Claudia Sheinbaum Elected as New Ruling Leader for Left-Wing Party
This Sunday, Claudia Sheinbaum was elected the new ruling leader for the left-wing party. Sheinbaum is a protégé of the current president, Obrador. Mexican presidents can’t run for reelection – that’s an interesting concept! Term limits!
Policy Continuity and Economic Concerns
We shall see whether she continues many of the same policies. Mexico has become a mecca for manufacturing aimed at the North American market. They have spent lavishly on entitlements for the poor and middle class.
Economic Repercussions
The Mexican peso dropped in value as did the stock exchange out of concerns that the new leftist government will eliminate independent regulatory bodies. We shall see what occurs prior to the transition in September and October of this year.
Sheinbaum's Background and Business Stance
The new president has a doctorate in energy engineering. She lived in the San Francisco area in the 1990s. She claims to respect business freedom. Even so, the public health system is broken, and Mexico has a large fiscal debt deficit. The state-owned oil company has $103 billion in debt and owes suppliers more than $20 billion. It’s always hard to get a company to grow with such debt burdens.
Energy Sector and International Agreements
Should she eliminate the private investors in the electricity and oil exploration business, which some fear, this is a violation of the US-Mexico-Canada Agreement, and she will need to address the other two countries. Obviously, President Biden has not weighed in on this; however, one would speculate that he would be in favor of government control of more sectors as would Trudeau.
Cartel Control and Border Security
An equal challenge will be the cartels that control large parts of the country with rampant extortion. Human smugglers run the caravans that bring migrants to the US border. Some speculate there have been 8 million in the last several years. The United States has a huge stake in this border and should encourage a relationship with law enforcement in the US with the new Mexican leadership. It is not a good situation to have cartels dominating the border. Hopefully, the new president will be able to stabilize the border and decrease the volume of drugs and murder affiliated with the cartels' free rein.
