MEXICO CITY (CEESP) – In its weekly analysis, the private agency stated that direct transfers increase the dependence of the most unprotected population on them, without incentives to break the cycle of poverty.
Faced with initiatives aimed at dismantling institutions such as the Bank of Mexico and the Judicial Branch, among others, Mexico is heading towards “populism” that empowers the Executive, divides the population, and increases poverty, said the private sector.
“The federal government has succeeded in raising awareness among the population, especially the less well-off, who are also the majority, making them dependent on official programs. This has led to the omission of the mistakes made by the authorities in terms of public policies, avoiding penalizing the government,” the Center for Economic Studies of the Private Sector (CEESP) analyzed.
In its weekly analysis, the private agency stated that direct transfers increase the most unprotected population’s dependence on them, without incentives to break the poverty cycle.
“Current trends indicate a path to populism. There are signs of dismantling institutions and concentration of power, typical of populist regimes that sometimes end up being autocratic,” Mexico is heading towards “populism” with the dismantling of institutions – Center for Economic Studies of the Private Sector explained in its analysis.
According to the speech of the authorities, “it would seem that the economy is going well and, as the President affirms, the strategy implemented by his administration has given results. However, the economy is not in good shape. Many indicators corroborate this.” Assured the organism that belongs to the Business Coordinating Council (CCE).
Early last month, it was announced that the country was recovering from the pandemic’s effects and even that interest in Mexico from foreign investment had increased.
However, based on recent information from Inegi, the GDP accumulated an annual drop of 9.6% in the first nine months of the year, which is considered the largest decline since the 1930s (when statistical information was not as reliable). In addition to the partial or total closure of many activities and businesses, this reflects the drop in investment that has been accentuated since mid-2018 in the face of multiple confusing signals, to say the least, that have generated more significant uncertainty and distrust.
In September, gross fixed investment fell at an annual rate of 18.0%, a more significant reduction than the previous month’s 16.3%. The labor market has suffered from the contraction and the effect of the pandemic – and the lack of investment at the last minute – which led to a historic loss of jobs and an apparent precariousness of the labor market and poverty, private sector analysts detailed.
In contrast, populism uses various strategies to convince citizens that their actions aim to defend the interests of the people, meaning the majority and the most economically disadvantaged.
“He (López Obrador) normally uses a discourse that divides society by making anyone look like an enemy against official ideas. AMLO takes advantage of popular support to modify various aspects of the political and economic system, which often leads to the dismantling of institutions to strengthen the Executive Branch or its equivalent,” warned the Center for Economic Studies of the Private Sector (CEESP)
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