Political Risk Rising in Mexico as Populist Lopez Obrador Looks Locked to Win Kenneth Rapoza - Forbes
go to original October 3, 2017

The president of the National Regeneration Movement (MORENA), Andres Manuel Lopez Obrador, speaks during a rally at the Revolution Monument in Mexico City (AFP/Pedro Pardo)

Update: Presidential Candidate Lopez Obrador's Potential Policy Promises Few Surprises (Stratfor)

It's still 8 months away, but the market is treating the July 1 elections in Mexico as a win for populist firebrand Andrés Manuel López Obrador, better known as AMLO. The peso is erasing the gains it's made since Trump was elected... after getting clobbered because Trump was elected. And now consensus is that the peso will weaken further. That's because political risk is about to kick into high gear this winter.

Everyone agrees that Mexico's institutions are strong and its central bank is predictable, meaning Wall Street will be able to gauge where the currency is going with or without AMLO. Moreover, the Finance Ministry is a fairly straight-forward conservative institution. AMLO could appoint a social welfare minded minister to the post, but the overall governing system is not expected to be changed too radically.

Word on the Street is that AMLO will be AMLO and not Hugo Chavez, the deceased socialist revolutionary of Venezuela (now a broken country), nor will he be like Luiz Inacio Lula da Silva, the ex-president of Brazil and labor union rabble-rouser who may yet go to prison for his involvement in the Petrobras contract rigging schemes there.

So who will AMLO be, and what is at stake in Mexico when he reveals it is still an unknown.

Next summer's general election includes seats in both houses of congress up for grabs, the exit of unpopular president Enrique Pena Nieto, as well as elections in 30 out of 32 states, including gubernatorial races. Unlike Brazil, where a candidate must win a clear majority (50%+ of the popular vote), Mexico's electoral system is based on a one shot, one round popular vote. Presidents can be elected with well under half the population voting for them.

Based on current polls, the probability of MORENA winning the election is about 40-55%. PAN and PRI have not announced a candidate yet. They trail MORENA by small margins. Each party polls in the 20%-range.

Read the rest at Forbes

Related: Will Mexico Go Down the Populist Route in 2018? (Modern Diplomacy)

Related: Could Collaborative Movement Ahora's Emilio Álvarez Icaza Be Mexico's Next President? (OZY)

Related: Looming Elections in Latin America Could Change the Political Map (Dallas News)

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