How Judicial Reforms Could (or Couldn’t) Impact Mexico

If you’ve been following the news about Mexico, then odds are you encountered two great topics. On the one hand, the start of Claudia Sheinbaum’s tenure as Mexican president—the first woman to ever hold the position. A theme that has been submerged with great debate as to whether Sheinbaum—a former academic with a PhD in renewable energy—will make her own path in the nation’s chief executive or will follow on a path set forth by her party, Morena (more on Politico). On the other, and quite conversely, the country has been engulfed by a series of reforms pushed by current President Andrés Manuel López Obrador in his last month in office. Chief amongst them, an ambitious reform to Mexico’s justice system (more on the New York Times).

Much like that, the nation is now suspended between the last acts of President López Obrador, and a broad uncertainty as to Sheinbaum’s first steps.

At ConteNido, we’ve already covered Sheinbaum’s triumph and cabinet picks extensively (read more at ConteNido). So this week, we wanted to cover the other topic that has engulfed mexican media for months. Namely, President López Obrador’s reforms. And, more specifically, the one reform that is on top of everybody’s mind: the rise of Mexico’s new judiciary system. Most importantly, understanding its potential impact to Mexico beyond speculation and doom calling.

Let’s start with the basics. What 's going on?

During the last stretch of his Presidency, Andrés Manuel López Obrador found himself in an odd scenario. Due to a change in electoral calendars, the current president had a one month overlap with the nation’s new Congress—a Congress in which his party, Morena, had gained an ample majority (more on CNN). In that period, he decided to use that power to reform the nation’s justice system—which, quite likely, has been the greatest source of tension for his administration.

Why the judiciary? Well, in great part because it is the culmination of multiple long held battles (some ideological, some more pragmatic). For years, President López Obrador has engaged in a series of attempts to reform Mexico’s judicial system, mostly in an effort to eliminate “privileges” held by the nation's Supreme Court. Arguably the first tension came when the López Obrador administration tried to cap the salaries of all public servants to be below that of the president—a decision the Supreme Court opposed and was able to avoid in the aftermath of reform (more on El Financiero). Throughout his administration, President López Obrador encountered great pushback from Mexico’s Supreme Court when attempting to reform mining regulation and the country’s non-partisan electoral authority (more on El Universal and El País). All these tensions culminated in the surprising removal of federal budget assigned to the Supreme Court and the first signs of the reforms to come (more on El País).

So it's not a surprise that president López Obrador chose to reform the Judicial system. However, the sheer scope of his reform did come as a shock to many. Instead of focusing on issues around due process or the large inefficiencies in Mexico’s judiciary—some 39% of people currently in prison in Mexico are held without an official ruling against them—; instead of pointing reform efforts to these topics, the current administration chose to embark on an ambitious plan to change how judges are elected in Mexico in the first place (more on El Economista).

Generally speaking, the judicial reform—which was approved earlier this month—sought to make the country’s justice system the first in the world to choose all judges by votes. That is, starting in 2025, all judges in Mexico—from the Supreme Court down to district judges—will be elected in public elections, similar to how some US states chose their Supreme Court Justices (more on Milenio). There are some other changes brought forth by the reform, including a key changer to how judges will be investigated for misconduct, and the creation of “anonymous” judges for certain cases—as to protect judges from further persecution. But, by and large, the main topic of the reform was to make judges, once career public servants, into publicly-elected officials.

What does this mean for Mexico?

Before the reform was approved earlier this month, there was much doom calling about what its potential impact would be to Mexico. Many argued it would scare investment away from the country and cause an economic debacle even before Sheinabum came into office (more in Expansion). And one can at least see the reasoning behind these claims. Afterall, if the judiciary were to become subject to popular demand, and political actors became involved in the process, the nation’s justice could easily become prey to blatant corruption. Not to mention that, as the reform states, all judges will be forced to rescind their positions in 2025, which will likely give Morena-favored judged a boost given the immense popularity of both Claudia Sheinbaum and Andrés Manuel López Obrador (more on El País).

So, is this the end of Mexico? Not really. Such arguments tend to forget that Mexico’s justice system is already plagued with problems—and, despite them, investments have still flocked to the country. The country’s justice system as it stands today is already highly inefficient and corrupt, with only 1% of all crimes ever reaching a judicial resolution (more on Impunidad Cero). If the reform were to impact the administration of justice in Mexico, it is worth noting that the bar—at least when it comes to district judges—seems to be quite low.

Not to mention that the reform wouldn’t come into effect until 2025, likely postponing any serious skepticism until the first nation-wide election of judges.

In fact, some early signs do suggest that, even with such drastic political maneuvers, Mexico’s economy remains strong. Since its approval, the country’s currency has remained stable and even the nation’s stock exchange has risen from little above 50,900 pts to well close to 53,000 pts (more on BMV and Bloomberg). And even Mexico’s Secretary of Economics, Raquel Buenrostro, announced that no foreign company had stopped investment projects in the country since the reforms were passed (more on El Economista).

It is still very early to tell what this reform will do to Mexico. But early doom callings have failed to manifest into a sudden economic collapse. If anything, international markets seem to be waiting to see what will happen in months to come as Sheinbaum takes office. And, most importantly, who will be her counterpart in the US come November.?

Much remains to be seen. For now, Mexico is settling into new political realities while keeping an initial optimism in the business realm.

Written by José Luis S.