MEXICO CITY (AP) — Mexico’s outgoing president has always prided himself on his reputation as a penny-pincher, but on Friday, three days before leaving office, Andres Manuel López Obrador announced generous cash grants to allies in the radical trade union movement.
It’s part of what analysts call López Obrador’s contradictory policies, in which he slashes some government services to the bone while providing vast sums of money to his pet projects and political allies. It was something.
He awarded the electrical workers union about $95 million a year in unearned pension benefits, calling it an “act of justice.”
In 2009, about 7,000 unionized workers at the debt-ridden, corrupt, and overstaffed government power company were fired. Still, they supported López Obrador’s two subsequent presidential campaigns over the next decade.
At the time of dismissal, workers had not accumulated enough years to retire under a policy that allows employees to retire after 25 years of service. On Friday, President López Obrador gave them pensions anyway.
This action was in line with his generosity towards those who support him.
Last year, he donated about $45 million to former employees of the bankrupt company. Mexican government-owned airlinein order to obtain trademark rights to the airline name “Mexicana de Aviation.”
Experts say the name essentially has no commercial value after the airline went bankrupt in 2010, but workers whose pensions were reduced to zero after the airline went bankrupt have said the president He was said to have been a strong supporter of López Obrador when he was running for office. Since then, he has spent hundreds of millions more to revive a smaller version of the government airline.
The lavish giveaways stand in sharp contrast to the image of extreme fiscal austerity that López Obrador has sought to project since taking office in 2018 — he has sold off the presidential jet and He flew around the country in tourist class on airline jets. Later, military aircraft were used for travel.
He has largely abolished federal oversight and regulatory agencies, arguing that they are too expensive and that “you can’t have a rich government with poor people.” Federal revenue allocations to state governments and funding for local police departments have been slashed to the bone.
This austerity has reduced funding for basic projects such as infrastructure construction, road construction, maintenance, and police.
Meanwhile, in a rush to complete López Obrador’s pet projects (mostly railways and oil refineries with questionable profitability), the government has piled up debt and run a deficit equivalent to 5% of GDP. This undermined the central bank’s attempts to control inflation at an annual rate of 5% with a domestic interest rate of 10.5%.
Gabriela Siler, director of economic analysis at local financial group Banco Base, said conflicting policies were hurting Mexico.
Shiller said “physical investment” is declining. “Paradoxically, this administration is on track to take on more debt and a very high budget deficit.”
López Obrador has been tough on his opponents in the final days of his term.
Late Monday, he effectively seized $1.9 billion worth of real estate on the Caribbean coast owned by a U.S. company that operates a quarry and port just south of the resort town of Playa del Carmen. He declared the land a nature reserve, even though permission had previously been granted for a quarry and a wharf.
López Obrador had previously threatened to confiscate the property. It then offered to acquire the company for approximately $385 million.at the time he said he wanted to make it a tourist attraction. The company estimates the land’s value at about $1.9 billion.
The U.S. company that owned the property — Alabama-based Vulcan Materials — said Tuesday that the expropriation violated the U.S.-Mexico-Canada Free Trade Agreement and that it was “an immediate threat to our business.” It is part of a series of threats and actions by the regime.
The outgoing Mexican leader also had a very public and nasty spat with retail, television and banking tycoon Ricardo Salinas Priego, claiming the tycoon owed him more than $1 billion in unpaid taxes. .
López Obrador then offered Salinas Priego a deal to waive the arrears on unpaid taxes, but he claimed the strongman refused out of “arrogance.”
Salinas Priego hit back, accusing allies of López Obrador’s son Andy, a top leader in the president’s Morena party, of trying to extort money from businessmen through secret tax audits.
