Luis Rubio
Coins have two sides and, at this moment in time, that of the government does not tally. On the one hand, the budget assumes a sensitively higher growth rate next year compared to that of the year coming to an end. To achieve this feat, the government itself recognizes that a higher growth rate can only be attained with private investment. But, on the other hand, the legislature power lives to approve laws that not only discourage investment, but that also annihilate it. The question is whether the two sides of the government (given that the president’s party has full control of Congress) communicate between themselves and understand the implications of their differences.
The inherent approach to the budget is exceedingly sensible: the collection of taxes can be raised, this accomplishing the expenditure goals proposed by the government were the oil production platform elevated and were the economy to grow at ca. 2%. Many have disparaged these two premises as naive but, from the viewpoint of the Mexican Ministry of Finance, they are achievable if and when the conditions are auspicious: at the end of the day, those numbers have been achieved in former years and there is no structural reason to think that this could not happen again.
However, the actions of the Legislature have been constructing a scaffold that is a direct attempt against the possibility of the growth of investment: three laws have been passed that are not only against investment, but also place on the defensive the entire tax-paying population. The Extinction of Domain law entails such lax and wide-ranging definitions of what can be taken over by the government that it can be applicable to virtually any person. The change in Article 19 of the Mexican Constitution grants such vast powers to the authority that there is no limit to what it can come to do, independently of whether its motivations are legitimate or political. Finally, the recent legislation in terms of fiscal matters places up against the wall literally any citizen, not only those entrepreneurs who acquire fake invoices. Of course the business of the so-called invoice mongers must be eradicated, but the law that came into being positions any tax payer on the threshold of prison.
Little by little, the scaffolding has been erected of a formidable tool that, in the hands of a vengeful governor or authority or one with an agenda, can affect the whole of the population. In its most minimal expression, it can intimidate any individual, involved in any activity. There are two possible explanations for this: one, that there lurks a Machiavellian plan behind these initiatives, oriented toward controlling the totality of the citizenry. The other, that each bill responds to the demands of distinct groups found within the Morena constituency, prompted to a greater degree by a revanchist spirit, probably against big business. I tend to think that the latter is more probable, but the question is irrelevant: what has been built is a lethal instrument for individuals, businesses and in general, for investment. The same could occur with savings on the passing of the bill that has been sent to Congress concerning matters of the individual retirement accounts (afores) and the only thing that could impede this is the clairvoyance with which the opposition in the Senate has conducted itself.
The question is whether this is about a unified government that proposes the revamping of the manner in which the country functions in order to succeed in better distributing incomes and to eradicate corruption and impunity or whether what we are seeing represents opposing views, either partially or totally, that on accumulating, produce a budding authoritarian state. Were it the former, the objective is one that cannot be accomplished because it would only succeed in paralyzing the economy, therefore the country. Were it the latter, the good proposals presented in the budget would be annulled by those favoring intimidation and threats to certainty and viability in the country’s long term.
Those driving the consolidation of an authoritarian government with all of the instruments and means to intimidate and control the population outright, from the most prominent businessman to the most modest peasant, evidently assume that the government can impose its will and that the population, all of it, has no alternative.
The reality is very distinct, as proven by two examples: on the one hand, it’s been quite obvious, for decades now, that the humblest Mexicans migrate to find the job and developmental opportunities that the politicians and bureaucrats have traditionally denied them. Migrants vote with their feet and, along the way, whether interpreted thus or not, they have de facto censured and failed a whole system of government.
For their part, the companies –medium and large- have been growing and expanding the length and breadth of the earth as a natural process of evolution, identical to that characterizing the rest of the planet. In the same way that an Audi or Toyota plant is installed in Mexico, Mexican companies grow and are set up in Germany or Japan. If there had been a much larger domestic market, their foreign expansion surely would have been less. The fact that the economy has grown so little, in average, comprises another piece of evidence substantiating the poor governmental performance throughout various decades.
The problem for the government is that it appears to believe that greater control will produce a better result. The evidence has been witness to precisely the flip side of the coin: without a strong source of trust in government, not even the peasants will save or invest.
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