Skip to content
2024-06-03t073838z-1101330630-rc2j38ahfp49-rtrmadp-3-mexico-election
Isabel ClavijoJun 3, 2024 5:31:23 PM5 min read

Claudia Sheinbaum, President 2024-2030: Challenges and Opportunities

Claudia Sheinbaum, President 2024-2030: Challenges and Opportunities
7:19

The electoral race for the presidency of Mexico in 2024 culminated on Sunday, June 2, with the victory of Claudia Sheinbaum Pardo, the candidate from Morena. The upcoming president of Mexico, her proposals, and their implementation will have a significant impact on the business and investment landscape in the country.

At PRODENSA, we understand that the 2024 presidential elections in Mexico represent a crucial moment for the future of business and investment in the country. In this edition, we analyze the main challenges and opportunities that both national and foreign companies will face in the coming six years.

 

Budgetary Challenges and Government Priorities

The presidential candidate faces a limited budget, which could affect the allocation of resources for priority projects such as Pemex and the Federal Electricity Commission (CFE). According to the Ministry of Finance and Public Credit (SHCP), in 2025 there will be a cut of 833.6645 billion pesos in programmable spending compared to the estimate for the current year. This situation poses challenges for infrastructure development and the attraction of investments in key sectors of the economy.

 

Additionally, the political and social uncertainty stemming from how Sheinbaum will manage the country in the coming years could influence companies' investment decisions, particularly in areas such as security and the rule of law, which are crucial factors for maintaining a stable business environment.

 

Security and Rule of Law: Urgent Priorities

The lack of security and legal certainty in Mexico has been a persistent obstacle to investments and economic growth, so the Morena candidate will need to address these challenges comprehensively, involving all relevant institutions.

 

According to the latest survey on the expectations of private sector economic specialists conducted by the Bank of Mexico, 55% of respondents indicated that governance is one of the factors hindering economic growth. Issues of public insecurity, corruption, and other problems related to the lack of rule of law were the most highlighted by experts.

 

Inter-institutional coordination and effective justice will be key to combating insecurity from multiple fronts. Likewise, the lack of personnel and resources makes processes in various agencies slower.

 

Attracting Investments and Trade Relations

One of the main objectives of the new government will be to attract foreign investment, especially in the context of the nearshoring phenomenon, where companies seek to relocate their operations closer to consumer markets.

 

It is worth noting that the Ministry of Economy revealed that in 2023, investment announcements amounted to over $110 billion, and in the first quarter of 2024, investment intentions were around $31 billion. These investments are planned for two to five years but are not yet confirmed.

 

Claudia Sheinbaum has expressed her interest in strengthening relations with the United States and Latin America, as well as developing the southern region of Mexico to attract investments. However, ensuring legal certainty and economic and political stability will be crucial to achieving this goal.

 

Infrastructure and Regional Challenges

In addition to security and legal certainty challenges, companies face specific challenges in different regions of the country. For instance, the north experiences water shortages, while other areas have insufficient electricity demand and inadequate road infrastructure.

 

In this context, the winning candidate will need to address these regional challenges and improve infrastructure, which is essential for facilitating business operations and attracting new investments.

 

Claudia Sheinbaum has repeatedly stated that she will promote the construction and maintenance of roads to leverage nearshoring, improve seaports, and build more airports. She will also emphasize the development hubs of the Interoceanic Corridor of the Isthmus of Tehuantepec.

 

Youth Participation and Citizen Expectations

A key factor to consider in the 2024 elections is the participation of the young population, whose influence on the results is significant. The winning candidate from the Sigamos Haciendo Historia coalition will need to pay greater attention to this segment of the population, addressing issues such as employment, education, and economic development.

 

Among her proposals are creating more high school-level educational institutions that match secondary schools. Additionally, she proposed establishing more universities in the country, using the ones created in Mexico City as a reference, to open up greater educational opportunities for young people.

 

According to the National Electoral Institute (INE) counselor, Norma De La Cruz, the Electoral Roll consists of over 98 million people, of which 25 million are young people between 18 and 29 years old.

 

There is a widespread expectation that the next government will follow a style similar to the current one. However, it will be crucial to maintain a balance between continuity and innovation to meet the changing needs of the country.

 

Foreign Trade and Global Issues

Foreign trade policies, such as tariffs and the review of the USMCA in 2026, will have a direct impact on investments and company clients in Mexico. The three countries that make up the North American trade bloc have begun preparing work meetings with business chambers.

 

In this context, the United States Trade Representative (USTR) recently stated that the review of the USMCA in 2026 will not be "comfortable" for Mexico and Canada. Addressing ongoing trade disputes, energy issues, and genetically modified corn will be a priority for the new government, with a view to the USMCA review.

 

Read more about Prodensa's analysis on the USMCA 2026 review here.

 

Additionally, global issues such as migration and the environment will need to be addressed in relation to operations in countries like China.

 

The new administration led by Claudia Sheinbaum will need to present clear strategies to strengthen international trade relations and responsibly and sustainably address global challenges.

 

Labor Reform and Oversight

In the labor field, debates on increasing the minimum wage and approving labor reform on working hours are expected to continue. These issues will have a direct impact on companies' operating costs and their competitiveness in the market.

 

Moreover, an increase in business oversight is anticipated, with more audits and consequences for those who do not pay taxes. The issue of Value Added Tax (VAT) refunds remains a challenge for many companies, so it is expected that the candidate will present proposals to improve this process.

 

The next government will face the arduous task of strengthening the rule of law, improving competitiveness, and promoting a favorable business environment while addressing regional and global challenges.

 

RELATED ARTICLES