New world crisis is coming and Mexico is in danger, according to UNAM

Mexico has no way to cope with the impending global crisis that is approaching, according to the most recent work of the Multidisciplinary Analysis Center (CAM) of the National Autonomous University (Unam)

From the analysis of the budget of expenditures of the Federation for the year 2019, the researchers reviewed the budget management of the economy and found a series of failures whose consequences promise to be difficult.

“The Mexican government has no money to manage the economy, it is only making transfers from one side to another; as well as many of the old vices that had previous administrations in the management of resources, they remain as is,” said to economist and researcher David Lozano Tovar.

For Lozano, it is expected that the crisis to come will be even deeper than that of 2008, which broke out after the explosion of the real estate bubble in the United States shortly before.

“The problem is that now it is not known where it may explode. There are indicators that there is a very large economic bubble , the problem is knowing where it is located to also know how to attack it,” he said. 

In an effort to identify the problem and move towards new unconventional responses “that will overwhelm economists” – in Lozano’s words – CAM researchers work on a series of reports titled Mexico: a crisis is coming. Such studies seek to pay attention to the processes of capital accumulation in the country.

The effects of North American integration

Researchers start from the development of the effects in the last four decades of the process of strategic integration from Mexico to North America, which was characterized by: 

  • the displacement of Mexican investors by the transnational power, mainly American, that used the local labor force – which is cheaper – in the territory and changed the face of the “Mexican industry”;
  • the use of parastatal companies to lower their costs;
  • the use of a network of natural resources of current and potential exploitation;
  • the restriction of the standard of living of the population to support the distance in wages, while public structures of health, education, housing, and food were cut. 

“Thus, the general law of capitalist accumulation in North America is” the greater the accumulation of capital on one side, the greater misery and poverty on the other, “the report considers. Therefore, “a change of administration in Mexico is not necessarily a change in the accumulation of capital,” since the identified failures are recurring in governments of “different colors” in Mexico. 

Peña Nieto and López Obrador: the same?

This first report of the CAM series is specifically focused on the administrative branches and programs with which the Government operates. According to the document, these are areas that represent 13% of the Federal Budget and total almost 40,000 million dollars.

Through a transparency platform called Compranet, researchers reviewed government expenditures on almost 1.5 million contracts signed between 2013 and 2019. Thus, they could see that the current forms of contract award remain the same as in the previous management. 

Moreover, if under the presidency of Enrique Peña Nieto, the “direct award” modality was used in 74% of the analyzed contracts, as far as the mandate of Andrés Manuel López Obrador (better known as AMLO) “this modality It is proportionately larger, “they say. 

Also, the researchers found that there are 200 suppliers or companies that concentrate 68.8% of government purchases. “Of those suppliers, 150 had already been privileged in at least some of the years that Peña Nieto ruled,” they explain. 

What will happen to Mexico?

“What we see there is that we are approaching a real problem of the economy, which is systemic and global, but we do not believe that there are alternatives now if unconventional solutions are not sought,” Lozano said. 

If the trend of centralization and granting of contracts to very few companies continues, the economic spill that is intended – by investing about 8,500 million dollars in infrastructure and advancing government purchases – “will not have an effect that can be disseminated by the whole of the Mexican economy, “they said. 

“On the contrary, it will continue to promote an imbalance and inequality between large companies that provide the Government and the huge set of small and medium-sized companies that make up the majority of the country’s producers,” they concluded.

Source: unam, mundo.sputnik

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