Female Presidential Hope in Mexico
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Mexico is poised to make history by electing its first female president in June, with both leading candidates being women. However, regardless of who wins, the new president will likely face significant constraints on her ability to govern independently due to the initiatives and financial commitments made by outgoing President Andrés Manuel López Obrador.
As López Obrador‘s term nears its end on Sept. 30, he continues to propose costly projects, leaving many unfinished. These projects will likely limit the flexibility of his successor, given the financial burden they entail. Even if opposition candidate Xóchitl Gálvez emerges victorious, she will inherit a country grappling with financial challenges. The candidate from López Obrador’s party, former Mexico City mayor Claudia Sheinbaum, currently leads in polls.
Moody’s Analytics Director Alfredo Coutiño highlights the fiscal constraints that the next administration will face, emphasizing the need for fiscal adjustments in 2025 to address the current financial vulnerability.
López Obrador’s plans include the expropriation of U.S.-owned Vulcan Materials, potentially costing the Mexican government billions if an international arbitration complaint rules against Mexico. Additionally, there is a promise to reintroduce passenger trains to Mexico, further adding to the financial commitments.
Despite financial concerns, López Obrador continues to initiate new projects, such as launching a state-owned airline and guaranteeing workers retirement at full pay. These endeavors, though ambitious, pose significant financial risks.
Sheinbaum, seen as López Obrador’s loyal follower, pledges to continue his programs while introducing new proposals. However, Moody’s recent downgrade of the national oil company, Petroleos Mexicanos (Pemex), to junk bond status indicates looming financial challenges.
The next president will inherit a range of unfinished projects, including a costly oil refinery and a lengthy railway project. López Obrador’s initial promise to complete these projects through government cost-cutting and reduced corruption has not materialized.
Mexico’s escalating debt further complicates the financial landscape. Despite López Obrador’s claims of lower borrowing rates compared to his predecessors, Mexico’s debt-to-GDP ratio remains concerning, with additional debt held by state-owned entities like Pemex.
The outgoing president’s spending decisions, while aiming to leave a lasting impact, may burden his successor with significant financial challenges. López Obrador’s approach mirrors past instances of outgoing presidents shaping the political agenda for the incoming administration, underscoring the complexities of governance transition in Mexico.
Repurposed article originally published in the New Indian Express
