The Mexican Nightmare: Five Aspects of the Coming Crisis

The problems were already here. The pandemic “only” exposed their depth and complexity, leaving a broad spectrum of issues. 

The COVID-19 pandemic has abruptly revealed the social organization, institutional, leadership, and crisis management capacities of governments around the world; these differences explain why the same virus has had such different results in China, South Korea, Italy, Germany, the United States and … Mexico.

In this article, we will review the five issues the coronavirus pandemic revealed in Mexico. 

1. The Pandemic. – In addition to generating a health crisis, covid-19 has shown other underlying critical situations in the country. In other words, the problems were already here, and the pandemic has exposed their depth and complexity, leaving a full spectrum of issues underway on whose response the country’s social and institutional trajectory in the coming years will depend.

The virus has hit society with serious public health problems, Mexico has a population with 72.5% obesity and 13.1% with diabetes, low coverage, insufficient quality of primary care and hospitals, high costs, and unequal resources and financing (OECD 2019). These problems are addressed by a rickety public health system that is the product of years of neglect with only 1.4 hospital beds and 1.2 (doctors/nurses) per 1,000 inhabitants, which has been looted by corrupt structures leaving Mexico as a cemetery for white elephants. In the words of Undersecretary Hugo Lopez-Gatell in December 2019, “there were more than 320 health units, from all institutions throughout the country, that had remained unfinished.

The current administration stopped the purchase of medical supplies and proposed to rethink the health sector through the creation of the Institute of Health for Welfare (INSABI). Founded on January 1, 2020, its goal is “to provide free quality health services to all people in the country who do not have social security, will be done under criteria of universality, equality, and inclusion. (gob.mx), with the consequent political dispute with the governors of the country’s states, pharmaceutical companies, civil society, and the cost of learning that any change in public administration entails.

To these conditions, we must incorporate the fact that Mexico is the country that has done fewer tests. Undersecretary Lopez-Gatell explained in an interview that the results are a sample and that the real figure is obtained from a “factor of expansion” since the virus has a specific behavior that can increase the cases by 10 or 20. This discrepancy undermines the credibility of official data at a critical moment in crisis management and opens up a clear divide between society. 

Local and federal governments such as Baja California, Tamaulipas, Michoacán, and Jalisco have denounced the deliberate under-registration of cases at the national level. 

These conditions mean that even though as of May 9, 2020, the official figures register 33,460 infected and 3,353 deaths. The mortality rate in Mexico is high at 8.3%, so a peak in new cases is expected. Although if we consider the “expansion factor” of undiagnosed cases by the Ministry of Health’s sentinel model, the actual figure could be much higher.

2. The economic crisis. – In the year 2020, the world economy will fall by around 3% (IMF). Mexico will suffer the worst economic crisis in its recent history after in 2019 growth was 0.1% and by 2020 financial institutions expect a fall in GDP between -7% (Moody’s), -9% (Citibanamex) and -12% (BBVA), as a reference, the closest precedent is the year 1995 when GDP fell by -6.3%. The depth of the crisis will depend on the extension of the quarantine, the time in which the U.S. economy recovers, the activation of the national productive plant, and the recovery of oil prices, among other factors.

This crisis is here already beginning to be felt, according to the federal Secretariat of Labor from March 13 to April 6 347,000 formal jobs were lost. According to the general director of Citibanamex Manuel Romo, the bank estimates that the unemployment rate in Mexico at the end of 2020 will be 7% or about 1’750,000 unemployed, also business associations Canacintra and Concanaco Servitur estimate losses of 2 million jobs.

The most damaged sectors have been: food and beverages, manufacturing due to the slowdown of the productive chains. Raw materials have had a reduction in demand due to the confinement at an international level. The brake on economic activity has severely affected the service and tourism sector, complicating the life of micro, small and medium enterprises that have received this financial blow without support from the federal government that has used the tools of economic policy.

The federal government has been consistent in its message: the measures to attend this crisis will come from the austerity reflected in a reduction in the expense of the public administration, direct delivery of subsidies to vulnerable sectors, and the infrastructure works like the Tren Maya or the Dos Bocas refinery. The Bank of Mexico was capitalized by 750 billion pesos to inject liquidity into the financial sector, and the SHCP made a bond placement that cost the country more due to the degradation of the country’s public debt by the rating agencies Fitch and Moody’s.

3. The security crisis. – before the quarantine, according to the most recent National Survey of Urban Public Security (ENSU) of March 2020, 73.4% of the population 18 years and older feel unsafe in their city; 80.8 % feel dangerous at the ATM and 73.5% in public transport. A last significant data, 34.5% of the population, considers that crime will remain the same, and 32% believe that it will get worse.

Sadly, according to official data, gender-based violence has continued, with 244 victims of femicide and 720 murdered women registered as intentional homicide, with a total of 964 cases between January and March 2020, the most violent period since the count was taken. With the confinement, an increase in domestic violence of 30% and even 100% have been reported according to state reports of 911 calls. Both social perception and domestic violence are social phenomena that predate the pandemic and have increased in both cases.

On the other hand, new criminal niches are also emerging, such as looting, which at the end of March, there was a wave of 54 incidents of looting and robbery in self-service stores in different parts of the country. However, those carried out in the metropolitan area of Mexico City ran with greater success than those in other latitudes. But unlike the vast majority of crimes, these were dealt with promptly, managing to arrest 95 people (Guerrero) and, above all, with the use of intelligence tools, the small groups that carried out the calls by networks to carry out the looting and steal products to sell, not necessities, were deactivated in time. Although these small groups were disabled, the potential for new waves of looting is there.

In March 2020 and despite the quarantine, according to the National System of Public Security, 3,078 homicides were registered, making it the record month with the most deaths. This trend continues during April when 603 intentional murders were committed during the week of April 17-23, illustrating that confinement does not apply to the crime that maintains high levels of violence.

4. The political crisis. – During the crisis management of the pandemic, the relationship between López Obrador, the political actors, and society has become tense. Since the beginning of the epidemic, the President had shown great disdain for the current health crisis. Two days before the federal government declared phase 2, the 66-year-old President with hypertension, invited the population to go out to restaurants and hug each other during a tour, sending crossed messages. An official figure, which encourages social activity while his administration requests to take the proper precautions.

AMLO has used his presidential power to promote his political project, relegating other opinions and spaces. It has come to the point that the governors of the northeast of the country (Coahuila, Nuevo León, and Tamaulipas) have created a front against the pandemic that has contrasted the management of crisis with the federal government and together have put in the public agenda the debate on the federal fiscal pact that supposedly already joined 21 states of the republic (El Financiero Diario).

Multiple voices have been heard, public and private, national and international, inviting more significant participation of the State in the safeguarding of formal jobs and the economic reactivation. The President has refused. His statements go back to the same place: Mexico’s private initiative is its enemy.

5. The crisis in the United States. – In Mexico, there is an old saying: “If the United States gets a cold, Mexico will get pneumonia.” The economy, as a large part of the social dynamics in Mexico, has asymmetric interdependence with the United States, although, at the political level, there is a good relationship. Currently, both economies are facing a pandemic of severe consequences for the United States, where the IMF estimates a fall of -5.9 of the GDP, so it is necessary to see the effects of the Covid-19 crisis there to gauge the consequences here. 

In addition to the disruption of the North American supply chain, which is having a severe impact on the logistics of production and which is pushing for the reopening of some manufacturing sectors, the economic consequences in the United States are seen in the very high unemployment rates that have already reached 26 million in the last five weeks, many of whom are Latino due to their condition as a vulnerable population and not counting the undocumented who are also affected by this phenomenon. Finally, in any scenario of economic crisis, a wave of social anger is unleashed that is oriented towards vulnerable populations. This fact added to the tense presidential campaign in November could bring an even more complex scenario for the fellow countrymen and the bilateral relationship in general.

Mexico is on the edge of the abyss as never before in its ancient and modern history. We have an inferior public health system, crime rates that are choking us more and more every day, a country in economic crisis, with a president who has a grudge against those who generate jobs, no leadership or a real government plan, and our neighbor and largest trading partner in a terrible situation.  

The future looks bleak.

Times Media Mexico / The Yucatan Times
Editorial Board



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