By RICARDO CASTILLO

The New Normal Has Arrived

The political debate carried out last week in Mexico over how to go about bringing a solution to the economic standstill caused by the covid-19 pandemic posed a medical, political and economic quagmire.

On the one side, there was the voice of Mexican Public Health Undersecretary epidemiologist Hugo López-Gatell announcing on Friday, May 29, that the social distancing of what was known as Phase 3 of the epidemic is over.

López-Gatell also said that as of Monday, June 1, the nation would be entering the “new normal” reality phase that is to be ruled by a four-light (green, yellow, orange and red) traffic signal that will indicate the degree of risk of contagion, which will be updated once a week.

López-Gatell presented a map of the entire nation in red with one exception, the state of Zacatecas, which was in orange, not much better.

There was scant – though noisy – political reaction to the red Mexico map.

The traffic light system was rejected by seven Mexican governors who have been extremely proactive over the past months. They are the governors of the states of Coahuila, Nuevo León, Tamaulipas, Michoacán, Durango, Jalisco and Colima.

The group rejected the system because they said that it is centralist (meaning, as seen from Mexico City) and that each state has its own regional traffic light system, and each of the seven states have different factors that come into play as to the reopening of their respective economies, ranging from desert-like geography of the mammoth-sized state of Coahuila to the tropical Pacific seaside of Colima.

Moreover, they pointed out, each state, under the Mexican Constitution, although a part of Mexico, is politically autonomous and is not subject to impositions from the central government.

Immediately after the traffic light decree from López-Gatell, the governors, who had met in Parras, Coahuila, the week before, met anew on Saturday, May 30, in Comala, Colima.

This time the governors complained that the federal government wanted to abandon them and make them fully responsible for looking after those affected by the covid-19. pandemic

Michoacán Governor Silvano Aureoles read the final statement of the Comala powwow, in which, besides blaming the federal government of “making us responsible for the deceased,” the governors said: “In consequence, the states will initiate a gradual reopening procedure, with sanitary measures and a larger testing capacity. This reopening will be done in conjunction with society and the entrepreneurial sector. Over the next few days, we will be notifying in our respective states the carrying out of the policies we have developed over the past weeks on behalf of the 28 million Mexicans who live in the seven states.”

The third measure – apparently now left to the governors – is the return to what was “normal” business routines.

As stated, each state has a different and specific health concern (facilities are not equal either) and common sense seems to determine what “the new normal” will be, tiptoeing over contagion regions.

The remaining 25 states agreed with the federal government’s proposal that each governor is responsible for pacing for the reopening of their economies.

AMLO on Tour

Mexican President Andrés Manuel López Obrador (AMLO) made the first leg of a two-day road trip to Cancún on Saturday, May 30, stopping at his personal home in Palenque, Chiapas, to spend the night.

On Sunday, May 31, he was traveling the second leg of the trip to cover, over the next five days, five southeastern Mexico states and give the start flag for  the construction of one of his pet projects, the Tren Maya tourist train.

On Monday, June 1, AMLO will be in Cancun, Quintana Roo, where he will launch the polemic project and then go to Yucatan, Campeche, Tabasco and back to Chiapas.

All of his travel will be by road.

Humanitarian Bridges

The Mexican government established in various docking ports what it has called 13 “humanitarian bridges” to help workers stranded in tourist cruise ships disembark.

Puerto Vallarta was the humanitarian port of the largest movement of disembarked passengers, with a total of 2,273 arrivals on Mexican land by different nationalities, all of whom were then sent home in charter planes.

Also participating were Puerto Progreso in Mérida and Cozumel Island, as well as a goodwill joint hosting endeavor in San Diego, where 98 Mexican cruise ship employees and 149 workers of other nationalities were disembarked.

The cruise ships that landed were Rotterdam, MS Europa, Osterdam, Westerdam, Marella Explorer II, Celebrity Eclipse, Disney Fantasy, Carnival Glory and Koningsdam.

Financial Briefs

The deluge of unsunny forecasts for the Mexican economy has been so massive that we can offer here only a brief digest of the economy-related news items.

JP Morgan Chase said that the risk of Mexico losing its investment grade status keeps growing and is now in the process of turning into “a fallen angel,” whatever that may mean. The date slated for the angel to fall is at the end of 2021 or the beginning of 2022.

On the other hand, Central Banco de México (Banxico) Governor Alejandro Díaz de León Carrillo said at a virtual gathering with the Senate Political Committee that he estimates that the economic shock caused by the covid-19 pandemic will be transitory, but warned that the second semester – which starts today – will show the deepest contraction yet. A special watch will be kept on interest rate fluctuations, Díaz de León said.

The Energy Regulation Commission (CRE) announced an increase in the price of electricity transmission services charged to renewable sourced energy producers by the Federal Electricity Commission’s subsidiary Legate Contracts Intermediary (CFE-ILC). The charges will be variable, depending on the capacity of the supplier. CFF-ILC said that current charges do not reflect transmission costs. A request for a raise was filed in 2019.

Federal Judge Juan Pablo Gómez Fierro granted environmental organization Greenpeace a suspension of the Energy Secretariat’s May 15 agreement curtailing clean energy production and will wait until there is a juridical resolution on the issue. Hence, the Energy Secretariat now has to abide by clean energy production regulation policies established in 2017.

Giant retail conglomerate Mexican Economic Foment (FEMSA) agreed with the Treasury Secretariat’s branch Federal Taxation Administration (SAT) to “put an end to differences” on its tax debt litigation. FEMSA paid in cash 8.79 billion pesos, equivalent to about $396 million dollars. The Coca-Cola bottler and owner of 18,000 Oxxo convenience stores made the announcement in a financial report to the Mexican Stock Exchange.

The Mexican peso in the first half of 2020 has zigzagged up and down nonstop. It opened the year at 18.88 to the dollar to soar down to 25.13 at the end of March, with 6.24 more pesos to the dollar, or a 33.12 percent loss. Since then, the peso has bounced back to some degree, closing on Friday, May 29, at 22.23 pesos per dollar.

Sports: Cruz Azul Soccer Team Smeared

The Treasury Secretariat’s Financial Intelligence Unit froze the accounts accounts of Cruz Azul team owners Guillermo and Alfredo Álvarez, as well as those of partnering member Victor Garcés. They are all being investigated on charges of money laundering and organized crime activities.

The lawyers of the accused, however, moved quickly to “unfreeze” the banking accounts of the Cruz Azul Cement Factory Cooperative, as well as that of the soccer team since these affected workers’ payroll.

The ‘Alvarez brothers are suspected of making “irregular transfers” worth 1.2 billion pesos to different tax haven nations.

No arrest orders have been issued to the men, who move the Cruz Azul soccer team strings and lawyers ensured that the payroll funds will be released on Monday, June 1.

Rumors in the soccer world are that the soccer was used to launder money by the “owners” of the cooperative and that the Mexican Soccer Federation is considering disaffiliation.

The investigation was stirred by two former Cruz Azul Cement Company executives, José Antonio Marín and Victor Manuel Velázquez, who had nothing to do with the soccer team.

Soccer Federation regulations, however, impedes persons with proven legal problems from owning a team.

…June 1, 2020