Thursday, June 13, 2024

President dismisses 3rd call by business group to modify economic strategy

President López Obrador has rejected a new call from an influential business group to offer greater support to the private sector amid the coronavirus-induced economic crisis.

The Business Coordinating Council (CCE) called on the government to increase public debt to support business as it confronts the sharp economic downturn caused by the coronavirus pandemic and the measures put in place to contain the virus.

“The country must take on greater public debt to reactivate the economy. … We all believe that we should take on debt in a responsible way,” said CCE president Carlos Salazar Lomelín.

The CCE, an umbrella organization representing 12 business groups, has called on the government on two previous occasions to modify its economic response to the coronavirus crisis, charging that it doesn’t do enough to support businesses and protect jobs.

According to López Obrador, the business group wants the federal government to commit to bailing out large companies that might collapse due to the coronavirus crisis, something that he has pledged his administration will not do.

Until recently there was frequent dialogue between the president and Salazar
Until recently there was frequent dialogue between the president and Salazar. Today there is none.

“We’re not going to continue with more of the same. If a company goes bankrupt, the owner should assume responsibility, or the partners or shareholders, because the state has to protect everyone; it would be immoral to use the state to bail out companies or financial institutions that are bankrupt,” he said at his regular news conference on Thursday.

He also ruled out any possibility of allowing big businesses to delay their tax obligations because such a move would reduce the government’s capacity to support Mexico’s lower classes.

López Obrador, who has pledged to provide greater economic support for the nation’s poor during the pandemic by increasing welfare spending, stressed that there will be no privileges for big business.

The CCE, which published a list of 68 proposals to respond to both the health and economic crisis, has the right to voice its opinion, the president said. However, if the business organization thinks that things will return to how they were in the past when companies were bailed out and bank debt was converted into public debt, they’re dreaming, he said.

López Obrador also said he had no plans to meet with the CCE leadership, suggesting that they should conduct their dialogue with the government through the Economy Ministry. The differences between the government and the business group cannot be resolved “in private” or “in the dark,” he said.

With regard to the reopening of the economy, the president said that the government will present a timetable on Monday. Normal economic and educational activities should be able to recommence on May 17 in areas of the country where there are no reported cases of Covid-19, López Obrador said.

“The pandemic has grown but there are entire regions where there are no cases. There, with a lot of care, … we could [re]start activities, it will depend on … [what happens] in the coming days,” he said.

Mexico recorded its worst day of the pandemic on Thursday, with almost 2,000 new cases and 257 additional coronavirus-related fatalities reported.

However, as López Obrador pointed out, the pandemic is not affecting the country uniformly. More than half of the almost 30,000 confirmed cases were detected in just three entities – Mexico City, México state and Baja California – and the same entities have recorded 44% of the almost 3,000 Covid-19 deaths.

Ten states have reported fewer than 300 coronavirus cases among which two – Colima and Durango – had fewer than 100 as of Thursday.

Source: La Jornada (sp), Forbes México (sp) 

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