ASSESSMENTS

In Mexico, a President’s Populist Agenda Puts Investors in Its Crosshairs

Mar 21, 2019 | 09:00 GMT

Mexican President Andres Manuel Lopez Obrador discusses his first 100 days in office in Mexico City on March 11, 2019.

Mexican President Andres Manuel Lopez Obrador's populist promises will collide with the interests of foreign and domestic companies, which until now have regarded Mexico as a relatively low-risk Latin American destination for investment.

(PEDRO PARDO/AFP/Getty Images)

Highlights

In the coming years, some private investors in Mexico will fall victim to President Andres Manuel Lopez Obrador’s push to make good on his populist campaign promises.
These promises include a proposed constitutional reform that would allow legally-binding public votes on projects in the private sector.
If approved, projects in the energy, mining and construction sectors will be most at risk for being thwarted by popular referendums.
The amendment would also open the door to referendums for deeper political reforms, such as a vote on presidential term limits or other government policies.

For the first time in several decades, Mexico’s ruling government now poses an increasing threat to foreign investment -- largely due to its leader's desire to channel the populist anger that got him elected into policies. As a newly elected populist leader with a considerable political mandate, President Andres Manuel Lopez Obrador (who's widely known by the nickname AMLO), is armed with enough personal motive, power and popular support to frequently antagonize the private sector in the coming years. But the president's coalition also intends to cement deep legislative changes that would make Mexico a riskier place for business for much longer than a six-year presidential term....

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