Mexico obsession for growth

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The President himself uses the growth of the economy as a great indicator to rate his management

Sometimes, the difference between 0.1 and -0.1 can be the size of an ocean. Especially in public opinion. The figures on economic growth published by INEGI confirmed that the Mexican economy is stagnant, wandering around zero, but it moved away from the ghosts of the recession. The adversaries of the President, Andrés Manuel López Obrador, were waiting for a negative figure to decree that Mexico was walking towards the abyss, and the supporters of the president wanted a figure above zero to use it as a throwing weapon against that commentary that wants the failure of the presidential project. More politics than economics, no doubt.

In Mexico, we have suffered heartbreak with economic growth figures. After the years that extended from the six-year periods of Miguel Alemán and Adolfo Ruiz Cortines to Gustavo Díaz Ordaz (1950-1970), where the Mexican economy grew 6.8% in the context of the so-called stabilizing development, Mexico has not left what the economist Raúl Feliz calls “the damn 2%”. Mexico entered, from the beginning of the neoliberal period in the eighties, in the famous “trap of middle-income countries” where it becomes very complex to overcome structural dynamics that prevent high growth rates. And in the Mexican case, state asymmetries hit the national average even more; For example, in this second quarter of 2019, Sinaloa grew to 6.1%, while Tabasco had a contraction of almost 11 percent of its Gross Domestic Product.

The obsession with economic growth (to reach 4, 5, 6%) has decades. The different presidents put the success or failure of their economic agenda in the hands of this indicator, and the exchange rate. It is the breakdown of debt crises in 1982 and 1994. The strange thing is that a President who qualifies as post-neoliberal has that mania with measuring the success of his management for economic growth. That is, how big the cake is and not how fair the slices are distributed. He made 4%, double the average of the last four-six years, his great promise in economic matters. However, is it the indicator that should obsess us as a country? Growing the cake solves our problems of poverty, inequality, exclusion, precariousness? What has happened to the little growth that the national economy has had since 1982? How many hands have you stayed?

The Mexican is a powerful economy. It is the fifteenth power of the world. To put it clearly, only 14 countries in the world have a bigger economy than the Mexican one. During the six-year period of Enrique Peña Nieto, the economy grew on average 2.4%, however, GDP per capita plummeted 10%. That is, the population grew much faster than moderate economic growth. And, despite growing, inequalities continue to widen. According to the National Survey of Household Income and Expenditure, the richest 10% of the country has incomes that are 18 times higher than the poorest.

In the age range, and between genders, we can also visualize gaps that are intolerable. The young people are in absolute precariousness: a woman between 20 and 29 has an average monthly income that does not reach five thousand pesos. And that same young woman receives a salary that is 32% lower than a man of the same age. The same among our older adults who must overcome life with an income of 5,500 pesos per month, and in this segment of the population – over 60 years of age – the gap between men and women is 48%. Many older adults are being pushed to work as “matches” in supermarkets because of the unworthiness of their retirement.

And inequality between states is pitiful. While in Mexico City, an average family can manage income for up to 26 thousand pesos a month, in Chiapas the whole family does not reach nine thousand. There are voices that believe that the economic progress of a family or an individual, getting out of poverty, is simply a matter of “wanting it.” A matter of will. No, in Mexico, those who are born poor have only a 2.1% chance of improving their economic situation (in Canada it is 13.5%, for example). Surname, cradle, state, class, mark a person more than education or the will to move forward.

In Mexico, 43.6% is poor, according to Coneval data. 53.4 million people, seven times the population of Jalisco. A fifth has an educational and health care lag. Seven out of 10 Mexicans have no social security and a quarter have problems eating three times a day. In Mexico, it was very fashionable to talk about the “spillover effect” of the economy. That is, deregulates, removes obligations to employers, facilitates dismissal and all this will contribute to improving the income of the needy. What stupidity. That obsession with expanding the pie of our economy without thinking about how we distribute it better has led to the fruits of economic growth being left in very few hands.

Gerardo Esquivel, who is now deputy governor of the Bank of Mexico, says it is the “extreme inequality” study: One of the most unfortunate consequences of the pattern of high inequality and political capture by elites in Mexico is that, not only Our country has very low rates of economic growth, but that little growth is also exclusive. Let’s look at a case: between 1992 and 2012, the growth of per capita income in Mexico was 26%; In other words, the annual growth rate was 1.17%. Meanwhile, the rates of heritage, capacity and food poverty remained practically constant throughout those two decades.

And so we could go on: Germán Larrea and Carlos Slim have the same amount of wealth as 60 million Mexicans. 1% of the wealthiest Mexicans have 40 out of every 100 pesos of wealth that exist in the Mexican economy. True, López Obrador is the President who has made visible the inequality, the contubernios, the privileges, but he is still caught in an obsession with the growth of GDP.

It is always important that the economy grows. That is, as a country we are able to attract more investment, export more and that consumption is a lever of development. However, the great national problems of inequality and exclusion are not solved with greater growth, but with better growth. A State that is able to understand that the widening of GDP should not be left in a few hands. López Obrador has to turn to see less who he calls “his adversaries” and more to that Mexico that asked him to build a more just country for everyone.

Source: informador

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