March 5, 2021
1. Reform to the Law on the Electricity Industry is passed, negative consequences are expected for the sector
The Mexican Senate approved the initiative that reforms the Electrical Industry Law proposed by President Andrés Manuel López Obrador, so that only the signature of the President and subsequent publication in the Official Gazette of the Federation is pending.
International business organizations have warned of a harmful domino effect in the value chain of industrial and commercial sectors committed to sustainable and competitive energy. The Undersecretary of State, Jon Piechowski, declared that the US will be respectful of Mexican sovereignty, but asks for transparency to give certainty to US investors.
2. Budget revenues have their worst fall since 1993
Public sector budget revenues totaled 492,451 billion pesos (USD$23 billion), falling 14,921 billion pesos (USD$700 million) below the estimated amount for the period. Revenues captured represent a 12% drop compared to January 2019, being the worst recorded numbers since 1993, according to data from the Ministry of Finance and Public Credit.
On the other hand, the Bank of Mexico (Banxico), improved its outlook for the national GDP from 3.3% to 4.8%; even the most optimistic scenario points to a recovery of up to 6.7%. Banxico attributes this upward outlook to a higher growth base at the end of 2020 and a higher growth forecast for industrial activity in the United States.
3. The President calls for a National Democracy Agreement
President Andrés Manuel López presented the National Agreement for Democracy, whose purpose is to guarantee elections free of corrupt practices. The Morenista governors of Chiapas, Baja California, Tabasco, Veracruz, Morelos and Puebla, as well as the head of government of Mexico City formalized their adhesion to the Agreement. Likewise, 6 governors of the Institutional Revolutionary Party (PRI) expressed their decision to join: Tlaxcala, Estado de México, Hidalgo, San Luis Potosí, Oaxaca and Zacatecas.
On the other hand, the National Electoral Institute (INE) through the Commission of Complaints and Denunciations ordered a precautionary measure via preventive guardianship against the political party Morena, with the objective that its brigades refrain from requesting information from citizens regarding their voter credentials and not to link the party with social programs from the federal government; specifically in the case of the vaccination against Covid-19.
El Universal: Ordena INE a Morena no utilizar programas sociales.
La Razón de México: Se suman a acuerdo de AMLO 23 Gobernadores
4. Presidents Andres Manuel Lopez and Joe Biden held virtual bilateral meeting
On March 1st, Mexican President Andrés Manuel López Obrador and U.S. President Joe Biden held a virtual bilateral meeting to discuss cooperation mechanisms on migration issues and ways to advance joint efforts to promote development in southern Mexico and the Northern Triangle of Central America.
Both leaders pledged to promote migration policies that recognize the dignity of migrants, as well as the need for orderly, safe, and regular migration. They also reaffirmed the importance of close collaboration to respond to the COVID-19 pandemic, particularly in areas related to economic and health cooperation.
Gobierno de México: Declaración Conjunta México – Estados Unidos
5. Federal government demands compliance for outsourcing
Carlos Romero Aranda, head of the Federal Attorney General’s Office, stated that after the first 12 criminal complaints were filed for illegal outsourcing, the companies that had contracted one of the largest evading groups in the country have cancelled their relations with the group. In this regard, it should be noted that the construction of the Dos Bocas refinery is in the hands of an outsourcing company: PTI Development Infrastructure (PTI-ID).
The companies that had contracted outsourcing services must regulate their situation before the Mexican Social Security Institute (IMSS) and the Tax Administration Service (SAT) and pay the local payroll tax, otherwise they will face criminal consequences. Romero Aranda explained that in the lawsuits, tax fraud can be accredited as organized crime and crimes against national security that merit official preventive imprisonment.