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AMLO’s Economic Thimblerig


Mexican President Andrés Manuel López Obrador. Photo: presidencia.gob.mx

By THÉRÈSE MARGOLIS

In yet another of his baffling political sleights of hand, Mexican President Andrés Manuel López Obrador (AMLO) on Wednesday, July 31, somehow managed to convince his adoring hordes of blind followers that a 0.1 percent growth rate for the second quarter of 2019 – which, in fact, confirmed that the country is in a state of economic deceleration – was a good thing, and evidence the country is doing “requetebién” (“super well,” in AMLO-ese).

Never mind that he had promised a 4 percent GDP growth rate for 2019 (fat chance of that happening, since the economy actually shrank by 0.2 percent during the first quarter of the year).

Never mind that virtually every major international financial institution and rating agency has raised red flags with downgrade-after-downgrade of both the nation’s credit and that of AMLO’s stalwart political gonfalon, the ultra-debt-ridden state oil company Petróleos Mexicanos, (but then, according to Mr. Everyone’s-Out-To-Get-Me – the guy has a serious case of paranoia – they are all part of a global plot to undermine his presidency).

And never mind that almost every productive sector of the economy (with the sole exception of the commercial industry) registered a negative growth rate during the first two trimesters of the year.

But, hey, at least the country didn’t fall into a technical recession, as predicted by most serious financial analysts.

And, well, a 0.1 percent growth is, after all, growth.

So let’s all celebrate!

So says AMLO, who was proudly brandishing these figures before his proselytes during his morning song-and-dance act at the National Palace on Wednesday.

The truth is that Mexico is on the verge of dire economic straits, with dwindling investment (other than fly-by-night carry trading, see my column in Pulse News Mexico “The Mexican Peso Is Strong, and that’s Not Necessarily a Good Thing” from July 8) and dubious international credibility (thanks to the cancelation of a massive — and much needed — $13 billion international airport in the middle of its construction and a demand for a pricing do-over on previously signed and mostly completed pipeline contracts).

The nation’s health sector is in collapse (hundreds of hospitals and clinics are without crucial medications) and the education system is back in the hands of Mafioso teachers unions who care more about being able to pass their positions down to their offspring (whether they have any academic qualifications or not) than establishing high-quality learning standards for students.

Employment figures are down, with just a 2.4 percent growth in jobs during the first quarter of 2019, compared to 4 percent growth for that same period in 2018.

And although the numbers are not yet out, early predictions put the job growth rate for the second quarter at just 1 percent.

And even federal funds that were supposed to be allocated (after AMLO’s savage slash-and-burn republican austerity program) during the first half of the year for direly needed sectors such as health and education, were somehow not used by the government, according to the Treasury Secretariat (Hacienda), which reported an “under-expenditure” of 174 billion pesos.In fact, the president said that Hacienda’s under-expenditure was instead a “national Budget savings,” a saving at the cost of patients dying from cancer and AIDS who do not have access to medications and at the cost of Mexican children who are facing sub-quality public schooling.

But AMLO has his own “alternative data,” and according to him, the economy in Mexico is hunky-dory.

AMLO said that Mexico’s “positive” 0.1 growth rate for the second quarter of 2019 is reason to celebrate.

And those who believe his deceptive shell game are doing just that, while those of us with a more realistic view of the nation’s economy are worrying what lies ahead.

 

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Categories: Mexico, Opinion, PoliticsTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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