Georgetown Americas Institute

Claudia Sheinbaum—the political heir of Andrés Manuel López Obrador (known to many as AMLO)—was sworn in as Mexico’s president on October 1. Following the impressive results her party achieved in the June election—in which Sheinbaum won 60 percent of the votes, the largest share in almost 40 years—it seems likely that her administration will attempt to replicate AMLO’s economic formula for another six years. Sheinbaum’s implicit mandate is to continue to support the “Fourth Transformation,” AMLO’s term for his sweeping agenda of regime change. Central to this agenda is an economic strategy built on stability, redistribution, and increased government participation in the economy.

On June 28, after several weeks of pressure in currency and bond markets, Luis Caputo, Argentina’s finance minister, uttered the words heard time and again in Latin America from many of his predecessors — I will not devalue. In 1981, José López Portillo, Mexico’s then president, made his famous claim that he was going to defend the Mexican peso like a dog. What followed was the start of Latin America’s debt crisis and lost decade.