López Obrador's judicial reform generates fear and distrust in Mexican investment.

The recent judicial reform proposal driven by President Andrés Manuel López Obrador has unleashed a torrent of criticism and concerns within the Mexican private sector and abroad. While last year the country's economy seemed to be on a growth trajectory, alarms have begun to sound loudly following the results of the June 2 elections, where the ruling party achieved a resounding victory. Markets have responded with strong pessimism, warning that the reform could have profound implications for both democracy and the economy. At the center of the debate is the proposal to elect judges, ministers, and magistrates through a popular process. This measure, which is expected to come into effect next year to replace up to 900 judicial positions at once, has raised fears that it will undermine the independence of the Judiciary, concentrating control in the hands of the Executive. The opposition has denounced that the separation of powers, a fundamental principle in any democracy, is being undermined. Although modifications have been proposed to the original project, such as the creation of an Evaluation Committee to filter candidates, many believe this is not enough. Luis Maizel, a Mexican investor in the United States, has expressed his discontent, stating that the true nature of the process still allows the government to control the selection of judges, which could render the popular vote irrelevant. The uncertainty and risk posed by this reform have led Maizel to divest from Mexican debt bonds, a clear indicator of the lack of confidence prevailing in the markets. The situation has become more serious with the recent fall of the Mexican peso, which suffered a significant devaluation following Morena's victory in the elections. This context has prompted three global investment banks to publish reports warning about the increased risk of investing in Mexico, which could have disastrous effects on the economy. The country's major business associations have also echoed these concerns, calling on the National Electoral Institute (INE) to intervene to limit the ruling party's representation in Congress. The international impact of the reform has been notable, with the U.S. Ambassador to Mexico, Ken Salazar, changing his stance on the popular election of judges. After having supported the idea, he now warns that this reform could threaten Mexican democracy and harm the trade relationship between the two countries, an unexpected turn that has surprised many in diplomatic and financial circles. Analysts warn that the risk of greater politicization of the Judiciary could affect Mexico's perception as an investment destination. Damian Fraser, former director of UBS in Mexico, points out that the strength of the rule of law in the United States is not comparable to the situation in Mexico, making the reform proposal viewed with more skepticism. On the other hand, both Maizel and Fraser agree that the climate of uncertainty surrounding the reform adds to other factors that already made Mexico a risky investment destination. Economic slowdown, high fiscal deficit, and lack of quality in public policy are just some of the concerns fueling discouragement among investors. Ultimately, the concentration of power in a single party worries many, as it could lead to abuse of power if adequate checks are not established. Maizel reflects on the need for a system where power is negotiated and discussed, rather than imposed by decree. The current situation in Mexico, which seems to be heading towards greater centralization of power, raises serious questions about the future of democracy and the economy in the country. The business community, both national and international, watches with trepidation the developments that lie ahead, hoping that the voice of the private sector will not be ignored in the decision-making process.