September 18, 2020
1. Federal government raffles presidential plane
As part of Mexico’s independence festivities on September 15th, the symbolic raffle of the presidential aircraft was held. The president refused to use the presidential plane, a new Boeing 787, because he considered it a “pharaonic” luxury of past administrations.
The National Lottery reported that 4,685,800 tickets were sold, totaling MXN $2.34 billion (USD $111.5 million). Recipients of the 100 prizes valued at MXN $20 million each included hospitals belonging to the Institute of Health for Welfare and the Institute of Security and Social Services of State Workers, as well as schools and other organizations.
2. U.S. urges Mexico to fulfill international commitments to combat drug trafficking
This Wednesday, the White House issued a memorandum with a list of countries flagged for producing or serving as transit points for drugs entering the United States, including Mexico, Colombia and Venezuela. The document calls on Mexico to demonstrate substantial progress in the fight against drugs, or the country would be at risk of non-compliance with international drug control agreements.
Mexican President Andrés Manuel López Obrador assured that Mexico will not confront the United States government and that it will seek to tread carefully with its statements, as a result of the upcoming November presidential elections. On the other hand, the Ministry of Foreign Affairs activated consular protection mechanisms and requested information from the U.S. government regarding human rights violations at immigration detention facilities in Georgia and Texas.
3. OECD forecasts sharp drop in Mexican GDP for 2020
The Organization for Economic Co-operation and Development (OECD) projected that Mexico’s GDP will decline by -10.2% in 2020, a figure surpassed only by countries such as Argentina (-11.2%), South Africa (-11.5%) and Italy (-10.5%).
The OECD also notes that, because Mexico has a small tax base and contingent liabilities, the country has a very short fiscal margin to support actions that would spur economic growth. On a similar note, CitiBanamex experts say that recovering Mexico’s GDP to pre-pandemic levels will not be expected until 2025.
El Economista: OCDE prevé desplome de 10.2% en el PIB de México
El Economista: PIB per cápita tardaría hasta 10 años en recuperarse, estima Citibanamex
4. Tamaulipas governor accused of links to organized crime
This week, journalist Óscar Balderas released a file from the U.S. Federal Bureau of Investigations (FBI) pointing out current Governor of Tamaulipas, Francisco Javier García Cabeza de Vaca as having held meetings with notorious drug trafficker Joaquín “El Chapo” Guzmán and former public security secretary Genaro García Luna.
The Governor of Tamaulipas has been identified for links to organized crime and various accounts point out that he and his family are under investigation for money laundering. The governor has rebutted, stating that the accusations have electoral motives. Meanwhile, former public security secretary Genaro García Luna faces legal proceedings in a court in New York for criminal association and will appear before the judge on October 7th.
5. Pension spending limits health budget
On September 8th, the government presented the 2021 Economic Package, which contains an increase in the health sector’s budget of 9.1%. The Institute of Security and Social Services of State Workers (ISSSTE), however, will allocate 70% of its budget for the payment of pensions, while the Mexican Institute of Social Security (IMSS) will devote 60% of its resources for the same purpose.
Experts point out that allocating health sector resources to pension payment limits spending on other areas such as investment in hospital infrastructure, which will experience a -22.3% cut compared to the previous year.