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Mexico charts a new course

What happened?

The Mexican leftwing antiestablishment leader Andres Manuel Lopez Obrador (short: “AMLO”) lost two presidential elections in 2006 and 2012. In recent elections, however, he won decisively with 53% of the vote, more than twice the share of the number two. His party also took control of Congress. Several factors explain AMLO’s current ascent to power: high-profile corruption cases tainting the ruling PRI, Donald Trump’s confrontational stance towards Mexico and persistent social problems of inequality, poverty and violence together have caused antiestablishment sentiment in the country.

What does this mean?

Mexico is entering a new phase of its development. Following a bloody civil war in the early 20th century, one party, the PRI, ruled the country from 1929 to 2000. Initially, the PRI created one of the most state-led economies in Latin America. Following the 1980s, however, it made a marked shift towards open markets. The country signed NAFTA and became one of the global leaders in the amount of free trade agreements. After this economic opening, a political opening followed in 2000 with opposition parties assuming power. Now, a fourth phase is starting in which a more mature Mexico seeks to become more independent of the United States and international markets.

What’s next?

AMLO plans to increase public spending through public works, doubling of pensions, university grants and boosting rural incomes. He claims he can finance spending with an anticorruption drive and austerity on public officials, but commentators argue this will not generate the 10% of the federal budget needed for his plans. In foreign policy, increased confrontation with Trump will lead Mexico to look for alternative partnerships with the EU, China and Mercosur. The Mexican political system only allows for single term presidencies, but gives a president great power when he is in control. As such, AMLO will have the ability to chart a new course for the country.