- \n
- Mexico will likely elect a woman as its next president, but the new leader is expected to face financial limitations due to commitments initiated by President Andr\u00e9s Manuel L\u00f3pez Obrador.<\/strong><\/li>\n
- L\u00f3pez Obrador has proposed new and expensive projects in the closing months of his administration, leaving big-ticket projects unfinished.<\/strong><\/li>\n
- Officials warn that the next administration will inherit a country with a financial hole, requiring fiscal adjustments in 2025.<\/strong><\/li>\n<\/ul>\n
Mexico is almost certain to elect its first female president in June \u2014 both leading candidates are women \u2014 but it\u2019s almost equally as certain that she won\u2019t have much room to act independently of outgoing President Andr\u00e9s Manuel L\u00f3pez Obrador.<\/p>\n
The populist president has continued proposing new, expensive projects in the closing months of his administration, before he leaves office on Sept. 30. He will also leave a lot of big-ticket projects unfinished.<\/p>\n
That will probably leave his successor with her hands tied for much of her six-year term. Even if opposition candidate X\u00f3chitl G\u00e1lvez wins, a mountain of financial commitments will weigh on her. The candidate of L\u00f3pez Obrador’s party, former Mexico City mayor Claudia Sheinbaum, leads in polls. A third male candidate from a small party has almost no chance of winning.<\/p>\n
MEXICO’S PRESIDENTIAL ELECTION TAKES HISTORIC TURN AFTER BOTH MAJOR PARTIES SELECT FEMALE CANDIDATES<\/strong><\/p>\n
“The next administration will inherit a country with a financial hole that will limit the maneuvering room throughout the next term,” said Moody\u2019s Analytics Director Alfredo Couti\u00f1o. “In order to deactivate the current fiscal vulnerability, the incoming administration will have to adjust fiscally (spending or taxes) in 2025.”<\/p>\n
\n![\"Xochitl](\"https:\/\/a57.foxnews.com\/static.foxnews.com\/foxnews.com\/content\/uploads\/2024\/02\/1200\/675\/Mexico-Presidential-Candidates.jpg?ve=1&tl=1\")
<\/source><\/source><\/source><\/source><\/picture><\/div>\n\n\nThis combination photo shows Xochitl Galvez, at left, arriving to register her name as a presidential candidate on July 4, 2023, in Mexico City, and at right, Claudia Sheinbaum at an event that presented her as her party’s presidential nominee on Sept. 6, 2023, in Mexico City.<\/span> (AP Photo\/Fernando Llano, Files)<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n
L\u00f3pez Obrador has said that before he steps down, he’ll expropriate U.S.-owned Vulcan Materials, a move which could cost the Mexican government as much as $1.9 billion if the Alabama-based quarry company wins an ongoing international arbitration complaint against Mexico.<\/p>\n
Then there is a yet-to-be-fleshed-out promise to bring passenger trains back to Mexico before he leaves office. On Nov. 20, L\u00f3pez Obrador published a decree stating that if private freight operators refuse to run passenger service, the government would step in to do so.<\/p>\n
MEXICAN HIGHWAYS BLOCKED BY TRUCKERS PROTESTING VIOLENT ROBBERIES<\/strong><\/p>\n
While the trains would have to run on tracks run by the private concessionary operators \u2014 Mexico folded its money-losing state-run railroads in the late 1990s \u2014 the government would probably have to buy the trains, fix up stations and set up a ticket-selling scheme.<\/p>\n
The money-losing ideas keep coming. On Dec. 26, L\u00f3pez Obrador launched a state-owned airline at a time when most countries have decided to shut down or sell off their own. With guaranteed ultra-low ticket prices on flights to little-used, government-run airports, the prospects for hemorrhaging cash are endless.<\/p>\n
To cap it all off, on Feb. 5 he announced the government would guarantee workers retirement at full pay.<\/p>\n
The plan, once explained, was less generous than originally depicted. Only workers in official retirement plans would have their pensions topped up, and only to the level of the median wage of registered employees to about $10,000 per year. Still, that will probably cost billions of dollars.<\/p>\n
On that same day Sheinbaum, who is running for L\u00f3pez Obrador\u2019s Morena party and is viewed as his most devoted follower, claimed she would carry out the president\u2019s programs, and add a few of her own.<\/p>\n
“Of course these (L\u00f3pez Obrador\u2019s programs) are the foundations, the base of what our government will be, and what\u2019s more we are going to present other proposals,” Sheinbaum said.<\/p>\n
But almost as soon as she spoke, evidence emerged that she won\u2019t have the financial power to do so.<\/p>\n
A few days later, Moody\u2019s rating service downgraded the debt of the national oil company, Petroleos Mexicanos, or Pemex, even further into junk bond status.<\/p>\n
Moody’s based that on “projections of the government\u2019s further deterioration in fiscal conditions in 2024,” due to “a material increase in the deficit, fueled by social spending, persistently high borrowing costs, and augmented expenditures in flagship projects.”<\/p>\n
Consider what the next president will find on her plate: She will have to finish an oft-delayed, $20 billion oil refinery plagued by cost overruns. There’s a similarly priced, 950-mile (1,530-kilometer) railway meant to run in a rough loop around the Yucatan peninsula to connect beach resorts and archaeological sites. L\u00f3pez Obrador considers both to be his flagship projects, but the train is far from finished.<\/p>\n
Work also won’t be completed on modernizing other oil refineries, or on a train service leading into Mexico City, or yet another train service crossing from the Pacific to the Gulf of Mexico. A host of other building projects are still unfinished as well.<\/p>\n
L\u00f3pez Obrador claimed at the start of his administration in 2018 that all these projects would be finished by the time he left office, and that all would be paid for out of government cost-cutting and reducing corruption. That turned out not to be true.<\/p>\n
“In fact, last year we finished with a budget deficit of 3.4% of GDP, the highest since 1989,” said Gabriela Siller, the director of analysis at Nuevo Leon-based Banco Base. “This year they are predicting a deficit of 4.9% of GDP, the highest since 1988, and debt means more borrowing. Their numbers don’t add up.”<\/p>\n
The infrastructure projects \u2014 the planes and trains \u2014 are unlikely to ever turn a profit at the current pace.<\/p>\n
For example, the first section of the Maya Train project on the Yucatan peninsula carried about 1,780 foreign tourists in its first two months, or about five per train run.<\/p>\n
The original plan stated tourists would be the train\u2019s most lucrative source of income, but now officials are suggesting the train\u2019s revenue could come from short commuter runs or freight shipments. The peninsula has little industry and nothing suggests there is an urgent need for trains to carry shipments of sunscreen.<\/p>\n
L\u00f3pez Obrador has defended his free spending ways and increased debt, saying it was less than the debt his predecessors had piled up.<\/p>\n
“We are going to be lower in the percent of borrowing than (Enrique) Pe\u00f1a and (Felipe) Calderon,” the president said in September.<\/p>\n
Mexico’s debt currently is around 50% of its GDP. While that doesn’t sound high compared to the United Kingdom and United States, who are both around 100%, Mexico has additional debt held by the state-owned oil company and doesn’t have unlimited access to low-cost borrowing, like the U.S. does.<\/p>\n
CATHOLIC BISHOPS IN MEXICO HOSTED PEACE TALKS WITH DRUG CARTEL LEADERS<\/strong><\/p>\n
Historian Lorenzo Meyer wrote in the newspaper El Universal that L\u00f3pez Obrador\u2019s actions were not “an attempt to limit his successor\u2019s freedom of action, but rather as a productive investment of the huge political capital he has built up to help the new administration start off.”<\/p>\n
The biggest bombshell ever handed by an outgoing president to his successor in Mexico came on Sept. 1, 1982, when President Jos\u00e9 L\u00f3pez Portillo, who had three months left in office, announced that he was expropriating the entire banking industry amid a currency devaluation and debt crisis.<\/p>\n
His successor, Miguel de la Madrid, spent his entire six-year term struggling to deal with the fallout and paying the huge debt to bank owners.<\/p>\n
L\u00f3pez Obrador’s debt mountain, while less dramatic, is “a way of setting the political agenda for the next administration, a way of placing his imprint on the next administration,” said Siller, the analysis chief at Banco Base.<\/p>\n
<\/div>\n[ad_2]\n","protected":false},"excerpt":{"rendered":"
[ad_1] Mexico will likely elect a woman as its next president, but the new leader is expected to face financial limitations due to commitments initiated by President Andr\u00e9s Manuel L\u00f3pez Obrador. L\u00f3pez Obrador has proposed new and expensive projects in the closing months of his administration, leaving big-ticket projects unfinished. Officials warn that the next …<\/p>\n","protected":false},"author":1,"featured_media":27458,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/27456"}],"collection":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/comments?post=27456"}],"version-history":[{"count":0,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/27456\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media\/27458"}],"wp:attachment":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media?parent=27456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/categories?post=27456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/tags?post=27456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- L\u00f3pez Obrador has proposed new and expensive projects in the closing months of his administration, leaving big-ticket projects unfinished.<\/strong><\/li>\n