ELECTION 2018 PRESIDENTIAL ELECTION

Andrés Manuel López Obrador is the virtual winner of the Presidential election. This situation would respond to a candidate that was able to capitalize on the high social discontent and an 18 year political effort. The AMLO effect is reflected at the national level, since the Coalition that he leads will obtain different strategic positions, such as the Head of Government of City, 4 governorships, majority in the Federal Congress, majority in more than 15 local congresses, among other local posts.

This electoral process will result in a substantial change in the national political order. ELECTION 2018 PRESIDENCY

NDRÉS ANUEL ÓPEZ BRADOR RESULTS A M L O President-Elect virtual November 13, 1953 (64 years). BA in Political Science and from the National Autonomous University of Mexico (UNAM). Founder of the National Regeneration Movement () party and 53.1% virtual candidate elected to the Presidency by the Coalition , formed by MORENA, the Labor Party (PT) and the Social Encounter Party (PES). He was a presidential candidate in the 2006 and 2012 elections.

Before founding of MORENA (2014) he served as President of the Democratic Total votes: 30, 113, 483 Revolution Party (PRD) from 1996 to 1999. He was elected as Head of Andrés Manuel López Obrador Government of from 2000 to 2005, obtaining 37.5% of the votes Juntos Haremos Historia in the elections against 24.5% of the second place (Santiago Creel - PAN). His 63.4% administration was distinguished by the construction of the second floor of PARTICIPATION the Periférico (the most important road in the city); the expansion of social programs aimed for single mothers; students, unemployed, rural producers, micro-entrepreneurs, senior-citizens and people with disabilities.

Some social rights were inserted into the Law, among them, the Universal 53.1 Alimony Pension for Older Adults, the delivery of school supplies to students of public basic education, the Support Program for Persons with Disabilities 30,113,483 and Comprehensive Care for Single Mothers. The Medical Care and Free Medicines Program is worth noting, ever since 725 families, who did not have social security, were given access to health services. In addition, the Autonomous University of Mexico City was founded.

22.2 The management of Mr. López Obrador of Mexico’s City finances obtained 16.4 the maximum positive rating of triple A (Fitch, Moody's and Standard & 12,610,471 Poors). 9, 289, 853 5.2 Since the beginning of the 2018 electoral process, he remained at front of all 2,961,732 the electoral polls. The reason is that he was the only candidate who managed to yield the high social discontent, condition that was reflected in a historical AMLO ANAYA MEADE BRONCO participation of voters in his favor. ELECTION 2018 PRESIDENCY

GOVERNMENT PROPOSALS

During his campaign, Andrés Manuel López Obrador presented his Project of Nation 2018-2024, in which, his main proposals to address the main issues of the country are detailed.

GOVERNMENT AND POLITICS EDUCATION, VALUES, CULTURE AND SCIENCE Turn the State into a promoter of the political, economic and social Review the Educational Reform. development of the country. Republican Austerity that complements the fight against Education for everyone; gratuity at all educational levels. corruption, as main axes of the nation’s project. Assure admission to every citizen who desires university education. True and efficient open government; Reform the Constitution in order to expand the scope of popular demands. Inclusive education plan in coordination with: teachers, parents and Reduce the size of the federal administration without sacrificing the pedagogues. quality of government.

ECONOMY AND DEVELOPMENT SECURITY

Zero debt policy. Create the Ministry of Public Security and remove the attributions from the Ministry of the Interior. Reduce income tax to 20% in the border area. Public Prosecutors Professionalization. Autonomy of the Bank of Mexico and macroeconomic equilibrium. The security cabinet will be integrated by the Attorney General's Reorient public spending. Office and the Ministry of the Interior, National Defense and the Navy. Tax Policy 2019-2024; not increase nor create new taxes in order to generate macroeconomic stability, with balanced public finances. Establish a single police command with 32 state corporations ELECTION 2018 PRESIDENCY

GOVERNMENT PROPOSALS

HEALTH SUSTAINABILITY Strengthen and expand the public health system (IMSS, ISSSTE, Enactment of a General Water Law establishing the resource as a SSA). human right. Free access to health services and medicines for population without National program for climate change adaptation. social security. Conservation through the sustainable use of biodiversity. Public policies for national production and procurement of Development of renewable energy sources; hydroelectric, solar and medicines and vaccines as a national security issue. tidal plants. Promote the national production of medicines. Development of indigenous communities by conserving their natural heritage.

FOREIGN AFFAIRS SOCIAL DEVELOPMENT

Multilateral Foreign Policy; create a new dialogue with North State Social Policy: Address poverty firstly by ensuring income and America, maintaining cooperation for development. skills development.

International collaboration for the fight against tax havens. Annually attend 2.6 million young citizens living in vulnerable situations. Promote the integral development of the areas with the highest migration rates. Incorporate physical activity into the citizenship.

Sign an "Alliance for Progress" with Canada, the US and Central Scholarships to young citizen that do not study nor work. American countries in order to boost employment. ELECTION 2018 PRESIDENCY

TRANSITION TEAM

Andrés Manuel López Obrador announced the team that will be in coordination with the current Federal Government for a orderly transition process. Among other issues, the Transition Team would be in charge of designing the 2019 Economic Package (budget and income).

Economic Policy Internal Affairs

Carlos Manuel Urzúa Macías Olga Sánchez Cordero

Alfonso Romo Garza

Tatiana Clouthier Gerardo Esquivel

Arturo Herrera Gutiérrez Media

César Yañez Centeno Cabrera External Affairs

Héctor Vasconcelos NAFTA Negotiator

Jesus Seade Kuri Casaubón ELECTION 2018 PRESIDENCY Alfonso Romo Garza Businessman in the area of genetic and transgenic experimentation. His previous projects such as: Grupo Pulsar, Savia, Seminis, Tabamex y Grupo Monterrey, allowed him to came up with Synthetic Genomics, a company in INNER CIRCLE charge of transplant research. He worked with the PAN candidates and Felipe Calderón, in 2011 he announced his support to López Obrador and later became the General Coordinator of his Nation Project 2018 – 2024.

Alejandro Esquer Verdugo

Gabriel García Hernández Private secretary of AMLO when he was PRD’s General Secretary of MORENA. He worked in the National President and Head of Government of Government of Mexico City with AMLO, as Mexico City. Director of Acquisitions in the Administrative Office.

Marcelo Ebrard Andrés Manuel López Beltran He started his political career within the PRI under the leadership of Manuel Camacho Son of Andrés Manuel; BA in Political Solís. He was a Federal Congressman for the Sciences and Public Administration PVEM and candidate for the Head of from UNAM. He is in charge of forming Government in 2000 for the Democratic 5,600 sectional committees. Center Party, however he declined in favor of AMLO. He served as Head of Government, Minister of Local Security and Minister of Social Development. As Head of Government of Mexico City he had an acceptance level of 80%. President of the National Chamber of the Transformation Industry (CANACINTRA) in 2002. She served as a member of the board of directors of Nacional Financiera (Nafin), the Bank of Foreign Trade (Bancomext) and as Senator of in the LX and LXI Legislatures. Currently, she is President of the National Regeneration Movement Party Cesar Yañez Centeno Cabrera (MORENA). He was the Social Communication Director during Tatiana Clouthier López Obrador’s government in Mexico City. Since Daughter of Manuel Clouthier, presidential candidate of PAN 1988. then he has been in charge of coordinating the She has been a Federal Congresswoman, candidate for the press and he serves as a spokesperson of MORENA. Municipal Presidency of San Pedro Garza García, NL. She was AMLO’s campaign coordinator. ELECTION 2018 PRESIDENCY

PROPOSED CABINET Jorge Alcocer Varela Health Víctor Villalobos María Luisa Albores Agriculture Social Development

Alejandra Fausto Guerrero Marcelo Ebrad Culture Foreign Affairs

Germán Martínez Cázares Carlos Manuel Urzúa Social Security Finance & Public Credit

Guillermo Meyer Falcón Graciela Márquez Colin Urban Development Economy

María Elena Álvarez Buylla Olga Sánchez Cordero Science and Technology Interior

Esteban Moctezuma Javier Jiménez Espriú Education Communications & Transportation Josefa González Blanco Security Environment Irma Sandoval Ballesteros Transparency Luisa María Alcalde Miguel Ángel Torruco Labor Jesús Seade Kuri Tourism NAFTA Negotiator 8 ELECTION 2018 PRESIDENCY

KEY DATES

July 1st August September October December

3 Deadline for the court to 1 LXIV Legislature’s 8 Deadline for parties to 1 Presidential inauguration. resolve the dispute trials Installation submit to the INE their related to representatives report of campaign 6 Deadline for the court to expenses. Federal Elections and senators election 15 2019 Economic Package validate the presidential 2018 September 15 – October presentation election. 15. Integration of 23 Deadline to grant Committees in Congress certificates to elected 31 2019 Economic Package federal representatives approval and senators

31 Deadline for the court to solve the dispute trials related to the presidential election

Transition process

1 February The President presents the National Public Security Strategy to the Senate.

28 February The President will send the National Development Plan to the House of Representatives for their approval. His deadline is the last 2019 business day in February. ELECTION 2018 PRESIDENCY

SCENARIOS AND CONSIDERATIONS

Mexico is experiencing a crisis of confidence and legitimacy towards the political class and government institutions. The levels of corruption, impunity and weak rule of law are the main problems that the new Administration must address. Political

The projected victory of Andrés Manuel López Obrador has generated uncertainty regarding how he will govern; hence, he has the challenge of demonstrating the political viability of his project. Among the main questions around AMLO, is the feasibility of including different political forces into his government, as a means in order to generate trust in various sectors of society, including the economic agents.

Potential style of Government:

Govern through executive orders (decrees), in case of not reaching consensus.

Use of public consultations on politicized issues about government actions.

Revocation of mandate in the middle of the presidential term; it could provoke political instability, in a context of social polarization. ELECTION 2018 PRESIDENCY

SCENARIOS AND CONSIDERATIONS

In the context of low economic growth, high inflation, and international economic pressure (exchange rate and US

Economic interest rates), the new federal government must reinforce the country’s economic policy, generating the necessary conditions that allow the country to attract greater investment and overall, become a better commercial destination.

According to the Mexican Central Bank (BANXICO), the victory of AMLO will have no significant economic effects in the markets, or in the currency. The economic impact will depend on the message of the transition team regarding macroeconomic policy.

Potential style of Government:

The Economic Package is expected to have significant adjustments (focus on improving governmental expenditure), seeking to ensure the proper functioning of government actions.

The structural reforms could have a slow implementation. Fitch Ratings considers a slower implementation of the energy reform; and a greater state intervention in the market and a potential increase in public spending.

Regarding trade, it is expected that AMLO’s government will seek continuity of NAFTA and to continue the country’s diversification policy. The agro-food sector can become a turning point in the negotiations, due to MORENA’s position on food sovereignty. ELECTION 2018 PRESIDENCY

SCENARIOS AND CONSIDERATIONS

The economic model of the country has not been sufficiently inclusive to achieve better living conditions. The Mexican

Social society faces important challenges such as insecurity, social decomposition and polarization of political positions. The social priorities are: education, health services, more and better job opportunities and poverty reduction.

The administration of AMLO is expected prioritize social policy over economic seeking to favor the most disadvantaged sectors. However, in order to do so, it must address the possible social division that derives from the electoral process.

Potential style of Government:

Comprehensive policy for the development of vulnerable sector in the south-southeast region.

Audit and supervision of administrative processes for social programs.

Potential Increase of social discontent in case of lack of results of the campaign proposals.

Surveillance in the exercise of public resources and government actions by civil society organizations. ELECTION FEDERAL CONGRESS The next President will not need to negotiate to approve secondary reforms since MORENA obtains a majority in both Houses of Congress, since its alliance with the Labor (PT) and Social Encounter (PES) parties adds to a simple majority, condition that will facilitate the 2019 Economic Package and other reforms presented by the Executive. However, the coalition cannot approve Constitutional reforms by itself.

The AMLO effect was also reflected in the integration of the Congress, element that in turn impeded several independent candidates of achieving a seat in the next Legislature.

There are national priorities in the public agenda that MORENA should attend from the Congress. The opposition will have little margin to make counterweights and position its agenda. ELECTION 2018 FEDERAL CONGRESS

House of Representatives Current integration Integration (2015-2018) (2018-2021)

204 47

108 83

53 21

47 185

38 62 16 21 29 12 2 12 55 OTROS 5

* The graphics represent the current seats, highlighting the actors that changed parliamentary group 302 133 65 ELECTION 2018 FEDERAL CONGRESS

Senate

Integration Current integration (2018-2021) (2015-2018) 14

55 23

34 56 5 19 8 6

6 5 6 OTROS 9 8

2 Coalitions

* The graphics represent the current seats, highlighting the actors that changed parliamentary group 69 37 22 ELECTION 2018 CONGRESS

Possible strategic alliances to obtain majority:

HOUSE OF SENATE REPRESENTATIVES Constitutional Qualified Majority: 334 votes Reforms Qualified Majority: 85 votes

435 106 349 88 367

Secondary Secondary Absolute Majority: 251 votes Absolute Majority: 65 votes Legislations Legislations

302 69 ELECTION 2018 FEDERAL CONGRESS

KEY DATES

August September October December

3 Deadline for the court 1 Beginning of the First 15 Deadline for the 31 Conclusion of the to resolve the Ordinary Period of the conformation of First Ordinary Period of nonconformity trials LXIV Legislature of the Legislative Committees in the LXIV Legislature of related to the election of Federal Congress. the Congress the Federal Congress**. representatives and 1 Date established for Senators the President to send 23 Deadline to grant Preferential Bills to the certificates to senators Federal Congress*. and elected federal representatives

*According to Article 71 of the Constitution, on the inauguration day of each ordinary session, the President may present up to two bills for preferential processing. Each bill must be discussed and voted by the Floor of its Chamber of Origin within a maximum period of thirty calendar days.

**According to Article 66 of the Constitution, due to the presidential election, Congress may extend the Ordinary Period until December 31st of that same year, that being the deadline for approval of the 2019 Economic Package. STATE ELECTIONS

At the state level, the trends indicate a substantial change in the balance of power in the governorships. It is worth noting the rise of MORENA in most of the States, as well as the case of Citizen Movement Party (MC) in Jalisco. It can be noted that the ‘punishment’ vote is also reflected in the local elections.

One of the most relevant findings is that, according to results in 5 entities, MORENA candidates obtained more than 40% of the vote in their favor, this occurs in a context of social bitterness and will force greater commitment in government action.

The political map would be modified in the 32 states, which were historically governed mostly by the PRI and the PAN. ELECTION 2018 GOVERNORS

INTRODUCTION In addition to the presidential elections and for the renewal of the Federal Congress, midterm elections were held in 30 entities of the country, in which 8 Governors, 28 Local Congresses, 1,596 City Councils, 16 City Halls and the Head of Government of Mexico City will be renewed.

8 1 8 Governors in: Head of • Governors Government, • Guanajuato Mexico City • Jalisco 387 Local 585 Local • Representatives • Puebla (Proportional Deputies Representation) (Relative Majority) • • • Yucatán 16 1596 Town Halls Municipalities Mexico City

This electoral process was characterized by the introduction of the reelection. Depending on the State, local representatives may be re-elected for four or two consecutive terms, which is equivalent to twelve and six years in office, respectively. The members of the City Councils: Municipal Presidents and Trustees, may be re-elected for an additional period only.

Re-election for up to four periods: 4 consecutive • • Nayarit Re-election for up to two periods: 2 consecutive periods • Baja California Sur • Nuevo León • • Puebla • Aguascalientes • Chiapas • Querétaro • Chihuahua • Coahuila • San Luis Potosí • Colima • Ciudad de México • Sinaloa • Hidalgo • Durango • • Oaxaca • Guanajuato • Tabasco • • Guerrero • Tlaxcala • • Jalisco • Veracruz • • Estado de México • Yucatán • Michoacán • Morelos ELECTION 2018 GOVERNORS

ELECTED CANDIDATES 47%

CDMX Pardo

43.7% Cuitláhuac García Jiménez VERACRUZ

Enrique Alfaro Ramírez 39.03% JALISCO 64.45% Adán A. López Hernández TABASCO

39.1% Sinhué Rodríguez Vallejo 49..48% YUCATÁN GUANAJUATO

38.04% 52.45% PUEBLA MORELOS 39.84% Rutilio Escandón Cadenas Cuauhtémoc Blanco Bravo CHIAPAS Martha Erika Alonso ELECTION 2018 GOVERNORS

POLITICAL MAP (LOCAL GOVERNMENT REDISTRIBUTION) Political Map 2018 Current Political Map

According to the election results, the distribution of local governments will be as follows:

Party 2015 2018 Dif. 14 12 -2 States in which will be transition in the party Currently, the States’ Governments are distributed among the occupying the Governorship: following political forces: 8 6* -2 CDMX 0 5 +5 CHIAPAS 14 1 1 4 5 +1 MORELOS JALISCO 4 1 -3 4 8 TABASCO 4 0 1 +1 VERACRUZ

1 0 -1 YUCATÁN 0 1 +1 The party continues in the government in the States of PUEBLA (PAN) and GUANAJUATO (PAN) Ind 1 1 = ELECTION 2018 LOCAL CONGRESSES

LOCAL CONGRESSES (ONLY RELATIVE MAJORITY)

Party 2018 Election

19 4 1 1 Divided 2

Preliminary data show a favorable trend for the The coalition formed by PAN, PRD • The PRI, PVEM, PANAL Coalition only manages coalition of MORENA, PES and PT, who would and MC would be the first to be the first force in the Yucatan. become the first political force: political force in: • Campeche is divided between MORENA and • Baja California Sur • Oaxaca • Aguascalientes PRI and Chihuahua is divided between • Chiapas • Puebla • Guanajuato MORENA and PAN; PRD, MC Coalition. • Ciudad de México • San Luis Potosí • Jalisco • • Colima • Sinaloa • Querétaro PAN manages to be the first force in Nuevo • Durango • Sonora León. • Estado de México • Tabasco • Guerrero • Tlaxcala • Hidalgo • Veracruz • Michoacán • Zacatecas • Morelos