Weekly Geopolitical Report – The Return of AMLO (July 9, 2018)

by Thomas Wash

On July 1, Andres Manuel Lopez Obrador, or AMLO for short, became Mexico’s first leftist president in over three decades,[1] running on anti-establishment and anti-corruption platforms. The 64-year-old activist won with over 53% of the vote, the most since Mexico moved to a multi-party system.  For the first time in nearly a century, Mexico elected a president who did not belong to either of the two traditional parties, PRI or PAN. Furthermore, his political party, the National Regeneration Movement (MORENA), was also victorious, winning the majority in both the Senate and the Chamber of Deputies. As a result, AMLO will be the most powerful Mexican president since the PAN party ended PRI’s 70-year rule in 2000.

AMLO, who had run for president twice before, overcame stiff opposition from establishment candidates in the PRI and PAN parties. Since winning the presidency, AMLO has promised to balance the government budget, lower the crime rate and negotiate with the Trump administration on immigration and trade. His victory has caused market uncertainty as many people are not sure how he will handle Mexico’s relationship with the United States. The U.S. and Mexico have been re-negotiating NAFTA since last August and are expected to resume negotiations again next year. In addition, the U.S. and Mexico are still trying to find a solution to the immigration problem. In this report, we will examine how and why AMLO was so successful, briefly describe his history and then discuss how he might run his government. As usual, we will conclude with possible market ramifications.

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[1] The last leftist Mexican president was Miguel de la Madrid, who presided from 1982 to 1988.