Andres Manuel Lopez Obrador promises to shake things up as Mexico's new president

Leftists leader faces challenges of rampant drug crime, poverty and corruption

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Anti-establishment leftist Andres Manuel Lopez Obrador promised "deep and radical" change in Mexico as he assumed the presidency on Saturday, five months after a landslide election victory.

The leader, widely known by his initials as "AMLO", took the oath of office and donned the presidential sash before Congress - where a coalition led by the upstart party he founded four years ago, Morena, now has strong majorities in both houses.

Ending 89 years of government by the same two parties, Mr Lopez Obrador surged to victory in the July 1 elections with promises of a new approach to issues fueling widespread outrage: crime, poverty and corruption.

But not everyone is persuaded. Critics say the sharp-tongued, silver-haired leader has a radical and authoritarian streak. And despite his promises of business-friendly policies, Mexican stocks and the peso have plunged in recent weeks.

That did not stop Mr Lopez Obrador, 65, from repeating his promise of a sweeping "transformation" as he started his six-year term.

"It might seem pretentious or exaggerated to say it, but today is not just the start of a new government. It is the start of a political regime change," he said.

"We will carry out a peaceful and orderly but also deep and radical transformation."

After being sworn in, Mr Lopez Obrador climbed in his white Volkswagen Jetta - his car of choice - and headed to Mexico City's central square, the Zocalo, for a colourful second ceremony of his own design.

There, indigenous shamans purified him with incense and flowers, and presented him with a symbolic chieftain's staff.

"I reaffirm my commitment not to lie, rob or betray the Mexican people," he said, clutching the long wooden staff.

Jose Angel Mejia, 38, was among the tens of thousands of people who gathered to fete the new president.

"It's a historic day, I still can't believe it," he said, raising his eight-year-old son's arm in the air in celebration.

"We're going to have a change at last."

Mexico's President Andres Manuel Lopez Obrador takes part in an indigenous ceremony at the AMLO Fest at Zocalo square in Mexico City, Mexico December 1, 2018. Picture taken December 1, 2018. Press Office Andres Manuel Lopez Obrador/Daniel Aguilar/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY
President Andres Manuel Lopez Obrador takes part in an indigenous ceremony at Zocalo square in Mexico City after his formal inauguration on December 1, 2018. via Reuters

The new president inherits a sticky set of problems from his unpopular predecessor, Enrique Pena Nieto.

They include deeply entrenched corruption, gruesome violence fuelled by the war on drug cartels, and the caravan of 6,000 Central American migrants camped at the US-Mexican border - not to mention the minefield that diplomacy with Mexico's giant northern neighbour has become under President Donald Trump.

Mr Lopez Obrador, a former protest leader and Mexico City mayor, has been short on specifics regarding his plans for all of the above.

What he is promising, first and foremost, is a presidency like no other in Mexican history.

Vowing to lead his anti-corruption, pro-austerity drive by example, he has forsworn the presidential residence, jet and security detail, and cut his own salary by 60 percent.

On Saturday, the sumptuous presidential residence, Los Pinos, was opened to the public as a cultural center.

Mr Lopez Obrador's inaugural address largely repeated the sweeping but vague promises of his campaign.

He resumed his attempts to soothe the markets with promises of balanced budgets and pro-investment policies.

But he also attacked Mexico's "neoliberal" economic model as "a disaster" and railed against Mr Pena Nieto's privatisation of the energy sector.

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Mr Lopez Obrador has caused jitters over the future of Latin America's second-largest economy with decisions such as the cancellation a new $13 billion airport for Mexico City that was already one-third complete.

The day's guest list included a host of regional presidents - among them crisis-torn Venezuela's President Nicolas Maduro, who was met with protests from Mexico's conservative opposition.

King Felipe VI of Spain, US Vice President Mike Pence, and first daughter and White House adviser Ivanka Trump also attended.

President Trump, who was at the G20 summit in Argentina, has struck up a surprisingly warm relationship with Mr Lopez Obrador - though the migrant caravan threatens to interrupt that honeymoon.

The American president is pressuring Mr Lopez Obrador to accept a deal to keep asylum-seeking migrants in Mexico while their claims are processed in the United States.

Mexico's foreign minister, Marcelo Ebrard, is due in Washington on Sunday for talks on the issue with US Secretary of State Mike Pompeo.