By RICARDO CASTILLO
Bleak Outlook on Poverty
There is no question that Mexico’s gross domestic product will plummet this year.
The question is how much it will fall, and guesses range from between 5.7 percent to 10.5 percent.
A recent study by the National Council for the Evaluation of Social Development (Coneval) presented two different economic scenarios for the rest of 2020 in which the already-staggering number of poor in Mexico will increase.
The first scenario put the economy dropping by 7 percent, placing the number of poor at a soaring 12 million by the end of the year.
The second said that if the economy were to shrink by12 percent – a contemplated feasibility – the number of poor might increase by 16.4 million and 18 million Mexicans will fall into abject poverty.
But even in the case of the possible scenario, with just a 5.3 percent drop in GDP, the number of poor Mexicans would increase by 10.7 million.
Coneval said that, at present, about 54 percent of Mexicans live below the poverty line, and 10 percent live in extreme poverty.
In fact, according to World Bank and the United Nations Children’s Fund statistics, the number of poor in Mexico has been increasing annually since 2006, when 42.9 percent of the population lived the national poverty line, with Chiapas, Guerrero and Puebla being the states with the highest number of poor.
Even before the covid-19 pandemic and subsequent labor layoffs, the United Nations said, about a quarter of the Mexican workforce was underemployed. and the average salary in rural areas was three to four times less than that of urban areas in Mexico.
VW and Audi Shuttered
After much hesitation, Puebla Governor Miguel Barbosa signed an executive order banning auto manufacturing concerns Volkswagen and Audi from returning to assembly activities on June 1.
Previous to last Friday, May 22, when the decree was published in the Puebla State Official Gazette, Barbosa had said that he would leave the decision of opening the auto industry for business to the federal government.
Although the decree does not make an explicit prohibition, Barbosa said that he hopes that the executives at the two companies and the construction industry will understand what the state is undergoing to both rescue the economy and “limit the cost of human lives.”
The covid-19 pandemic in the state of Puebla, 100 miles east of Mexico City, is infecting an average of 123 people per day.
“We have to prevent the pandemic from becoming catastrophic in our state,” Barbosa said.
On a related subject, the Lear auto and planes parts manufacturer in Ciudad Juárez, at the El Paso U.S. border, reopened operations on Friday, M ay 22, with no official requests not to. It is reported that the company simply summoned all its workers to reinitiate activities.
Also, with many distribution lines disrupted by the covid-19 pandemic, French auto maker Peugeot, upon seeing the hefty growth in digital purchasing and delivery business grow by as much as 40 percent, opened its online store for parts distribution.
Big Three Stop Bill
A bill introduced into the Mexican Chamber of Deputies aiming to eliminate 43 government-sponsored trusts was temporarily put on hold by National Regeneration Movement (Morena) President Mario Delgado.
Delgado didn’t need to freeze all of the trust funds, but the outcry by “The Big Three” Mexican Oscar-winning filmmakers Guillermo del Toro, Alejandro González Iñarritu and Alfonso Cuarón, led to a noisy press complaint about the elimination of the Padierna Law, which also eliminated the Fund for Investment and Stimuli for Filmmaking, which subsidized up-and-coming Mexican film directors.
The bill to eliminate the trust funds was introduced by Morena Deputy Dolores Padierna, who will now will have to redraft the bill leaving the filmmaking fund unscathed.
Who said the Oscars don’t have political weight in Mexico?
CMN Seeks More Loans
After successfully obtaining a $12 billion loan from the Inter-American Development Bank (IADB) in April that benefited 30,000 small registered business, the Mexico Competitiveness Center (Ccmx) is searching for a new credit institution to continue financing.
The Ccmx is the investment-obtaining branch of the powerful Mexican Business Council (CMN), and its director general, in a video conference, said that it has advanced in making contacts with lending institutions to bring to small companies their main shortcoming, cash flow.
The move, not backed by the government, is aiming at providing relief to many small companies registered with entrepreneurial organizations.
Marines to Customs
Mexican President Andrés Manuel López Obrador (AMLO) announced last week that the Mexican Navy will be in charge of cleaning up government customs agencies from corruption.
AMLO said that at customs the same strategy applied to immigration will be followed, which is to militarize surveillance, since it is evident that organized criminal organizations are operating inside and outside customs through corrupt practices.
The militarization is aimed at reinforcing the recently appointed Customs czar at the Treasury Secretariat, Horacio Duarte, to help clean up Mexican customs houses, as much as feasible.
Oil Prices Rebound (Somewhat)
The heavy mix of Mexican crude rebounded by what seems to be a whopping 32.65 percent in the past two weeks, closing last Friday at $28.03 a barrel, up from $21.13 a barrel on May 13.
Prices for all types of oil on the global marketplace have increased thanks to the United States and Saudi Arabia, as well as other OPEC members, cutting down on production, once again, a money-making commodity for Mexico.
Sports: Soccer League Shuts Down
The Mexican Soccer Federation Informed soccer fans on Friday, May 22, that the Mexican Soccer League, suspended eight weeks ago, is definitely finished for this season.
The next season is expected to start in August, covid-19 contagion permitting.
The 18-partcipant teams played only 10 of the 18 programmed games this season, creating uncertainty as to which team would be the champion.
It was ultimately decided that there would be no champion this season.
Nevertheless, in keeping with international competition tourneys, the first- and second-place teams, Cruz Azul and León, will be the ones representing Mexico in the 28 nations North, Central American and Caribbean Football Confederation (CONCACAF) champion’s tournament.