Flu-conomics: Mexico After the QuarantineBy Alessa Flores | Tue, 03/24/2020 - 12:27
This morning, President Andrés Manuel López Obrador, accompanied by the national health authorities, announced that Mexico is entering Phase 2 of the COVID-19 pandemic. This means that Mexico is transitioning from only cases of COVID-19 derived from imported contagion to cases of local contagion. Health authorities identified and reported five cases of local contagion, accounting for only 1 percent of the total 367 confirmed cases in the country.
Following recommendations from the World Health Organization (WHO), Mexico emphasized that this second stage, where there are already local infections, will be key to controlling the transmission of COVID-19. López Obrador and Deputy Minister of Health, Hugo López-Gatell, highlighted the importance of the Jornada Nacional de Sana Distancia (National Social-Distancing Program) to flatten the contagion curve. However, beyond health measures, the president’s morning conference also addressed the issue of how to protect the national economy.
Minister of Finance Arturo Herrera has announced that authorities are acting in a coordinated manner to implement a health and economic impact mitigation plan. Regarding SHCP, the Minister informed that the Ministry granted an additional MX$4.5 billion (US$179.7 million) to SEDENA and the Navy to continue with the National Development Plan II and Plan Marina to face the coronavirus pandemic. These resources should enable and strengthen the strategic points of medical care and increase access to hospital infrastructure, medical staff and the necessary supplies for those in need.
In addition, SHCP announced that it had already transferred almost MX$15.3 billion (US$608.6 million) to all states for the January-March period and that it would also advance the transfer of MX$10 billion (US$397.8 million) corresponding to the April-June budget, so the corresponding governors and authorities can support their population during the crisis.
The president announced the actions that will be taken to protect employment and help SMEs to brave the economic impact of COVID-19. In the case of the elderly, a decree will be signed today by the president to ensure that pensions and benefits are available to everyone without excuses. The president also requested companies in the country to have solidarity and to avoid firing people and to allow vulnerable people with chronic diseases and pregnant women to enjoy their salaries and benefits during the quarantine.
During the president’s morning conference, it was also pointed out that Mexico has advantages derived from López Obrador’s anti-corruption strategy that saved the country more than MX$400 billion (US$15.9 billion). This fund will allow authorities to maintain welfare programs and, in turn, will provide flexibility to deal with the fall in oil prices and keep gasoline prices at around MX$17 (US$0.68 cents) per litre. López Obrador announced his administration will continue with the construction of infrastructure projects, among them the Dos Bocas Refinery, the Mayan Train and the airport, which will be necessary for the economic recovery of the country.
López Obrador stressed that loans without interest or with very low-interest rates will be granted to a million micro-businesses that have been affected by the COVID-19 crisis. Though support for micro-enterprises such as workshops, taco shops and food stalls has been announced, SMEs still await for similar support from the government, which would also mean a significant contribution to the country's employment and GDP.
According to the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF), in Mexico there are more than 4.1 million micro-enterprises that contribute with 41.8 percent of total employment, while there are 174,800 small companies and 34,960 medium companies that represent 15.3 percent and 15.9 percent of the national employment. Together, these MSMEs represent 52 percent of the country's GDP.