López Obrador and the Fourth Transformation

In part three of our series on Mexican President AMLO, we will review some of the achievements and challenges he faced throughout his presidential administration.

October 06, 2024 by Pablo Meriguet
Mexican President Andrés Manuel López Obrador. Photo: AMLO / X

This piece is part three in a series about former Mexican President Andrés Manuel López Obrador (AMLO) who finished his term in office on September 30, 2024. AMLO made history by leaving office with a record 80% approval rating largely attributed to his efforts of poverty reduction and wealth redistribution. Part one of the series reflects on his beginnings in politics and part two was on his long struggle to be elected preisdent. This piece will reflect on his term in office and his some of his major initiatives.

In his last campaign speech days before the 2018 elections, AMLO outlined basic points for his proposal to lead a “Fourth Transformation” of Mexico to fully do away with the corrupt regime of injustice and privileges which had characterized the previous governments.

After winning the presidential elections, he began to implement this program coloquially referred to as the “4T” declaring that his political project would mean a change as powerful as the Independence, the Reform War, and the Mexican Revolution. However, the one headed by his government would be, according to AMLO, the only peaceful transformation of the great transformations. To this end, he attempted to carry out a relatively austere government in economic matters, a large investment in social programs, an increase in the minimum wage, and the legal transformation of the constitution.

Decrease in poverty and increase in the minimum wage

The significant investment in social programs helped to substantially decrease poverty in Mexico; from 253 billion pesos invested in public social policies in 2019, the amount increased to 741 billion pesos by 2024. According to the World Bank, in 2020, 43.9% of Mexicans were poor, while in 2022 this percentage was reduced to 36.3%. The same World Bank confirmed that during AMLO’s administration, 9.5 million Mexicans were lifted out of poverty.

The increase in the minimum wage was one of the key contributing factors as it allowed tens of millions of Mexicans to see an increase in their income every month. In 2018 the minimum wage was 88.36 pesos a day (USD 4.5), while by 2024 the minimum wage has almost doubled: 207.44 pesos a day (something like USD 10 per working day.). It should also be considered that the unemployment rate decreased, reaching 2.4% in 2024 according to AMLO.

Republican austerity

AMLO was also characterized for being a ruler who went to great lengths not to alter the balance of public finances. According to his policy of “republican austerity”, the president wanted to keep macroeconomic data in order. Hence, during AMLO’s six-year term, there was no significant devaluation of the peso, as was the case in previous administrations. This allowed the Mexican peso to become a relatively stable currency and the second currency in the world that has strengthened the most about the dollar (an improvement of 3.3%). However, it must be said that the increase in money sent by Mexican migrants to their homeland also played a significant factor. AMLO said in his morning press conference in August that he expected that in 2024, more than USD 65 billion in remittances would arrive, which implies a significant flow of money entering the country and supporting millions of families.

AMLO has also constantly highlighted that his government has improved the collection of taxes (he even managed to reform the constitution to cancel the cancellation of taxes for large taxpayers), collecting almost 4.5 billion pesos in 2023, and it is expected that by 2024 this figure will increase by 5.1%.

However, AMLO did not seek to openly confront big domestic and foreign capital. He did not make significant tax increases for the wealthiest nor did he oppose big capital investments; in fact, during his administration, all records were broken in terms of foreign investment. Likewise, he did not eliminate the oil contracts that were in place before his arrival to the presidency. In this sense, AMLO did not pose a major challenge to Big Capital, although he did generate major contradictions with certain political powers.

Legal Reforms

Legal and constitutional reforms have been another of AMLO’s most important battlefields, with the Judicial Reform the most controversial and the most precious for his government. Thanks to this reform, all judges in the country will now be elected by popular vote, a limit will be placed on the economic benefits that judges may acquire, and the institutions of judicial control will be reformed, among others.

Important legal reforms were also made to the structure of the National Guard, which from now on will be part of the Ministry of Defense, which, according to AMLO, will allow it to improve its operational capabilities, although according to several analysts, the reform implies the militarization of the institution.

Increased tourism

The Tren Maya, a railroad line connecting the Mexican southeast, was one of AMLO’s major road works; it expects to transport three million passengers per year. It is part of an ambitious rail infrastructure plan that is projected for the year 2050.

The enormous investment involved in the construction of the Felipe Ángeles International Airport, inaugurated on March 21, 2022, should also be considered. Its construction was fraught with political controversy, as it meant the abortion of former President Peña Nieto’s airport project outside of Mexico City. AMLO called for a popular consultation to decide whether to follow Peña Nieto’s proposal for Texcoco or that of the new airport enacted by MORENA and its supporters. 68% of the voters supported AMLO’s proposal in a major political victory, although it also somewhat wore his government down in the media.

In any case, the government saw it as a breakthrough in its plan to become one of the five most touristic countries in the world. Before 2018, Mexico ranked seventh as a tourist destination country. After AMLO’s government, it is now in sixth place, receiving almost 42 million tourists annually, which implies a profit of more or less 30 billion dollars for the country.

Energy sovereignty

Energy sovereignty has also been a cornerstone of the 4T and was outlined in 2018 by AMLO: “The energy sector will be recovered. The goal is to produce gasoline, diesel, gas, and electric energy that we consume so that we can stop buying them abroad and reduce the prices of these goods to benefit the consumers and the national companies.”

In March 2022, AMLO declared the nationalization of lithium, and also launched an ambitious program to recover the country’s oil industry to decrease imports of crude oil and increase processing of oil in refineries. This recovery was also done with the intention to control the price of fuel and to avoid the gasolinazos or the surprise fuel hikes that happened during his predecessor Enrique Peña Nieto’s government which were met with mass rejection. Since his term began in 2018, six refineries were rehabilitated and the Olmeca Refinery was constructed, which are all part of the national refinery system, which has vastly amplified the country’s production capacity to put it on the road to energy sovereignty.

Decreasing corruption

The fight against corruption, was AMLO’s emblematic banner, and his government’s position was that corruption drains public resources, hampers the state’s ability to carry forward its program, and increases inequality. One of the key efforts in this was greater transparency in the designation of public offices and greater awareness and collaboration of all areas of the public and private sectors to identify the problem and prevent it. AMLO himself sought to set an example by rejecting some traditional privileges associated with holding the highest office.

His fight against corruption had positive results, although still far from what the outgoing president himself would like. According to the National Survey of Government Quality and Impact, people said they observed fewer acts of corruption by public officials (from 15,732 acts of corruption observed per 100,000 inhabitants, in 2019 it was reduced to 14,701 in 2021).

The road is still long, but many people have highlighted that there are important initiatives that AMLO himself has undertaken to try to eradicate an evil that has permeated all Mexican institutions for several decades.

The fate of a popular politician

All this data has been read by the Mexican population with great enthusiasm. Perhaps that is why AMLO, according to some polls, ends his term of office with a 80% approval rating, which makes him one of the best-evaluated former presidents after the end of his administration.

For now, it remains to be seen which path the charismatic leader decides to take: whether he will make good on his promise to stay away from public life and go to his ranch La Chingada, or whether he has some level of participation in Mexican politics. What is certain is that he will go down in history as one of the most beloved political leaders in the 21st century, who managed to reach the presidency after defeating long established political and economic elites, and effectively transformed Mexico through progressive social, economic, and political policies close to social democracy, something new in Mexico’s 21st century.