March 21, 2020 / 2:24 AM / 2 months ago

Mexican government implored to step up lax coronavirus fight

MEXICO CITY (Reuters) - Mexico’s government needs to take much bolder action to address the coronavirus pandemic before it wreaks havoc on lives and an economy that was already in a recession, several business leaders and state officials have said.

A general view shows an almost empty Periferico after the local government asked residents to stay at home as part of the measures against the spread of the coronavirus disease (COVID-19), in Mexico City, Mexico March 20, 2020. REUTERS/Tomas Bravo

The government has been slow to implement coronavirus containment measures including travel bans, while President Andres Manuel Lopez Obrador has downplayed the potentially devastating fallout from the disease. He continues to tour towns across the country, holding large rallies as he hugs supporters and kisses babies.

“We’re very worried that this health crisis, like we’ve seen in other countries, turns into an economic and health tragedy,” Bosco de la Vega, who heads Mexico’s main agricultural lobby, the National Farm Council, said on Friday.

“If our country does not rise to the challenge, the agricultural food sector, which sends 78% of its exports north (to the United States), we’re looking at near term consequences that could have catastrophic consequences for the economy, health and lives,” said de la Vega.

He added that food supply and distribution in Mexico was assured for now.

Mexico has so far avoided the worst of the outbreak, with 164 detected coronavirus cases and only one death. Globally, there have been more than 270,000 cases reported and a death toll of over 11,000.

But with Latin America’s second largest economy so dependent on trade and tourism, the economic pain of disrupted global supply chains, diminished demand and international travel bans is already being felt.

“It’s happening and at a very fast pace. All the operations that are being stopped have an impact on the lives of people,” said Carlos Salazar, head of Mexico’s powerful CCE business lobby.

“For days, we’ve been saying, let’s not think that with the continuation of social programs we’re going to be able to confront a crisis so big that we haven’t been able to calculate it yet,” said Salazar, in an apparent reference to youth scholarships and other welfare spending prioritized by Lopez Obrador.

The CCE sent a letter to the government urging it to drop its ambitious primary budget surplus target to free up resources, suggested taking on debt if necessary, and proposed measures to ensure liquidity, stimulate private investment and boost consumption.

Mexico’s states have asked the federal government for tax breaks, help with debt payments to suppliers and fix prices for products meant to combat coronavirus, the association of Economic Development Ministers said in a statement.

Mauricio Usabiaga, Guanajuato’s state economic development minister, said for the manufacturing sector to adequately face the coronavirus crisis and shield its economy, businesses and workers, it will need to increase its 89 billion peso ($3.6 billion) annual budget by up to 40%.

He said his state depends on the federal government for funds, but Lopez Obrador’s administration has so far been mute on the issue.

“We can’t be like ostriches and hide our heads in the sand, and what worries us is that within the federal government there have been no preventive actions taken to raise awareness among the people,” Usabiaga said.

“We hope that the federal government redirects the budget for the well-being of the country.”

Reporting by Anthony Esposito; Editing by David Alire Garcia and Raju Gopalakrishnan

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