AMLO’s Ambition to Transform Mexico on the Line in Midterm Vote

Hours before a call with Vice President Kamala Harris last month, Mexican President Andres Manuel Lopez Obrador unexpectedly assailed the U.S. for sending money to non-profits critical of his government.

“It’s interference,” he told reporters. “It’s promoting coups.”

Rather than targeting Washington, the eye-opening example of the president’s us-against-them rhetoric was likely aimed at a domestic audience.

Midterm elections on June 6 present the biggest challenge yet for Lopez Obrador’s self-declared “fourth transformation” of Mexican society. The notion that foreign actors are meddling in Mexican politics is one of many that Lopez Obrador wields as evidence of attempts to sabotage his program.

AMLO’s Ambition to Transform Mexico on the Line in Midterm Vote

Certainly the stakes are high: Sunday’s ballot will be Mexico’s largest-ever election by number of candidates. Up for grabs are the entire lower house of Congress, 15 state governorships and hundreds of city halls and local legislatures.

Lopez Obrador’s Morena party and its allies are vying to retain their super-majority in the 500-seat lower house, a result that would set the stage for sweeping nationalist reforms in the second half of his six-year term, most notably to the energy sector.

Any significant drop in support would indicate that the president who won a landslide in 2018 has lost his sheen, and that the pandemic-induced political uncertainty buffeting countries from Chile to Colombia and Peru may now be creeping into Mexico.

If it retains its two-thirds majority, “we could see a very big advance in the government’s agenda,” said Cintia Smith, a political scientist at Tec de Monterrey university. However, she regards a smaller majority as more likely, requiring deal-making to pass legislation. In that case, she said, “not much is going to get done.”

Markets have been largely unfazed by the election as traders focus on international drivers. Mexico’s benchmark dollar bonds are up 1% over the past month, while the peso has strengthened about 4% in the last three months, one of the best performers among major currencies.

Pollsters are still predicting record turnout.

AMLO’s Ambition to Transform Mexico on the Line in Midterm Vote

Lopez Obrador, 67, a populist with left-wing roots who defies easy classification, is a polarizing figure. His regular outbursts at the media and “elites” shore up support among his base in the poorer south of the country. Yet they risk turning off the key strata of more educated voters who, fed up with corruption among established parties, backed him three years ago.

The president has played a domineering role in Mexican politics since he came to office. With a fondness for fiscal austerity, he has passed a pro-worker pension reform while setting aside money to plow into new social programs, state oil giant Petroleos Mexicanos and a handful of big infrastructure projects. But the constitutional reforms inherent in his transformation remain a work in progress.

Lopez Obrador is not legally allowed to campaign for this vote, and has been scolded by the electoral authorities for doing his best to boost his party. In his lengthy daily press conferences — during one of which he launched his surprise attack on the U.S. — the president has accused opposition candidates of illegal electioneering, slammed the election institute, and delightedly shown footage whenever a few thousand vaccines land in Mexico.

At a local level, however, it’s not clear if the strategy is working.

The election has been one of the most violent in Mexican history, with dozens of candidates murdered, kidnapped or attacked. Lopez Obrador’s failure to reduce bloodshed through his “hugs not bullets” strategy is one of several factors that may have harmed Morena’s chances, said Lorena Becerra, head of public opinion research at Reforma newspaper.

AMLO’s Ambition to Transform Mexico on the Line in Midterm Vote

“He’s not well rated on issues like security and the economy that are very important in the minds of voters,” she said. His government has also been damaged in the core stronghold of Mexico City by a deadly metro accident on a new line overseen by two of his key allies.

For all his detractors, Lopez Obrador maintains strong personal support, despite Mexico suffering among the highest death tolls of any country during the pandemic. The economy, which was already in recession in 2019, plunged 8.2% last year — its worst performance since the Great Depression — before showing signs of rapid recovery this year. 

The majority of Mexicans don’t hold him to account for the scars of Covid, taking the view that “there’s very little we can do, we’re a poor country,” said Carlos Bravo, an analyst and professor at CIDE in Mexico City.

While some investors welcome the prospect of a more divided lower house that could check his power, that scenario depends heavily on the president’s willingness to negotiate, says Goldman Sachs Group Inc. chief Latin America economist Alberto Ramos.

The risk is that a wounded president would become “more confrontational and resort to direct-democracy populist mechanisms” in a bid to sidestep Congress, Ramos wrote in a recent note. The result, he said, could be “rising political noise and polarization, and heightened policy and regulatory uncertainty.”

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.