Business leaders have challenged president-elect Andrés Manuel López Obrador’s claim that Mexico is bankrupt.
Speaking Sunday at a rally in Tepic, Nayarit, to launch his so-called “Thank You Tour” following his landslide victory in the July 1 election, López Obrador said the current state of the nation’s finances could limit what his government can accomplish but pledged that no campaign promises would be broken.
“We’re going to honor our commitments and we’re not going to fail the people of Mexico. Possibly due to the circumstances, because the country is going through a very difficult economic and social situation, possibly due to the bankrupt situation the country finds itself in, we won’t be able to achieve everything that is being demanded but we are going to achieve, let it be clear, everything, everything that we proposed in the campaign,” he said.
The comment contrasts with the incoming president’s statement earlier this month that there is economic stability in the country.
Responding to the president-elect’s remarks, the president of the Business Coordinating Council (CCE) accepted that Mexico has to confront a range of challenges but rejected the bankruptcy label.
“We have enormous challenges: security, efficiency of spending, [the need] to invest in connectivity, [to develop] more talent, but the government has never stopped paying its international commitments and there is the possibility of growing at 4% if the right public policy is made. There are options to believe in a promising future,” Juan Pablo Castañón said.
Addressing the same business conference, the chairman of Kimberly-Clark de México, Claudio X. González, also contested the use of the word bankrupt.
“Mexico is not bankrupt . . . I’m very optimistic, if you read everything that he [López Obrador] said in this very dramatic comment, he is beginning to explain that he won’t be able to achieve everything because there is not enough money to do everything, there are not enough resources or time,” he said.
“I don’t agree with the use of this adjective, but I do agree with the fact that we have to be realistic that he will not be able to do everything . . .” González added.
“What I think he’s trying to point out is that there are very difficult situations, without a doubt, security is one of them, impunity is another, the energy situation . . . is something that he has to act on immediately . . .”
The business leader declared that López Obrador has to find a balance between “pragmatism and preaching” in order to stimulate confidence, which in turn will encourage investment.
“The balance will be crucial because we won’t be able to build the investment we need without confidence — the most important word for investment. We need pragmatism to drive investment,” González said.
Gabriela Siller, head of economic analysis at financial group Banco Base, said that government debt in Mexico currently stands at 44% of gross domestic product (GDP), which she described as high, but she added that the country isn’t bankrupt because it has the capacity to meet its financial obligations.
She interpreted López Obrador’s remark as a nod to the fact that the incoming government — which will take office on December 1 — will have limited resources to play with and will therefore need to carefully prioritize its spending.
“If he wants to do new projects, he will have to make cuts to government expenditure in some areas in order to be able to increase in others.”