” in continuing with the high-level bilateral dialogue once she becomes president.
Mexican and U.S. officials have held a number of high-level security and economic dialogue meetings during López Obrador’s presidency.
Sheinbaum also said she would maintain López Obrador’s focus on addressing the root causes of migration as a means to stem the flow of asylum seekers to the Mexico-U.S. border.
The current president has urged the United States government to allocate more resources to development programs in Latin America and the Caribbean, and Sheinbaum said “we will continue to insist on development cooperation” from the U.S.
The president-elect said on social media that Mexico would continue its “policy of friendship, dialogue and understanding” with the United States, adding that there would be “respect for our sovereignty.”
Ambassador Salazar said that he and Sherwood-Randall had “very good and friendly” talks with Sheinbaum and her team about the “ties between our nations and shared values, reaffirming our spirit of cooperation and that we are family.”
With reports from Reforma, El Universal and El Financiero
Not to split hairs, but there is no such thing as “nothing to worry about” for an investor. No matter what decision you make, something unforeseen can happen that impacts your investment. If you can’t stand worry, put the cash in fixed-rate guaranteed interest savings (and then you can worry about whether you should have done something more chancy).
Lies, lies, and more lies”. That’s the only thing the new President can “announce”, Nothing in the entire world is O.K. People are struggling in trying to make a living. The government doesn’t KNOW HOW TO FIX THE ECONOMY. The government is begging for foreign investors. The value of the “peso” is going to continue to lose its value. The new President better start finding other people that are “smart” for her administration, instead of keeping the “DUMB” STUPID PEOPLE IN HIGH PLACES THAT DON’T KNOW NOTHING”.
Good luck because you are going to need all the luck in the world. LIFE IN MEXICO IS HARD.
How can she say that the rule of law is being protected? A third of the country is run by cartels!
Corruption is still rampant.
The question of judicial reform, in which judges get elected, has to do with a lot more than investment.
AMLO’s shoot-from-the-hip populist errors were bad enough when it meant botching the new airport. That just wasted money. Excessive power vested in the military is much more serious. Judges beholden to political movements is worse yet.
Judges need to be the best, intellectually and morally. And they need to be truly independent. That is something that has been improving in Mexico only recently. As persons equally affected by the justice system as Mexican citizens, let us continue to monitor the details of the proposals, and be unafraid of voicing our opinions.
Well, it’s pretty good news for Mexico. Claudia Sheinbaum will continue where AMLO left off, which you’d expect with the same party politics and policies that have had a positive impact on the economy.
AMLO has implemented extensive social programs aimed at reducing poverty and income inequality. These programs include scholarships for students, pensions for the elderly, and support for marginalized communities. By increasing the disposable income of the less well-off, these initiatives stimulate domestic demand and support economic growth.
We’ve also seen significant investment in infrastructure projects such as the Mayan Train, the Dos Bocas Refinery, and the Felipe Ángeles International Airport is creating jobs and boosting economic activity. These projects also improve connectivity and logistics, enhancing Mexico’s attractiveness for business operations and tourism.
Under AMLO, the minimum wage has been raised several times, significantly increasing the purchasing power of low-income workers. This policy helps to boost consumption, which is a critical driver of economic growth. All this and more means investors are attracted to Mexico and, as Claudia points out, there’s no need to suspect any major changes.
Mexico is benefiting from the trend of nearshoring, where companies relocate their supply chains closer to their home markets to reduce risks and costs associated with long global supply chains. This trend is driven by Mexico’s proximity to the United States, competitive labor costs, and extensive trade agreements.
The commitment of Banxico to maintain low and stable inflation, along with prudent fiscal policies, provides a stable macroeconomic environment. This stability is crucial for attracting long-term foreign investments. Despite some controversy, AMLO’s energy policies aim to make Mexico self-sufficient in energy. This includes promoting state-owned enterprises like PEMEX, which could stabilize energy prices and supply, further attracting manufacturing investments reliant on consistent energy availability.
Big issues such as the increase in water consumption that investment often brings, especially but not only in the manufacturing industry, raising additional revenue to support an aggressive social welfare program will always be an issue as will controlling inflation and the rising cost of living. And here Claudia Sheinbaum and Banxico will need to do a little more than raise interest rates. It’s doubtful they’ll want to raise taxes or, in this respect, take a close look at the informal economy which employs upwards of 30 million people and generates over 25% of the country’s GDP. Many challenges as always, but for sure ALMLO, Morena, and now Claudia Sheinbaum are headed in the right direction.
As a journalist and co-editor of and investor in a bilingual news organization, I will be watching the new administration carefully for its transparency as well as its policies. AMLO has managed to benefit a large portion of the population but he ignored violence an wasted money on a useless airport. Plus the ascendency of the military may come back to bite us in the mid to long term. I will give the news president the benefit of the doubt during the honeymoon period, but at some point being the first female in the office is not enough -although it is a major accomplishment for her and for Mexico. Sha has to solve the problems AMLO ignored, and not create any new ones. A tall order for any national leader; but we always expect more of women, and they usually deliver. From a journalist’s point of view, her administration going to be very interesting, starting with the so-called constitutional “reforms”. I am looking forward to telling my readers who will win and who will lose, if we can find out
Securing the border will help both countries tremendously. I hope Claudia will put some serious focus on that.