MEXICO CITY — On Monday, Mexico’s president declared that the funds generated from the dissolution of independent oversight and regulatory agencies would primarily support the military, specifically for increasing soldiers’ salaries. This statement from President Claudia Sheinbaum marks a continuation of the country’s unusual approaches to finance its expanding military operations.
Recently, Mexico’s Congress passed a legislation imposing a $42 immigration fee on every cruise ship passenger, with a significant portion of this income earmarked for the armed forces. Since taking over in 2019, Sheinbaum’s Morena party has extended the military’s authority, allowing them to develop and manage various infrastructures, including railways and airports, despite some projects reportedly operating at a loss.
Historically, the Mexican armed forces had limited roles and were prohibited from engaging in political matters, as well as having minimal business interests. This changed dramatically under Sheinbaum’s predecessor, Andrés Manuel López Obrador, who perceived the military as a loyal supporter and a key protector of his political agenda. López Obrador, who is also Sheinbaum’s political mentor, made the armed forces the principal law enforcement entities in the nation, along with the quasi-military National Guard.
In late November, the Mexican Senate, under the dominance of the president’s Morena party, decided to abolish seven independent regulatory and oversight agencies. Critics argue that this action will consolidate the ruling party’s authority and diminish external oversight. Sheinbaum defended this decision, claiming it would optimize government efficiency in managing functions such as information requests, anti-monopoly regulation, and energy market oversight.
Nevertheless, apprehensions among critics and foreign investors rise regarding potential bias and reduced transparency that could stem from this shift. Earlier this month, the Senate’s decision to introduce a $42 fee for cruise ship passengers faced backlash from the tourism sector, with business organizations warning that this charge, which previously exempted cruise passengers, could adversely affect Mexico’s $500 million yearly cruise industry.
Significantly, two-thirds of the funds collected from these new charges will channel into the military budget rather than enhancing port facilities. Moreover, several military-led initiatives appear to be financially unviable, contributing to the necessity for the government to seek new financial resources for the armed forces. For instance, the “Maya Train,” a flagship project of López Obrador, which circles the Yucatan Peninsula, is attracting only 20% of the projected ridership since its inauguration on December 16, 2023.
Though the Maya Train has commenced operations, it remains unfinished, with two less-trafficked segments anticipated to start function later this month. As of December 8, authorities recorded that the line served just over 600,000 passengers in its first 51 weeks, significantly short of the expected 3 million passengers annually.
In a recent move, the government unveiled a “package tour” initiative, connecting flights offered by the state-run Mexicana airline to the Maya Train stations. These flights will commence from another military-operated facility, the new Felipe Angeles Airport in Mexico City, which is only beginning to stabilize its financial situation after the government redirected some cargo and passenger traffic there.
Facing significant budget shortfalls while financing favored construction projects like railroads and oil refineries—many led by the military—the ruling Morena party is intensifying its search for alternative funding channels.
