Pensions Take Big Chunk Out of 2022 Budget: The Week in Talent

The strain on Mexico's public finances to cover pension payments will increase in 2022. This week, the 2022 Expenditure Report revealed that most of the budget allocated for the coming year will be used to cover the pension expenses of entities such as the Federal Electricity Commission (CFE) and PEMEX. Similarly, the social programs promoted by the current administration also take up a large part of the budget. In light of this data, sector experts have called for a review of the federal government's pension programs to avoid a major blow to finances in the coming years

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• For the first time in history, the federal government expects to allocate MX$1.4 trillion (US$70.5 billion) to guarantee the payment of pensions to Mexicans, including the elderly over the age of 65, according to figures from the draft of the 2022 Economic Package. The amount represents one-fifth of next year's entire budget of MX$7.08 trillion (US$357 billion). For contributory pensions, which include those of PEMEX and CFE, the amount to be allocated amounts to MX$1.1 billion (US$55 billion), whereas the social programs promoted by President Andrés Manuel López Obrador's government, including the pension for seniors, will receive 52.8 percent of the total resources.

• Amazon is under fire after photos of a new distribution center in Tijuana, Mexico, went viral. The 32,000m2 building located in El Cañón del Padre, a marginal neighborhood, sparked controversy due to the contrast between a multinational company that generates millions of dollars in profits and the houses of those living in precarious conditions. While media criticized the contrast, the Tijuana city council highlighted the benefits of installing the warehouse in that area arguing that it will reduce the cost and delivery times of products in areas such as Tijuana, Mexicali, Tecate, Ensenada and Rosarito Beaches and create jobs. Get the full picture here.

• Formal employment in Mexico saw the best August in its history, reported the Mexican Social Security Institute (IMSS) on Friday. In that period, 128,900 new jobs were created, resulting in a total of 647,091 jobs for the year, of which 87.2 percent are permanent and 12.8 percent are temporary. The economic sectors with the highest annual growth in jobs are transport and communications with 9.3 percent, extractive with 7 percent and transformation with 7 percent.

• Unemployment withdrawals from pension funds (Afores) totaled MX$14.3 billion (US$720 million) between January and August 2021, a figure 14.9 percent higher than the same period in 2020, according to data from the National Commission of the Retirement Savings System (CONSAR). So far this year, pension funds that have registered the highest withdrawals are Coppel and Afore Azteca, with MX$3 billion (US$151 million) and MX$2.5 billion (US$126 million), respectively. In both, the average withdrawal is MX$7,000 (US$352), while in Profuturo the average withdrawal is MX$25,761 (US$1,297).

• The UN Food and Agriculture Organization (FAO) stepped up its efforts to fight one of the most severe problems affecting communities worldwide by addressing food waste. “We cannot end hunger and all forms of malnutrition if we do not reduce a large amount of food that is lost and wasted," says QU Dongyu, Director General of the Food and Agriculture Organization of the United Nations of FAO. Food loss and waste occur throughout the supply chain, from crop to fork. Between the post-harvest and retail phases, about 14 percent of all food produced is lost, argues FAO. “With a large amount of food that is lost and wasted, valued at US$400 billion annually, it could feed about 1.260 million more people a year.” Read the complete article here.