Claudia Sheinbaum's Historic Presidency: A New Era for Mexico's Left and the Fourth Transformation

Claudia Sheinbaum's victory in the Mexican presidential election on 2 June 2024 represents a significant milestone for left-wing parties in Mexico. Winning by a substantial margin of nearly 60% of the vote, Sheinbaum has made history as the first female president of Mexico and a central figure in the Fourth Transformation, a term popularised by her predecessor, former President Andrés Manuel López Obrador (AMLO). This transformation reflects a profound shift in Mexico's political and economic landscape, with Sheinbaum's triumph marking a pivotal moment in the ascendancy of the left.

Sheinbaum's background is notable in the context of Mexican politics. Unlike many of her peers, she comes from a working-class background and holds a PhD in engineering. Her previous role as governor of Mexico City showcased her leadership abilities and set the stage for her presidential bid. While her victory is undoubtedly significant in terms of gender, it also signals the continued decline of right-wing dominance in Mexico and the consolidation of leftist power. This political shift began with AMLO's victory in the 2018 elections when he led the National Regeneration Movement (MORENA) to prominence. Despite its relatively recent formation in 2014, MORENA has emerged as a formidable force, challenging established parties like the Institutional Revolutionary Party (PRI) and the National Action Party (PAN).

Sheinbaum, a MORENA representative and AMLO's unofficial successor, is now tasked with continuing the Fourth Transformation, a concept rooted in Mexico's history of profound societal changes. The Fourth Transformation follows three other pivotal events in Mexican history: the War of Independence (1810–1821), the Reform War (1858–1861), and the Mexican Revolution (1910–1917). This latest transformation reflects the rise of the left and the corresponding decline of right-wing influence in both society and government. While Sheinbaum builds on AMLO's legacy, she is also carving out her own path, with a strong focus on environmental policies and social reforms aimed at addressing Mexico's long-standing economic challenges.

Sheinbaum's presidency is expected to have significant geopolitical implications. She is known for her commitment to environmental causes, and the Green Party of Mexico was a crucial ally in her 2024 campaign. During her tenure as governor of Mexico City, she oversaw a significant increase in the use of electric vehicles, a trend she is likely to expand nationwide. Her scientific background informs her dedication to reducing carbon emissions, and she is poised to strengthen Mexico's ties to global green initiatives. Entrepreneurs can expect a surge in investments in Mexico's green sector as a result of this shift in governance.

On the international stage, Sheinbaum has articulated a position of neutrality in the ongoing "contemporary Cold War" between the United States and the China-Russia alliance. Her stance aligns with the Estrada Doctrine, advocating for cooperation with all major powers without submitting to the dominance of any single one. As a key trade partner and regional neighbour of the United States, Mexico will continue to engage with both American and Chinese interests, particularly in the area of eco-friendly technology.

Domestically, Sheinbaum faces considerable economic challenges, including a budget deficit that will require new sources of revenue to fund the extensive social programmes she has pledged to expand as part of the Fourth Transformation. MORENA is likely to pursue a mix of business-friendly reforms and enhanced trade relationships with the United States, particularly through the United States-Mexico-Canada Agreement (USMCA). Sheinbaum is expected to prioritise nearshoring, the strategy of relocating supply chains to geographically closer and more politically aligned countries, to boost Mexico's economy. As the United States seeks to reduce its reliance on Chinese manufacturing, Mexico stands to benefit from increased trade and investment. At the same time, Sheinbaum has expressed scepticism towards private and foreign investments in Mexico's oil industry, and she has vowed to expand the operations of the state-owned oil company, Pemex.

Sheinbaum's election is also a cultural landmark in a country often associated with machismo. Her victory signals a shift in gender perceptions in Mexico, as the nation places its trust in a woman to lead. Beyond being a political triumph, Sheinbaum's presidency symbolises a new era in Mexico, where leadership is increasingly defined by a commitment to scientific expertise, social justice, and environmental sustainability. Sheinbaum is well-positioned to guide Mexico through the Fourth Transformation, attract international investments, particularly in the green economy, and set a precedent for future leadership in the country. Her presidency has the potential to redefine Mexico's role on the global stage, advancing both progressive politics and sustainable development.

Claudia Sheinbaum's presidency is expected to have considerable implications for businesses operating in Mexico. Her administration's focus on environmental sustainability and social reform is likely to create new opportunities in sectors aligned with these priorities. Companies involved in green technology, renewable energy, and sustainable agriculture are likely to benefit from increased government support and investment. Her commitment to reducing carbon emissions and promoting eco-friendly technologies could attract both domestic and international investment in Mexico's green economy, fostering innovation and job creation.

However, businesses in traditional energy sectors, particularly those involved in oil and gas, may face challenges due to Sheinbaum's scepticism towards private and foreign investments in Mexico's oil industry. The expansion of Pemex's operations under state control could limit opportunities for private companies in this sector, prompting them to reconsider their strategies and potentially shift their focus towards renewable energy projects.

Furthermore, Sheinbaum's emphasis on nearshoring presents opportunities for businesses to capitalise on Mexico's strategic location and its growing role as a manufacturing hub for the United States market. Companies involved in manufacturing, logistics, and supply chain management may see increased demand as more businesses relocate production closer to North American markets. This shift could also stimulate growth in related industries, such as transportation, warehousing, and infrastructure development.

Nevertheless, businesses will need to navigate the complexities of Sheinbaum's economic policies, particularly in terms of taxation and regulation, as her administration seeks new revenue sources to fund its social programmes. Companies should also be mindful of the potential for increased scrutiny on environmental and labour practices, as Sheinbaum's government is likely to enforce stricter standards in these areas.

While Claudia Sheinbaum's presidency offers significant opportunities for businesses in sectors aligned with her administration's priorities, it also presents challenges, particularly for those in traditional industries. Companies that can adapt to the evolving political and economic landscape in Mexico will be well-positioned to thrive under her leadership.