AMLO’s government is broke. Op-ed

Op-ed by Alejo Sánchez Cano for El Financiero

The government of the 4T is without resources to face at least the current expenditure and the main programs of assistance policy. Besides, of course, the three flagship works Santa Lucia, Dos Bocas, and Tren Maya, for the rest of the year.

In the face of the biggest crisis the country has faced, a product of the Covid-19, they only have the trash, but no significant items to address the medical and economic crisis.

Of the 400 billion pesos that the president said were being held back, nothing is known about their existence. Instead, it is known that consumption has fallen; VAT fell by 36.5 percent (compared to 2019); the Special Tax on Production and Services (STPS) on fuel – which had become the pivot to sustain non-oil tax revenues – fell by 26.9 percent, while oil revenues fell by 65.3 percent.

The government already took 21 billion pesos from the Mexico City Airport Trust (imposed by TUA/Airport Use Tax), 4 billion 800 million pesos from the Trust for Stabilization of Parastatal Entities. It also used 24 billion pesos that the Treasury does not state which fund or area they belong to and have already spent, almost 100 billion pesos from the Budgetary Stabilization Fund, from oil, from the State Participation Stabilization Fund.

Various public institutions estimate that (only for May) the fall in budgeted income will be around 120 billion pesos, and in June, it will be more than 30 billion pesos. Therefore, we are talking about a deficit of almost 150 billion pesos.

It is known that 2.2 billion dollars have already entered the public coffers, a product of the five loans from the World Bank; however, the government has not given precise information. Since this international organization reported that the resources borrowed should be used to alleviate the pandemic’s effects, the government of López Obrador is allocating it to other programs.

The truth is that the last five months of the year will be stormy for AMLO since there will not be enough income to cover the Budget for the rest of the year.

Because of this deficit, the Democratic Revolution Party in Congress will propose the elaboration of an ‘alternative budget’ instead of the ‘adjustment’ that López Obrador intends to make to the resource approved for this year since he has run out of funds to cover the remaining five months of the year.

To this end, he is urged to hold another extraordinary session to modify the Constitution and be granted the power to alter the public account without the need to go through Congress.

PRD legislator Antonio Ortega Martínez said that the López Obrador government has already spent the funds and trusts destined to face uncertainties such as the one we are going through in Covid 19 and now “seeks money to the bottom of the heap.”

The economy does not grow only with desires, nor by decrees, but even more so by misunderstood savings. It is increasing because of the confidence that investors have in the country. This has deteriorated since the beginning of the six-year term, with the cancellation of the construction of the Texcoco airport and subsequent decisions to the detriment of the rule of law and the commitments made to foreign companies.