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Mexico’s president-elect Claudia Sheinbaum has vowed to press ahead with her party’s controversial plans to overhaul the judiciary by directly electing top judges, in comments that hit the peso late on Monday.
In her first news conference since her landslide win, Sheinbaum said discussion of the judicial reform would begin immediately, with a view to approving it in the first months of the new legislature, which convenes in September.
“There should be a broad discussion in these months so people get to know it,” she said at the National Palace after a lunch with outgoing president Andrés Manuel López Obrador, her political mentor.
Sheinbaum, a former Mexico City mayor, added that the reforms should be discussed broadly, including by university faculty, lawyers and justices.
But it wasn’t clear if the discussions would lead to changes to the plans, and her assurances did little to calm foreign exchange traders. The peso, one of the most liquid emerging market currencies, weakened almost 2 per cent to 18.58 a dollar following the press conference before paring some of its losses. The peso has shed close to 9 per cent against the dollar since Sheinbaum’s victory on June 2.
The election result had long been expected, but voters handed the ruling Morena party nearly the two-thirds majority needed to make constitutional amendments, unnerving markets and democracy activists who worry that the party’s planned reforms would remove critical checks on power.
Only one country, socialist Bolivia, currently elects supreme court judges, according to the Federal Judicial Center.
“Investors are looking for legal certainty,” said Carlos Serrano, chief economist at BBVA Mexico. “As long as we don’t know what the judicial reform looks like, there will be uncertainty and volatility.”
The reforms are the brainchild of López Obrador, a populist who considers his political project the country’s “fourth transformation”, on par with the country’s independence from Spain and revolution.
Other constitutional changes on the table include enshrining above-inflation minimum wage rises, a ban on genetically modified corn and eliminating independent sector regulators. Experts said several proposals could violate Mexico’s trade agreement with the US and Canada.
Sheinbaum backed the reforms on the campaign trail, alleging that supreme court justices had acted “politically” in the past and that the people should decide the composition on the bench.
But few observers had expected the ruling Morena party to get so close to a supermajority in Congress, and some expressed doubts over how committed Sheinbaum, a former climate academic, was to the reforms.
Sheinbaum said on Monday that the judicial reform would be part of a first wave of issues to be discussed in Congress, along with two of her own suggestions: banning re-election for public posts and a reform of teacher pensions.
She has promised to build the “second floor” of López Obrador’s project, which raised the minimum wage, increased social programmes and built mega-infrastructure projects. He also oversaw a centralisation of power in the presidency, deterioration in public healthcare and security.
López Obrador, who is limited to one term by Mexico’s constitution, struck a strident tone on Friday in response to investor jitters over the past week, saying: “Justice was more important than the markets.”
Additional reporting by William Sandlund in Hong Kong
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