1st Governance Fragility Index of the Sheinbaum Administration (2025)
“Between Apparent Stability and Silent Breakdown”
by Ghaleb Krame | Oct 16th, 2025
Executive Summary
The year 2025 marks the beginning of one of Mexico’s most complex political cycles in two decades.
President Claudia Sheinbaum’s administration faces a convergence of political, economic, social, environmental, and security threats, forming the foundation of the first National Governance Fragility Index developed by Krame Report.
Key findings indicate:
🔴 Political. Morena—the ruling party—faces an internal fracture between Claudistas (Sheinbaum loyalists) and AMLOistas (supporters of former president López Obrador). Corruption scandals and alleged links with organized crime are eroding legitimacy and policy cohesion.
🟠 Economic. Proposed U.S. tariffs, a slowdown in nearshoring, and open confrontations with major business leaders heighten the risk of a technical recession.
🟡 Social. Widespread tax disobedience, rural producer blockades, and university protests reveal growing civic fatigue amid insecurity and ineffective governance.
🟢 Environmental. Climate volatility and weak urban resilience expose structural vulnerabilities in territorial and disaster management.
🔴 Security / Military. Cartels’ use of armed drones and reported military involvement in huachicol (fuel-theft) operations increase internal fragility and tensions with Washington.
Although Morena’s congressional super-majority—holding over 70 percent of seats—secures formal control, it also concentrates full responsibility should multiple crises converge simultaneously.
📊 Interpretation:
The Sheinbaum administration begins its term under conditions of apparent stability yet faces cross-sector pressures capable of triggering systemic instability within months.
⚖️ Political Threats | Internal Fractures, Corruption, and External Pressure
Internal Division
Tensions between Claudistas and AMLOistas are no longer rumors but a structural split within Morena. Two competing centers of power now dispute control of the state.
Former President López Obrador’s ongoing influence over cabinet members complicates presidential authority and weakens internal discipline, creating a fragmented chain of political command.
Criminal Nexus
The United States revoked more than 50 visas of Morena politicians suspected of links to drug-trafficking networks.
Fiscal-fuel theft scandals (huachicol fiscal) have implicated Adán Augusto López Hernández and sons of former President López Obrador, with alleged connections to criminal groups such as La Barredora.
Leaked audio recordings suggest multimillion-dollar tax evasion. The administration insists these are “isolated incidents,” yet the public narrative of impunity continues to expand.
Institutional Concentration
Morena’s dominance—72.8 percent of federal deputies and 84.4 percent of state legislatures—has eroded effective checks and balances.
Judicial and electoral reforms targeting the TEPJF (Electoral Tribunal) and INE (National Electoral Institute) have increased perceptions of institutional capture.
U.S. Pressure
The return of a hard-line stance in Washington, particularly under Donald Trump’s renewed influence, has reignited discussions on designating Mexican cartels as terrorist organizations.
Such rhetoric strains bilateral relations and raises sovereignty concerns within Mexico while strengthening nationalist narratives at home.
📊 Risk Level: 🔴 Critical
💰 Economic Threats | Tariffs, Recession Risk, and Business Friction
Tariffs and Recession Risk
The Trump administration’s proposal to impose 25 percent tariffs on Mexican exports threatens to reduce Mexico’s GDP by up to 1.5 percent, potentially pushing the country into a technical recession and disrupting nearly $840 billion in bilateral trade under the USMCA (United States–Mexico–Canada Agreement).
Domestic Uncertainty
Recent judicial and labor reforms prioritize political criteria over economic efficiency, discouraging investment.
Public debt has reached 51 percent of GDP, increasing the likelihood of tax hikes in 2026 and limiting fiscal flexibility.
Pemex in Crisis
The state-owned oil company faces losses of roughly $3.8 billion from large-scale fuel theft.
Rising methane emissions and declining output jeopardize both fiscal stability and Mexico’s climate-neutrality targets.
Conflict with the Private Sector
A high-profile dispute with businessman Ricardo Salinas Pliego over $4 billion in unpaid taxes highlights growing friction between Morena and the private sector.
While government officials frame these actions as fiscal accountability, business leaders increasingly interpret them as politically motivated enforcement.
📊 Risk Level: 🟠 Severe
👥 Social Threats | Fiscal Discontent and Rural Protest
Tax Disobedience
Growing frustration with corruption and inadequate public services has sparked a “no payment” movement among taxpayers.
Strikes within the SAT (Mexico’s tax authority) have disrupted operations, amplifying fiscal uncertainty as citizens question how public funds are managed.
Producers in Resistance
Lemon growers (limoneros) in Michoacán have halted up to 80 percent of packing operations due to cartel extortion, demanding state protection and transparent intervention.
Farmers and ranchers launched a nationwide strike in October 2025, calling for a fair corn price (around 7,200 pesos per ton) and protections against U.S. imports under the USMCA framework.
University Protests
Students from the University of Veracruz (UV) protested after the disappearance of 192 classmates during post-flood chaos, accusing both university authorities and the state government of negligence and delayed emergency response.
These events highlight rising civic fatigue and widening mistrust in government institutions, particularly in regions affected by violence or natural disasters.
📊 Risk Level: 🟡 Elevated
🌧️ Environmental Threats | Climate Collapse and Urban Vulnerability
Escalating Natural Disasters
In 2025, severe flooding left 66 dead and more than 300 communities isolated across Veracruz, Puebla, and Hidalgo.
These events underscore Mexico’s growing exposure to climate-driven disasters, where infrastructure failures amplify human and economic losses.
Urban Subsidence in Mexico City
Mexico City continues to sink at a rate of up to 30 centimeters per year, jeopardizing critical infrastructure, water systems, and transport networks.
Uncontrolled groundwater extraction and weak urban planning have created a slow-moving structural crisis affecting millions.
Pemex and Climate Commitments
Rising methane emissions from Pemex, combined with delayed clean-energy transitions, threaten Mexico’s 2030 net-zero targets and complicate international environmental credibility.
Systemic Weakness
The federal government’s reactive disaster response model—without dedicated emergency funds or updated prevention protocols—reveals the high cost of having dismantled the FONDEN (Mexico’s former national disaster relief fund).
📊 Risk Level: 🟡 Serious / Elevated
⚔️ Military and Security Threats | Drones, Fuel Theft, and U.S. Tensions
Technological Warfare
The Jalisco New Generation Cartel (CJNG) and other organized-crime groups have begun deploying FPV (First-Person-View) drones armed with explosives in Michoacán and Chiapas, giving them tactical superiority over local security forces.
These low-cost weapons systems mark a dangerous escalation in cartel capabilities and blur the line between criminal operations and hybrid warfare.
“Narco-Humanitarian Aid”
Following the 2025 floods, the CJNG distributed food and supplies in Veracruz communities abandoned by the state, strengthening its local legitimacy and weakening government authority.
This reflects a broader trend of cartels filling governance vacuums in disaster-affected or neglected areas.
Risk of U.S. Intervention
The posting of bounties of up to $50,000 USD for the assassination of U.S. ICE (Immigration and Customs Enforcement) agents, combined with the revocation of visas for Mexican officials linked to organized crime, has reignited debate in Washington about direct military options or cross-border drone strikes against cartels.
While such moves would face legal and diplomatic barriers, the rhetoric itself fuels bilateral tension.
Military Corruption
Recent arrests of Mexican Navy personnel implicated in fuel-theft (huachicol) operations reveal deep corruption within the armed forces.
Defense-budget cuts of 41.5 percent have further eroded operational readiness and oversight capacity, compounding institutional fragility.
📊 Risk Level: 🔴 Critical
Interpretive note. Political and security pressures define the ceiling of systemic risk (Critical), while economic headwinds and social mobilization set the pace of deterioration (Severe/Elevated). Environmental stress acts as a risk multiplier, magnifying shocks across other domains.
Strategic Conclusions
Absolute power does not guarantee control.
Morena’s institutional dominance enables rapid decision-making but removes the stabilizing counterweights that normally absorb political and economic shocks.An economy on a tightrope.
A tactical error in U.S.–Mexico trade relations could trigger the administration’s first political-economic recession, undermining Sheinbaum’s credibility and fiscal maneuverability.Civic fatigue as a systemic threat.
The current wave of strikes and protests is not episodic. It signals the emergence of a spontaneous coalition of discontent among taxpayers, producers, and students — all perceiving themselves as victims of state inefficiency.Climate change equals physical ungovernability.
Mexico’s cities are sinking; rivers overflow; disaster funds arrive too late. Environmental vulnerability has become a direct component of national governance risk.Criminal militarization.
Cartel use of drone-borne explosives redefines the boundary between public security and irregular warfare, forcing Mexico to rethink its internal defense doctrine and cross-border cooperation with the United States.
🧠 General Conclusion
Mexico is navigating a period of apparent stability with a high potential for rupture.
The Sheinbaum administration’s central challenge will be to prevent the accumulation of multiple low-intensity crises — economic, social, and environmental — from converging into a systemic governance breakdown.
Governance resilience will depend on three factors:
Political coherence within Morena and the broader ruling coalition.
Credible economic management amid U.S. protectionist shifts and declining investor confidence.
Institutional capacity to respond to natural disasters and security shocks without further militarizing domestic policy.
If these conditions deteriorate simultaneously, Mexico risks entering a cycle of chronic fragility, in which stability becomes performative rather than structural — a controlled decline disguised as continuity.