Mexican Government Announces Plan to Protect WorkersBy Cas Biekmann | Mon, 04/06/2020 - 14:33
Most of Mexico’s population is now staying home. After Mexico’s government declared a "health emergency due to force majeure," many companies were forced to shut their offices. The potential damage to the economy is significant. Therefore, the government is taking action.
According to El Economista, the government plans the following:
- To hire 45,000 doctors and nurses to reduce the staff gap in the health sector
- To create a fund of MX$35 billion (US$1.4 billion) from ISSSTE to deliver personal loans to 670,000 state employees
- To issue certificates of MX$177 billion (US$7.14 billion) in credits from FOVISSSTE and INFONAVIT to the benefit of 442,500 workers
- To project 270,000 new jobs by activating housing loans from FOVISSSTE and INFONAVIT
- To issue at least 2.1 million personal loans for housing and small businesses in the formal and informal sectors of the economy
- To create 2 million jobs by December 2020
President López Obrador announced that the economic recovery will start soon. He said that government measures would stimulate investment and ensure that small family businesses, where people earn some type of daily income, would not go bankrupt. “We are not going to leave them without a home,” López Obrador said.
El Economista reported that experts were concerned about the structure of the plan. Although the plan mentions credits and certificates being issued, it does not go into detail as to how, when and to whom they will be awarded. Furthermore, experts warn that additional measures are needed to protect jobs. Among the arguments, the president mentioned the slashing of salaries of higher government functionaries, which is more of a populist measure according to experts. Professor in economy at UNAM, Hilda Rodríguez, warns that Mexico cannot necessarily compare itself with Europe or the US. In Mexico’s case, 80 percent of the economy relies on micro and small enterprises. As they have the lowest savings, they need the most urgent assistance.
Carlos Ramírez Fuentes, Director of Business Development at Integralia Consultores, said the plan lacks details on how it estimates that 2 million new jobs could be created. "There is no new announcement, there is no rectification of any measure that could be thought to have been rethought. There is nothing,” he told El Economista, comparing this goal to an empty promise. Experts do note positive measures in the energy sector, due to combined efforts from the private sector and the government, leading to a positive reactivation of the industry. Opinions on the government’s plan, therefore, remain very much divided.