Lack of certainty and confidence leads Mexico towards a crisis


By Jorge Sánchez Tello

It is necessary that the politicians of the current administration understand that only by giving certainty and confidence can we hope to have an economic recovery.

Mexico is experiencing an important moment with a major economic and political crisis. There are fundamental problems to solve, such as the situation of violence in some areas of the country and the weakness of the rule of law.

A country where there is a climate of mistrust towards institutions and their rulers can generate a political crisis. Electoral change when it is not reflected in greater well-being for the population runs the risk of repeating the failure of the “Arab Spring” because getting rid of a dictatorial ruler is not enough. Building democratic institutions is a much more difficult task. Will the same happen in Mexico? Was it enough to change from one allegedly corrupt government to another where a crisis of confidence is brewing? Only time will tell.

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In the face of voices suggesting that Mexico imitate other Latin American countries because they have a favorable position to overcome underdevelopment, they are wrong especially because there are countries that are doing everything possible to destroy their economy, such as Argentina, Venezuela and Ecuador, among others. .

The reason is very simple, they are back to economic policies that have already shown that they have failed, such as protectionism, prohibiting the free market, attacking private initiative and inflation problems

In Mexico, although we still have governments that have electorally won by the majority of the votes, it is not enough to generate confidence and certainty. Democracy is only one way to come to power, but when exercising it, it is necessary to have credible public and economic policies.

Is the systematic attack against companies reasonable when precisely they can be part of the solution in the greatest economic crisis in many years? This anti-business rhetoric that has taken so much work to abandon in Latin America seems to have returned in Mexico. However, what some politicians fail to understand is that in the 21st century even China and Vietnam have favored with a more friendly speech towards investment because they know that without trust they simply do not invest.

It is proven that when the “politicians” try to control or interfere with the economic management of any country, great financial and economic catastrophes have been caused. What most politicians have not understood is that in economics if they are not respected: property rights, individual freedom, competition, the proper management of public spending without the need for debt, guaranteeing the rule of law a country never it will be able to give certainty to private investment which is one of the important engines for economic growth.

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Mexico cannot be reinventing every change of government, there are bases that in developed economies do not change regardless of who governs. Perhaps it is the so deficient educational system that we have, but it must be recognized that in our country those who generate employment are companies of all sizes and only by generating confidence will they be encouraged to invest more.

In order to overcome this health and economic crisis, it is necessary for the politicians of the current administration to understand that only by giving certainty and confidence can we aspire to have a faster recovery, unfortunately the dogmas in anti-business discourse are permeating and perhaps it is time to have a better speech towards unity. Hopefully in Mexico the errors that for example have led Argentina to have many years of crisis are not commented and only because they have not overcome their ideological “phobias”.

Jorge Sánchez Tello is director of the Applied Research Program of the Fundación de Estudios Financieros (FUNDEF). Follow him on LinkedIn and Twitter.


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