Mexican President Andres Manuel Lopez Obrador to present economic stimulus plan
Photo: Manuel Velasquez—Getty Images
Mexican President Andres Manuel Lopez Obrador (popularly known as AMLO) is expected to announce an economic stimulus package to shore up the nation’s economy during the COVID-19 pandemic.
After flouting his own government’s social distancing rules and downplaying the severity of the virus, AMLO has thus far rejected proposals to bail out and reduce taxes on banks and corporations. Instead, he has called for the stimulus to focus on helping working-class Mexicans through the pandemic, but has remained vague on how this will be distributed.
AMLO is likely to announce a moderate stimulus package with low-income relief measures in the form of food and cash handouts, an approach similar to India’s. However, AMLO cannot ignore the plight of key industries like oil, agriculture, and electronics adversely affected by the pandemic. Furthermore, with 58% of the Mexican labour force working in informal sectors and a welfare state that often fails to reach the most vulnerable Mexicans, it is difficult to see how much of an effect low-income relief may have.
Despite his rhetoric, it is also possible that AMLO will include bailout measures for the state-owned oil company PEMEX, which is selling oil at record low prices. As the virus progresses and the economy contracts, AMLO may be forced in the coming weeks to reconsider his position on supporting other important sectors like electronics and automobile manufacturing.
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