Any public action is worthy of the opinion and, as the case may be, anger and satisfaction just to mention a few emotions, of the citizens that we feel affected in some way, by the impacts that such public actions can generate in personal, economic, partisan and / or collective terms. This is the case, the Quarterly Report and Emerging Plan for Welfare and Employment by COVID19 presented yesterday by the President of Mexico, in which the various public and private opinions have not been kept waiting. It is worth mentioning that societies move forward civilly as they are diverse and pay for debate and reflection.
It should be noted that the Mexican Government (like any government in the world) is yet one more economic player, as well as families, businesses and the external sector; the Government carries out its own activities, with the obtaining of income (tax collection and debt contracting) and the exercise of the expenditure, to simplify it in some way. In the performance of its activity, the Mexican Government defines the economic role to play, in that sense it should not be forgotten that the particular case of the Federal Government has ruled for a broad social sense, which represents that public money must be in the interest of Mexicans and Mexicans with lower incomes.
Such an inclination of Federal Public Expenditure and in general the programs and actions of the same, could not be different, and not only because of the volume of vote obtained by the now President of Mexico in the 2018 electoral process, in which such a situation was announced in the event of access to the Government of the country, but because the levels of inequality and poverty in Mexico are otherwise troubling; and for sample, CONEVAL data, which indicate that in 2018 there were 61.1 million Mexicans in poverty (almost half of Mexicans); as well as World Bank data, which indicate that only 1% of Mexicans account for 43% of total wealth in Mexico (half of the wealth); that is, half of Mexicans are poor and very few rich concentrate half the wealth.
Perhaps it may be difficult for the reader to understand, since for at least the last 35 years the center of the economic policy of the Mexican Federal Government focused on the use of public resources for the stimulus, acceleration and promotion of business activities, while the use and execution of the public resource in social development had a different approach to the current one. I am not pointing out that the Federal Government disqualified business, I am just trying to state that the priority of the business is the fate of public resources with social rather than business meaning, taking as support the poverty and inequality data mentioned.
What about the title of the article?
On April 05th came, I personally got the impression that the business sector at various levels (but the one with political participation, not the one that is taken as the one that is “most” in need of support under COVID19) orchestrated a campaign of attention to what is announced today the President of Mexico; in the idea of generating the expectation of extension or forgiveness in the payment of federal taxes, soft or undersized credits, subsidies to certain economic sectors and general stimulus and support for the business sector would be announced today; that is, public money to the business sector due to the losses they have had and expect to have due to COVID19.
It is worth mentioning that the implementation of the expected measures have two impacts on the public finances or finances of all Mexicans, to waive or extend the payment of taxes decreases income or public money available; whereas public spending for subsidies and credit to the business sector that were not considered means distracting with such objectives the resources that were scheduled for other purposes (same as caring for the health emergency itself in medical terms and the aforementioned poverty and inequality).
In other words, part of the business sector was hopeful of a reorientation of public spending or failing that the expansion of public spending through government debt procurement. First, the writer considers that this is a part of the business sector because at least in the President’s speech it is announced that in the next
week will present an investment plan in conjunction with the private initiative (the other part); and secondly, just a fraction of the title of the present “socialize losses”, since, through the reorientation of spending or contracting debt, the public money that cushioned the business losses by COVID19, would be paid by all Mexicans. From the “privatize profits” fraction, the meaning is clear.
This time I close with an invitation to reflection, that whoever reads me idealizes me the day after the overcoming of COVID19, what our life will be like in general terms and in particular, as will be life for the two potential beneficiaries, in this health emergency, of the public actions that have been soon pointed out: the entrepreneurial beneficiary and the social beneficiary. Surely it’ll be hard for both of us that day after. Personal reflection is the most valuable one.
*The author is An Economist, Master in Administration and currently holds a PhD in Administrative Sciences. In addition, he has published scientific articles and has been a speaker at international events on issues related to public finances and applied economics.
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