Mexico’s economy is declining & faces mounting threats
by Macario Schettino.
In my first column for The Mexico Brief, six weeks ago, I wrote that Mexico was in a recession. Now that we are nearing the end of the year’s first half, the evidence is even stronger. Although an unusual event in February has led many to think otherwise, the truth is that we are already seeing a generalized downward trend.
Consumption contracted year-over-year for the fourth consecutive month in March, and the preliminary indicator suggests no meaningful change in April and May. On average, the decline has been -0.5% compared to the previous year, starting from last October when the current administration took office.
In investment, the situation is worse. The decline began in September, and the following seven months have all shown negative numbers, averaging a yearly contraction of -4.4%, also since October.
In overall economic activity, growth since October is flat, with three out of those six months showing contraction. The impact is now noticeable in employment, with monthly declines and virtually zero annual growth. It’s worth remembering that — since the year 2000 — whenever employment grows at a rate below 1% annually, a recession is a certainty.
Except for employment data, which we have up to May, the rest of the indicators end in March and therefore do not yet reflect the full impact of global uncertainty caused by Donald Trump — especially since the “Liberation Day” event on the afternoon of April 2. We don’t know much about what has happened since then, except in the case of remittances, which saw one of the steepest drops on record in April: -12% compared to April 2024.
Claudia Sheinbaum faces adversity
by Luis Rubio.
Editor’s note: Mr. Rubio as a political analyst and chairman of México Evalua.
From the moment she was nominated as Morena's presidential candidate, speculation arose regarding her capacity and willingness to break with her predecessor, as has been the tradition in Mexican politics. Although speculation has not ceased, the evidence is overwhelming: the president sees herself as an operator or implementer of AMLO’s agenda. However, circumstances have changed, and the need to respond to a scenario infinitely more complex than the one her predecessor faced (in part due to the legacy he left behind) is forcing her to increasingly take actions that he clearly disapproves of. The question then is: what comes next?
In Mexican political tradition, it was said that the outgoing ruler did not choose a successor but rather an executioner. That clearly did not happen with AMLO, who carefully selected someone with the skills to manage a government, but not to undertake bold political initiatives. Which of these paths will prove true? So far, there is no doubt that AMLO’s logic dominates the landscape. At the same time, it’s not clear what the true profile of the government led by Sheinbaum actually is.
Boz, a publication focused on Latin American governments, conducted an interesting analysis of Claudia Sheinbaum.
Judicial reform is Sheinbaum’s Frankenstein
by Emiliano Polo.
Mexican President Claudia Sheinbaum will not govern the political order she has helped construct. Under the guise of a so-called “judicial reform,” she has championed the creation of a new political system, one that now lies beyond her control. In their relentless pursuit of domination, she and her party failed to establish a coherent regime, instead unleashing a disordered and volatile landscape they neither fully understand nor command. She likely believed she was inheriting the rewards of a master plan orchestrated by the previous López Obrador administration to concentrate power. In reality, she accepted a Faustian bargain, one that now threatens to consume its intended beneficiaries.
Illiberal regimens indeed have to subdue and weaken the judiciary not only because they are barricades against arbitrariness, but because judicial systems are complex arrangements, hard to redesign and reestablish; any attempt by the opposition to reestablish the rule of law will be an arduous and lengthy process: national legal systems go beyond norms, bills, lawyers, and judges; they shape and constitute practices, mores, and attitudes that are hard to reconstruct.
The president and the ruling party, which no longer complies with her wishes, will control some judges, maybe most of the time, but not all the time; and it is precisely in this projection of inconsistency that a sign of weakness will prevail instead of power and control.
This was a reform not just designed to weaken the judiciary but to distribute it as a bounty; as in any corrupt scheme or proposition, the supporters expected their reward and part of the spoils. Likely, the president thought she would be spared from the unpredictable and anarchic environment that she sponsored; most likely, she will be a victim.
Pride & Prejudice: Mexico’s flag becomes a flashpoint — again
by Arturo Sarukhán (Ambassador of Mexico to the United States, 2007 - 2013)
This was a domestic clash waiting to happen, largely concocted in the Oval Office but potentially exacerbated in Mexico City’s National Palace, risking spillover into bilateral ties with Mexico.
Last Friday, after the US Department of Homeland Security conducted workplace raids in Los Angeles’ garment district targeting undocumented immigrants, protests erupted against ICE. President Donald Trump then took an unprecedented step, commandeering California’s National Guard to crack down on protesters. Demonstrations had been mostly peaceful, but tensions flared significantly after Trump deployed troops, intentionally confronting a Democratic mayor and governor. By sidestepping Gov. Gavin Newsom’s authority, Trump pushed presidential boundaries and fueled criticism of inflaming the situation for political gain. Undoubtedly, it has all the elements the president seeks: a showdown with a top political rival in a deep blue state over an issue core to his agenda and appealing to key voter segments.
Yet, as with everything in this polarized, social media-driven era, where immigration policy and immigrants themselves are weaponized, the events unfolding in Los Angeles resonate far beyond civil rights and constitutional debates, or authoritarianism versus liberal democracy, or even red versus blue America.
Morena’s voter disconnect laid bare in judicial vote
by David Agren.
Former president Andrés Manuel López Obrador appeared in public for the first time in eight months to cast his ballot in the recent judicial elections. The man known as AMLO voted using a cheat sheet, which listed the candidates endorsed by his Morena party.
“I wanted to participate in this historic election,” AMLO said afterward. “I’m very happy to live in a free and democratic country.”
AMLO along with his protégé and successor, President Claudia Sheinbaum – whom he lauded Sunday as “the best president in the world” – hailed the election of nearly 900 judges and magistrates as a democratic success.
The country’s hapless opposition branded the exercise a farce and boycotted the process. Many Mexicans, meanwhile, showed a crushing indifference and stayed home; just 13% of registered voters cast ballots, while 10% of those ballots were annulled.
The elections delivered the outcome that AMLO presumably wanted when he purged the courts with his so-called judicial reform and put all judges and magistrates, including supreme court justices, to popular vote.
The supreme court candidates on most of the cheat sheets distributed by Morena operatives won their races. Three of the justices: Yasmín Esquivel, Lenia Batres, Loretta Ortiz, were already on the bench – with the first two nominated by AMLO – while of the others had ties to the former president.
Many Mexicans won’t vote in Sunday’s judicial elections; will AMLO?
by David Agren.
Mexico holds judicial elections on Sunday, which will select nearly 900 judges – including supreme court justices – via popular vote. But the much anticipated elections are unfolding amid confusion, controversial candidates, and crushing disinterest – with voters paying scant attention and the ruling MORENA party marshalling voters in what was supposed to be a non-partisan vote. Then there’s the opposition boycott.
President Claudia Sheinbaum targeted the opposition throughout the week leading up to the June 1 vote. She jawboned them from the bully pulpit of her morning press conference. And she employed the familiar schoolyard taunt effectively used by her predecessor and populists the world over: I know you are but what am I?
“Who is more anti-democratic: the ones calling for everyone to elect the judiciary or the ones calling for not voting? Who is more democratic?” Sheinbaum said in the Wednesday mañanera. “The argument is very convoluted, isn’t it? If the president had wanted to pick the Supreme Court’s justices, we wouldn’t have ended up as we were before. Why all the fuss?”
Three points on Mexico’s judicial vote
by Luis Rubio.
Judicial reform reaches its critical moment this coming Sunday. After the constitutional reform was approved last September, this Sunday citizens will vote for judges, magistrates, and justices of the Supreme Court of Justice. There is no precedent in the world (with the small exception of Bolivia) where a country has undertaken an exercise of this nature. The requirements for someone to aspire to one of these positions were minimal and unrelated to the function they are to perform. In fact, the most important requirement was having been approved by a panel in which Morena had a majority in almost every case. However, this does not mean that Morena is (or acted as) a monolithic bloc; rather, everything indicates that the candidates for the various positions reflect the diversity of interests within Morena’s factions and some societal groups, including organized crime.
The main argument used to justify the election was that democracy means electing judges directly by the electorate. The logic behind this is a literal interpretation of democracy, as opposed to the traditional liberal definition, which includes checks and balances. Above all, the reform rejects the notion that the role of the judiciary is to interpret and enforce the law, and, in the case of the Supreme Court, to resolve “ties” between the other two branches of government — the executive and the legislative.
Three considerations about what lies ahead:
Claudia Sheinbaum’s terrible, no good, very bad week
by David Agren.
Claudia Sheinbaum has suffered perhaps the worst week of her administration – marked by the murders of two senior functionaries in the Mexico City government.
How bad was her week?
Over the weekend, the Cuauhtemoc, a Mexican Navy ship, crashed into the Brooklyn Bridge while on a global goodwill tour. The crash, which New York City officials say was caused by a mechanical failure, resulted in the deaths of Naval cadets, América Yamilet Sánchez, 20, and Adal Jair Maldonado, 23.
On Tuesday, Ximena Guzmán, personal secretary to mayor Clara Brugada, and José Muñoz, a government advisor, were killed in cold blood as they commuted on a busy thoroughfare. The suspect remains at large and no motive has been offered for the assassinations.
The day before in Guanajuato state, seven young people were killed when gunmen arriving in SUVs shot up a parish festival in the town of San Bartolo de los Berrios.
Crony capitalism
by Macario Schettino.
In the 20th century, the Mexican economy - like the rest of Latin America - chose a policy known as Import Substitution Industrialization. The goal was to produce in Mexico what would be consumed domestically, and to achieve that, tariffs were imposed on imported goods. In theory, infant industries would be able to survive, become competitive, and tariffs could then be eliminated. The opposite happened: tariffs had to be increased because domestic industry never became competitive. Eventually, the economy was completely closed off and suffered its worst peacetime crisis in 1982.
In 1986, an attempt was made to reverse course. Mexico joined the GATT, implemented an anti-inflationary plan, renegotiated its external debt, and even signed a trade agreement with the United States and Canada. After a deep but brief crisis, the benefits of NAFTA became evident. In the final years of the 20th century, Mexico grew at rates it hadn’t seen in decades.
In 2001, China joined the WTO (GATT’s successor), and the dot-com recession hit the United States. This derailed the Mexican economy, which was unable to resume strong growth, instead remaining at an average annual rate of around 2%. During those years, many studies - by Mexican and foreign academics, agencies, and institutions - tried to identify the reasons why Mexico could not grow faster.
Baja California’s Governor loses US visa
by David Agren.
When US President Donald Trump alleged an “intolerable alliance” between drug cartels and the government of Mexico - made as he first unveiled tariffs on the country in January - Mexican President Claudia Sheinbaum bitterly objected.
She branded the claims “slander,” and shone a spotlight back on the US. “If there’s a place that such an alliance exists it’s with US gunmakers, which sell high-power weapons to these criminal groups,” she said.
Sheinbaum later showed White House evidence for its narco-alliance claim, which featured a news story on former public security secretary Genaro García Luna – a common foil for Sheinbaum and her ruling Morena Party – being convicted in a US court of taking bribes from the Sinaloa Cartel. She used the White House including his case as proof that drug-cartel collusion was a thing of the past.
Fernández Noroña: the chaos agent in charge of Mexico’s Senate
by David Agren.
Senate President Gerardo Fernández Noroña pulled up to a party event last Sunday in a swank SUV. The Institutional Revolutionary Party took notice.
“.@fernandeznorona talks like he was part of the people, acts like an authoritarian … but he loves living like a fifí.”
Fernández Noroña predictably exploded, unloading on the PRI with a hyperbolic tirade.
He called them, “A bunch of thieves,” then defended himself saying, “Everything I have I’ve earned through my work and effort. Not like you.” He continued with the usual righteous line that politicians in the ruling coalition take with their opponents, accusing the PRI of having “plundered the country,” and branding them, “Repressors, plunderers, and frauds, as well as traitors to the nation. And that’s putting it mildly.”
Fernández Noroña is what the Canadians might call a “shit disturber” – a person who has long caused mischief in Mexican politics and whose reputation for picking fights and flouting norms precedes him.