Socialism Persists In Mexico: How Concerning Is Claudia Sheinbaum's Victory For Expats?

Mexico has been a cherished expat hub for so long, but will it be the same after the victory of newly elected socialist president Claudia Sheinbaum? 

Sheinbaum is a member of the Morena party, founded in 2011 by her predecessor, Andrés Manuel López Obrador (AMLO). This party presents itself as a left-wing social democrat party, the sound of which may, understandably so, frighten some expats and investors. You may also wonder whether Mexico is still a good place to start a new life abroad, and I get it—it’s no secret that I find socialism abhorrent in any and every incarnation. 

That’s why, in this article, we’ll discuss Sheinmbaum’s background, some of her proposed policies, how her policies compare to those of her predecessor and, most importantly, what expats can expect from Mexico after her election. 

Claudia Sheinbaum claims she will fulfill all her campaign promises without raising taxes, while at the same time not making it clear where the resources will come from. I think we all know where this is going...(Photo by Luis Cortes/REUTERS)

WHO IS CLAUDIA SHEINBAUM?

Claudia Sheibaum is the first female president of Mexico, having won with around 60% of the votes. She studied physics and holds a master’s in energy engineering as well as a doctorate in environmental engineering. Like many Latin American leaders, Sheinbaum was part of a left-wing movement before ever participating in politics. 

Indeed, not only did she lead protests against the “neoliberal” policies in Mexico in the 80s, but she also married and had one kid with Carlos Ímaz, a left-wing politician from the Democratic Revolution Party (PDR, as per the Spanish Acronym). 

In 2007, she contributed as an author to the UN’s Intergovernmental Panel on Climate Change (IPCC), which collectively was awarded the Nobel Peace Prize in 2007. From 2018 to 2023, she served as the Head of Government in Mexico City.  

Freedom-minded expats may think twice before making the decision to stay in the country or move to another location when they see how embedded the new president is in socialist and disarmament policies. The fact that she’s basically a socialist, paired with her climate change views, seems a bit scary.

Now, let’s look at her policy proposals to understand better what she intends to do.

GOVERNMENT PLAN: 100 STEPS FOR TRANSFORMATION

Sheinbaum's proposed government program, 100 Steps for Transformation, outlines all her proposed policies in energy, foreign affairs, education, healthcare, and taxation. Her campaign document is full of promises, such as increasing security, protecting "democracy," combating corruption, and facilitating access to education. As we all know, politicians are professionals in the art of making promises but not in the art of delivering on them.

Who doesn't want to see poverty decrease, wealth increase, and better access to quality education? But the key question is: who will pay for it? Somewhat contradictorily, one of the Sheinbaum administration's goals is fiscal responsibility, which is continuing in AMLO’s vein. She also stated that she would achieve all her objectives without raising taxes, which is entirely possible when you have the power to print money and use the most silent and cruel tax of all: inflation.

Other projects include:

• Mexico’s Train Infrastructure Development 

• Violence Reduction

• Government Digitization

In the next section, we’ll examine the potential differences and similarities in policy between AMLO and Sheinbaum. Although they are from the same party, they aren’t exact clones of one another and have shown some stark differences, particularly when it comes to the handling of the COVID pandemic.

Although Mexico has been electing socialists for decades, it is important to remember that the country is still the preferred destination for North American expats. Features such as proximity and low cost of living are decisive factors for many expats

COMPARING AMLO AND SHEINBAUM: WHAT EXPATS NEED TO KNOW

AMLO and Sheinbaum belong to the same party and are both socialists, but they are vastly different in certain regards. For example, AMLO kept the country open during the COVID-19 pandemic, acknowledging that many Mexicans live off the formal economy. He wanted to protect everyone’s livelihoods and would openly contradict government health ministers' suggestions on closing the economy. He also kept the country's borders open without restriction, never requiring PCR tests or vaccines for entry. 

On the other hand, Sheinbaum imposed mask mandates in Mexico City and turned it into one of the cities in the world with the highest vaccination rates. Therefore, Sheinbaum’s election could pose a threat to Mexico if an event like COVID ever happens again; under her presidency, you could potentially see more pro-WEF and pro-WHO policies, something I, of course, stand in complete opposition to. 

It should be noted that AMLO invited Sheinbaum to join his party and appointed her as Secretary for the Environment when he was too the Head of Government in Mexico City. They have a close relationship; both are socialists and want to carry out what they call the Fourth Transformation, which intends to tackle structural problems like corruption and poverty as well as redistribute wealth. As stated, they’re socialists, ultimately torn from the same cloth. 

Here’s a fun fact about AMLO: During his campaign, one of his promises was to sell the presidential private jet, and he actually went ahead and did it once he was elected. He sold it for around $92,000,000 to the government of Tajikistan. That money was then used to build two public hospitals. You have to give him some credit for following up on his promise if nothing else. 

IMPLICATIONS FOR EXPATS

All things considered, her government program has some good and bad aspects for both locals and expats. For instance, if paperwork becomes more streamlined and digitized, expats may move to Mexico faster and more efficiently. On the fiscal front, regardless of her claims regarding taxation, if the government spends more, then it's the people who will pay it in the end, which could certainly extend to expats living in Mexico who deal with the local economy.

Mexico has elected multiple socialist presidents during the last few decades, including former president AMLO. But if Mexico is, in a sense, more left-leaning, why are so many expats still considering this country a good choice? Let’s not forget that Mexico is the preferred destination for US expats; the good weather, proximity to the US, and more affordable cost of living are all factors expats consider when flocking to Mexico. 

Moreover, the huge tourism industry generates millions of dollars every year, and the country’s historical appeal and the people’s charm make many visitors stay. I even wrote a book called Expats Guide on Moving To Mexico, where I detail the good, the bad and the ugly of Mexico. I strongly recommend that you get your copy, as my team and I spent thousands of hours putting it together and making sure it had the information you need before you make a move. 

Mexico can offer diverse options for expats, whether for those who want to live by the coast in Puerto Vallarta or Cancún, or for those seeking a quieter life in San Miguel de Allende or Palenque

THE VERDICT: STILL A GOOD COUNTRY FOR EXPATS? 

As I said, only time will tell whether Mexico remains an attractive country. In the end, every situation is contingent upon each person’s preferences and circumstances. Some move to Mexico for love, others to work as digital nomads, and others only to retire and go to the beach daily while still being close to their families in the U.S. The country is huge and welcoming to different types of expats, as every state and city has something different to offer. 

If you want to live in a coastal town, you can go to places like Puerto Vallarta or Cancún. Mexico City is almost a must if you prefer a vibrant city life. If you’re more into a tranquil rural life, you can opt for San Miguel de Allende or Palenque. The quality of life can be top-notch, allowing you to live on pennies on the dollar while enjoying fresh fruits and vegetables, tasty tacos and quesadillas and, of course, the warmth of Mexican people. Real estate prices are considerably lower than in other major Western countries. According to Statista, the average house price in Mexico last year was 1,670,510 MXN (under $93,000 USD). Housing in cities like Mexico City or Guadalajara is more expensive, of course, but it is still way more accessible by Western standards. 

Another major benefit of living in Mexico is its geographical location, which can be a great perk for North Americans or simply travel enthusiasts. With multiple international airports throughout the country, it is relatively easy to explore other countries in the region or even visit places like Europe. 

I would guess that Mexico will maintain its expat hub status despite the ghost of socialism. In fact, other countries in Latin America, such as Bolivia and Nicaragua, are currently governed by socialists but offer territorial taxation. Chile offers a three-year tax holiday for expats, even though the current president is socialist, too. 

As of this writing, however, there is still some controversy, as Sheinbaum’s main opponent, Xóchitl Gálvez, has argued that there has been election fraud. While it remains to be seen if anything will come of calls for a recount, it is true that Mexico has a long history of election fraud, so it would not be surprising if that were the case.

Despite Mexico being governed by socialists for a long time, like much of Latin America, there are still some countries with better tax rates than many of the major countries that call themselves "capitalist"

CONCLUSION

As an expat and investor, I like to do my due diligence instead of just focusing on the headlines. I know that Mexico has been governed by socialists and just elected another one, but it is still the right place for many. The same idea applies to other countries all over Latin America. Not all of Latin America is socialist, and even some socialist countries have better taxes than many major “capitalist” countries!

Not everything boils down to taxes, though. I always encourage my clients to find somewhere they can really feel at home and build a life in. Consider factors like the cost of living and housing, lifestyle, language, connectivity, and whatnot. 

What we can expect from Mexico's new socialist president remains to be seen. AMLO was elected as a socialist, and the truth is that Mexico isn’t all that different from before he entered office, particularly as it pertains to expats. Scheinbaum was elected to a six-year term, so let's hope that, at the very least, the worst of her ideas remain ideas and don’t set Mexico down the path to becoming a true socialist hellhole like Venezuela.  But if history holds true, the country will continue to check many boxes for expats despite the whacky ideas of its Presidents.