Mexico to partially reopen economy

Government officials in Mexico announced that the country will reopen parts of the economy beginning next week. The Associated Press reports that the construction, mining, and car and truck manufacturing will be permitted to resume operations on May 18.

Why it matters

Mexico is a global manufacturing powerhouse. According to the Organization of American States, Mexico has 13 free trade agreements with dozens of countries and blocs, including the European Union, Japan, and the United States.

  • Integrated supply chains mean that plant closures in one country have ripple effects on the other, especially in automotive manufacturing.

President Andres Manuel Lopez Obrador (AMLO) is under pressure from abroad and at home to reopen the economy.

  • Repeating the talking points of President Donald Trump, the US ambassador to Mexico, Christopher Landau, took to Twitter last month to call for the government to reopen the economy saying, “The destruction of the economy is also a health threat.”
  • Susana Prieto, a labor lawyer, accuses AMLO of being “a puppet of Mexican and foreign (businesses) that do not care about the lives of Mexican workers.”

So far Mexico has lost more than 500,000 jobs since the start of the pandemic. Governors in Mexico are mixed on the decision to reopen the economy.

  • Governor of Puebla, Miguel Barbosa, is concerned that reopening the economy will undo the health safety measures taken so far: “The rebound in contagion, and I say this as a matter of probability, could be very, very high, it could get out of control.”
  • In Quintana Roo, a state heavily dependent on tourism where 22% of jobs have been lost, Governor Carlos Joaquin Gonzales is concerned about the economic devastation in his state.

What are the risks

Mexico has tested the lowest percent of its population among peer countries:

  • 120,000 people tested out of a population of 130 million or
  • 0.06% of the population.

Assistant Health Secretary Hugo Lopez-Gatell doesn’t expect widespread testing until July.

However, factories, like the ones that will be allowed to reopen next week, are highly susceptible to spreading the coronavirus.

  • The Los Angeles Times reported in April on the spread of the coronavirus in US factories in Mexico.

Meanwhile, the healthcare system in Mexico is woefully unprepared for a massive outbreak.

  • Reuters reports hospitals filling up and turning patients away in Mexico City.
  • ABC News reports Mexicans coming to California to seek medical treatment.
  • Al Jazeera reports a shortage of personal protective equipment is putting healthcare workers and patients at risk.

What do you think? (¿Qué piensas?)

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