The year 2020 has been extremely difficult for almost every country. But countries like Mexico suffered a far worse fate on the economic front because of the stubbornness of their government authorities. In Mexico’s case, Andrés Manuel López Obrador who took oath as the president two years ago and who belongs to the left-wing, people were hoping that like his thoughts, his implementations and actions will also be freeing and beneficial for the nation. However, it did not turn true when a major crisis hit the world in the form of the coronavirus pandemic.
In a situation where all the governments bucked up to provide economic cushions to lessen the blows that the pandemic was serving the nations with, Mexico saw an opposite response from its government.
President Andrés Manuel López Obrador not only continued to be stubborn but he also actually doubled his policies for budget discipline and his austerity led to increased taxes and cutting on budget spending with extremely minimal relief stimulus. The country that was already suffering through a recession has now further plunged into poverty as its leftist president Andrés Manuel López Obrador is adamant to not spend enough for pandemic relief on its people.
Mexico’s stimulus is the lowest in the group of 20 nations according to an estimate by the IMF
A stimulus comes when either a country’s government gives breaks in taxes or gives some additional spending amount to provide some relief to its citizens. When the IMF looked into a group of 20 countries, it found out that Brazil is providing the maximum stimulus, almost up to 8.3% of their total Gross Domestic Product.
On the other hand, South Africa’s stimulus is up to 5.3% and China’s stimulus to its GDP is 4.6%.
Mexico’s stimulus is at the bottom of this list at just about 0.6% of its total gross domestic product. This is by far, the lowest amongst all, and it further explains the state in which the country is. It points towards their declining economic growth and reveals that their GDP is most likely in a deficit too. Amidst this budget deficit, their President is trying to hold the economy by his teeth, but it does not look like his efforts are working. He is receiving a lot of criticism from the opposition as well as from within his cabinet. His policies are being questioned and his nation is going through the worst recession amidst the coronavirus pandemic.
President López Obrador’s policies stem from different Mexican debt crises that he saw while growing up
To understand the president of Mexico’s point of view, we have to understand that his actions and fears stem from various critical situations in which Mexico’s debt crisis had increased and its economy had seen some major declines during the 1980s and 1990s. This was the time that the president has witnessed himself, and this is what he was attempting to avoid. All these different debt crises caused currency devaluations, huge inflations, and responsible authorities and industries getting severely bankrupt.
The president has time and again criticized other nations for their financial stimulus types that they receive from their governments in the form of credit stores or tax breaks. Even governments’ involvement to prevent different companies from evicting their employees to reduce their workforce and cut costs to make ends meet has been looked down upon by the president. He thinks that these types of the financial stimulus only mean that the poor people are serving the rich people in various forms.
If these actions are questionable, then what his nation is going through now because of his austerity and debt-phobic actions while rejecting any form of fiscal stimulus is also not good and his policies have become highly questionable too!
I’m Ava Paul, an experienced news website author with a special focus on the entertainment section. Over the past five years, I have worked in various positions of media and communication at World Stock Market. My experience has given me extensive knowledge in writing, editing, researching and reporting on stories related to the entertainment industry.