By RICARDO CASTILLO
The exact significance of politically oriented economic moves is inevitably in the eye of the beholder.
This past week, there several events occurred in Mexico that have been interpreted according to different interests.
Businessmen generally consider downsizing a natural move to make a company more profitable
But in terms of government cuts, that same downsizing policy can be seen in a number of lights.
Mexican President Andrés Manuel López Obrador (AMLO), for instance, almost daily in his morning press conference – more of a monologue than a press conference – constantly says that he will not borrow money on behalf of the Mexican government.
The outcry from Mexican businesses demanding “rescue” money is both enormous and loud.
The money would be used in order to create cash flow now, but AMLO says that borrowing now translates into being deep in debt later.
National and international financial organizations are having their say on the issue as well.
For instance, the Organization for Cooperation and Economic Development (OECD), headed by former Mexico Finance Secretary José Angel Gurría, says that borrowing is “manageable” and that the government can handle increased loans.
Responding to that is the central Banco de México (Banxico), which says that the nation’s finances are sound and no further borrowing is needed.
About the only economic problem the nation faces, Banxico says, is the 5.5 percent interest rates it maintains to keep the financial sector afloat.
And, yes, it says, there are enough funds available to survive through the covid-19 pandemic.
Another downsizing measure that was thrown into the political ring this week is the merging of the Federal Telecommunications Institute (IFT), the Federal Economic Competition Commission (Cofece) and the Energy Regulatory Commission (CRE) into one organization to be called the National Markets and Competition for Wellbeing Commission.
Senate Majority Whip Ricardo Monreal presented the bill for the consolidation, which is slated to be voted on when the Senate reconvenes in September.
AMLO outlined what the Senate considers burdensome bureaucracy carrying out similar duties and finally summed his point of view up into a blunt, “I was unaware of this bill, but if it helps to crop down expenditures, I’m all for it.”
National Action Party (PAN) senators, with backing from other minority parties, cried foul, but the matter remains to be discussed in due time.
Nevertheless, there’s no question that AMLO’s budget lawn mower is rolling, in order to keep his campaign promise that he would downsize Mexico’s huge bureaucracy.
Canadian Mining Interests
The Mexican Treasury Secretariat is trying to have an undetermined number of Canadian mining companies pay what is considers overdue taxes.
The Canadian companies are threatening in going to international courts to make their case.
Though this would be a natural issue for the Foreign Relations Secretariat to deal with, the conflict was handed over directly to AMLO, who said, “I take this opportunity to send a respectful message to the Canadian ambassador to Mexico (Graeme C. Clark) to help us convince these companies to nt bother going to international courts if it is very clear that they owe the money to the Tax Service Administration-“
“I hope that he will help us to convince them to pay,” AMLO said, “because it is most timely that with the current pandemic crisis our tax income does not go down. We need to have sufficient resources.”
Apparently, in Canada, these companies are up to date in their fiscal responsibility payments.
Labor Leader Tanked
There might be some political labor turmoil brewing in the Tamaulipas maquiladora industry since the top labor union leader, Susana Prieto Terrazas, who was working for different assembly plants, was arrested on Monday, June 8, and jailed two days later, after a 20-hour-long police interrogation.
Tamaulipas Fiscal General spokesman Ivan Moyole said that a judge had determined that there was enough evidence to change her with mutiny, threats and coercion of private companies and “crimes” against public officials.
Most observers link the arrest to a protest carried out at a judge’s office last March 10 by employees of the Tridonex assembly plant, which led by the unionist leader.
Prieto Terrazas also led a strike movement in Matamoros during 2019 that led to the stoppage of several maquiladoras.
Since the judge determined she has no residency in Tamaulipas, she will face trial while in prison in Nuevo Laredo.
Her home is in the state of Chihuahua, but she has a large following in Tamaulipas.
Governor Given House Arrest
Former Quintana Roo Governor Mario Villanueva Madrid has been granted partial release after serving 19 years of a 22-year sentence in prison, both in Mexico and the United States.
Villanueva was allowed to spend the rest of the “prelibation” red-tape processing under house arrest.
On Wednesday, June 10, he arrived at his home in Chetumal where his wife of 50 years was expecting him.
Mexico’s Investment Grade
In contradiction to several U.S.-based financial analyst houses, analysts from the Banorte financial group said this week that Mexico will not lose its investment-grade status any time soon since it has been divulged by companies like Standard and Poor’s, Moody’s Analytics and Fitch Ratings.
Banorte analysts gave three reasons why Mexico will not lose its investment grade: First, the country’s risk qualification has not yet reached its limits so there is still room for more downgrading. Second, even if some outside experts believe that Mexico should increase its public debt, the government’s decision not to do so can help prop up the country’s investment grade. And, third, currently, many a nation is increasing its debt while Mexico is not, which could give it a relative strength in international markets as of 2021.
Nevertheless, on Thursday, June 11, J.P. Morgan once again lowered the chances for Mexico’s economic recovery, warning that the country’s GDP could fall by as much as 10.5 percent this year.
Sports: Is Ana Guevara Taking Kickbacks?
Two Veracruz businessmen who filed an extortion suit against National Sports Commission (Conade) President and former Olympic medalist Ana Guevara on June 5 were attacked by gunmen on Wednesday, June 10, in the fishing village of Boca del Río, near the Veracruz port.
The businessmen, Rafael Sanchez Cano and Jesús Chain, said they were attacked by unknown assailants who fired rifle shots at their vehicle.
Their tires were all shot flat.
They said they filed a corruption charges suit against Guevara after she conditioned awarding them a food contract for sports persons in exchange for 16 million pesos in kickbacks.
Allegedly, Conade sold the food contract to a different company.
Police looked for the assailants to no avail.