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THE IMF, OUT OF TOUCH REALITY

Ago 9, 2022

THE IMF, OUT OF TOUCH WITH REALITY

La Jornada Editorial

When referring to Mexico in its report on the external sector, “Pandemic, war and global imbalances”, the International Monetary Fund (IMF) mixes a reasonably objective reading of Mexico’s situation with unsolicited and misplaced public policy recommendations.

Thus, it recognizes an equilibrium having been maintained in transactions with other economies, a growth of foreign direct investment, and the existence of net inflows in the financial account, which are limited due to greater purchases of foreign assets by the country’s residents, that is, to the colossal export of capital carried out by wealthy Mexicans to the detriment of the national economy. At the same time, however, the IMF ventures to suggest that, in order to maintain the financial equilibrium, additional structural reforms are required.

These include addressing the question of the informal economy and deficiencies in governance, private sector participation in energy, and reforming Pemex’s business strategy and governability.

In principle, it is difficult to understand what the IMF is referring to as deficiencies in governance and, as far as the informal economy is concerned, this negative aspect of Mexico’s economic reality is already being addressed by the federal authorities as part of their efforts to integrate small businessmen and other sectors in the social security system. At the same time, the allusions to the energy sector in general and to the management of Petróleos Mexicanos in particular reveal the IMF’s obsessions with the privatization of every corner of the world and every aspect of human life that can be made profitable, as well as with the imposition of neoliberal logic and discourse in the sphere of public administration.

In response to a question from an attendee at his morning press conference yesterday, and without mentioning the International Monetary Fund report, President Andrés Manuel López Obrador listed the at least 19 structural reforms carried out by his predecessors during the neoliberal period (1988-2018).

03-08-2022-Conferencia-de-prensa-matutina-Palacio-Nacional IMF

In his report, the president recounted the damages inflicted on the Mexican State and people by each of these legal modifications.

Among other negative aspects, the sale of important public companies to the private sector was allowed; banks that were the property of the nation were handed over to private buyers; the original owners of land were dispossessed and free rein was given to the formation of enormous latifundio estates; 46 percent of the country’s territory was granted in concession for mining exploitation, in addition to granting concessions for up to 50 years and leaving the extraction of gold, silver, and copper free of taxes; private companies were authorized to generate electricity, despite this contravening the Constitution; free public education was eliminated;

the high collection of commissions in the Retirement Savings System was enabled; the conversion of 1.20 trillion pesos of private debt held by the oligarchy into public debt was authorized; the deferred payment of taxes was allowed; a campaign to discredit and criminalize the democratic teachers’ movement was orchestrated; the control of telecommunications was left in the hands of the existing powerful forces; the State was prevented from bringing Internet to those who need it; and the country’s oil potential was handed over to private national and foreign companies.

As the President pointed out, practically all of these embezzlements and abuses were approved in a collusion between PRI and PAN legislators, as well as the PRD since 2012.

At a time when Mexico is carrying out reconstruction efforts to overcome the disaster generated by the application of neoliberal dogma, the IMF’s insistence on promoting failed and counterproductive formulas is not only brazen, but also denotes the institution’s inability to exercise self-criticism, take stock of reality, and react to a context that is not and cannot return to that of the Washington Consensus of more than three decades ago, when the superpower and its local allies imposed the dictatorship of the so-called free market on almost the entire planet.

Source: La Jornada, Friday, August 5, m2022

https://www.jornada.com.mx/2022/08/05/edito

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