"Concern in the Mexican private sector regarding AMLO's judicial reform"

Concerns about the judicial reform proposed by President Andrés Manuel López Obrador have left a considerable mark on the Mexican private sector, which is on high alert. The proposal to elect judges, ministers, and magistrates through popular vote has generated intense debate, not only in political circles but also in financial markets. Warning voices have emerged from multiple fronts, including investment banks, business leaders, and even the U.S. ambassador to Mexico, who are alerting about the potential impact on democracy and, consequently, the Mexican economy. The reform, which is expected to allow the popular election of up to 900 judges and magistrates starting next year, has raised fears about the future independence of the judiciary. The opposition has argued that this measure could place the judicial system under undue government influence, undermining the necessary separation of powers. This concern has led to modifications being included in the original proposal, such as the creation of an Evaluation Committee to filter candidates and a public lottery for the final selection, but doubts about the effectiveness of these measures persist. Luis Maizel, a Mexican investor based in the United States, has expressed his concerns emphatically. In his opinion, although filters have been implemented, government control over the candidate lists could render the popular vote irrelevant. Maizel has not hesitated to adjust his investments, selling Mexican debt bonds in an attempt to minimize risks ahead of the imminent approval of the reform in the new legislative cycle. The effect on the markets has been immediate. The Mexican peso has suffered a significant decline, losing more than 9% of its value against the dollar since the elections in June. This week, the currency devalued further, closing at 19.10 per dollar, leading analysts to predict a deterioration in the confidence of both national and foreign investors. The drop in the value of the peso has been seen as a sign that the investment climate is at risk, which could have repercussions for the economy as a whole. In parallel, several investment banks have issued reports warning that the judicial reform increases investment risk in Mexico. The most influential business organizations in the country have called on the National Electoral Institute to act to limit the power of Morena and its allies in Congress, arguing that the reform could threaten democracy and the rule of law. The concern is not only local; the UN has also expressed its disagreement, pointing out that the reform could undermine the independence of the judicial system. One of the most unexpected twists in this saga has been the change in stance of U.S. Ambassador Ken Salazar. Originally supportive of the popular election of judges, Salazar reconsidered his position, stating that this measure could pose a risk to Mexican democracy and the trade relationship between the two countries. The intervention of such a prominent figure has intensified international attention on the issue and added weight to the concerns of the private sector. Opinions on the reform are not unanimous. Some experts, like Damian Fraser, suggest that market pressure, along with internal and external political opposition, could moderate the final proposal. However, Fraser also warns that the president's intention to strengthen his control over the judiciary could have adverse effects on the investment climate. He and other analysts emphasize that the economic uncertainty generated by this reform could have serious consequences for Mexico's future as an investment destination. The context is not encouraging. Mexico is already facing significant economic challenges, including a high fiscal deficit and a slowdown in growth. In this sense, the judicial reform could be seen as an additional complicating factor in an already difficult landscape. Concerns about the management of resources in the government's flagship projects, such as the construction of a refinery and the Maya Train, add an extra layer of risk that investors must consider. Finally, Maizel emphasizes that abuse of power is a dangerous phenomenon. The consolidation of the ruling party's control over Congress, the presidency, and potentially the judiciary could lead to decisions being made without the necessary debate or participation from different sectors of society. For the investor, certainty and stability are fundamental. The fear that the country could be transformed by decree, without the necessary democratic discussion, is a real concern that could drive away investors seeking security and transparency in their decisions. In an environment where decisions are made behind closed doors, trust erodes, and Mexico's economic future could be at stake.