A leader who just won’t spend
Luis Miguel González
Mexico is heading for catastrophe and our president is in denial, said Luis Miguel González. To cope with the economic fallout from the coronavirus shutdown, Germany has announced a package of stimulus measures equal to about 15 percent of its GDP, while Japan and the U.S. have programs equivalent to about 10 percent of their GDPs. President Andrés Manuel López Obrador, meanwhile, has come up with $17 billion—just over 1 percent of our $1.2 trillion GDP. He claims that this is more than enough to rescue our businesses and workers, “because there is no corruption” in government since he took office. Such an assumption would be insane even in a country with excellent health infrastructure. In Mexico, it is beyond irresponsible. We will have to go to the world market “to make panic purchases of respirators, masks, and test reagents,” for which we will pay “dearly, and in dollars.” Meanwhile, many of our provinces are entirely dependent on remittances from Mexicans in the U.S., money that is drying up as those workers lose their jobs. There’s no chance that Mexico will experience a V-shaped recession, with rapid decline followed by rapid recovery. We’ll get “a U, a W, or, in the worst-case scenario, an L shape.” Our economy is about to fall off a cliff, and it may never recover.