Mexico judicial reform poses major risks

Significance

Her win was based on numerous campaign proposals, including a controversial plan for judicial reform, originally presented to Congress by incumbent President Andres Manuel Lopez Obrador (AMLO). The uncertainty surrounding the possible effects of this reform, which could compromise judicial independence, has raised concerns among investors and financial markets.

Impacts

• Strike action by judges and other judiciary personnel will endure, potentially hindering reform implementation.
• Investors may delay investments, pending details on the implementation and potential effects of the reform.
• As the reform's impacts are assessed, investors might opt for other methods of dispute resolution, such as arbitration.
• A proposed tightening of limits on the pay of justices, magistrates and judges may bolster general public support for the reform.