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As much as 25,000 pesos in micro-business loans: That is Mexico's financial reactivation plan

Tatiana Clouthier presented the government's current plan to reactivate the economy, which had been expected a few months earlier.

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22, 2021

5 min read

This article has been translated from our Spanish edition using AI technologies. Errors can occur due to this process.

This story originally appeared on Alto Nivel

By Antonio Sandoval

On January 19, the Secretary of the Federal Government, Tatiana Clouthier , presented to the country a Current administration's plan to reactivate the national economy .

Notwithstanding the fact that this plan is presented with a delay 10 months after the impact of the global health crisis on our economy began, it is worth doing a brief analysis of the most important and representative plans.

These are the advantages and disadvantages observed and deduced from the document that the owner of the economic portfolio makes available to the public.

Tatiana Clouthier presented the country with a plan of the current government to reactivate the economy / Image:

The professionals

1] It is always better to have something than to have nothing; A reactivation plan had been requested for months in order to minimize the impact of the crisis on the productive sector. The idea, of course, wasn't to support big companies, they don't have such a problem, but they have millions of small and medium-sized enterprises, millions of economic units that are fundamental to employment in the country. Although late, it is always better to have something than to have nothing.

2] The four axes foreseen in the plan appear to be correct: internal market, employment and economy, promotion and facilitation of investment and regionalization of sectors

3] The system reflects that, at least in general, the government or those responsible for drawing up the plan have a concrete idea of ​​what is needed in sectoral matters to reactivate the economy. It seems like a good start.

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4] The regionalization of sectors is a fundamental point that has rarely or perhaps never been done.

It's about meeting the needs of the sector by region, at least a success on paper.

5] The plan generally follows the lines of action to protect fragile sectors. It will always be positive to consider who is most disadvantaged.

The disadvantages

1] The big problem with the plan is the lack of "how"; How do you want to achieve the set goals? In most cases, these are general lines of action that go no further. They are a good but incomplete exercise.

2] There aren't too many numbers, actually few. This leads us to the question of whether there really are the necessary resources to achieve the goals. In reality, except for the figure that around 1,600 million pesos are available for credit dispersion, the numbers stand out for their absence. Again, this amount is small for the size of what is needed.

3] There is talk of helping micro and small businesses for loans up to 25,000 pesos. The truth is a low number even for small businesses as they don't know how long they were closed and there isn't a specific date to be fully reactivated. Possibly these remedies are just aspirin for a much greater evil.

There is talk of supporting micro and small businesses for loans of up to 25,000 pesos. / Picture: Vía Alto Nivel

4] There is talk of loans to the restaurant sector for up to 250,000 pesos. The number is low or medium, depending on the size of the unit concerned, but insufficient in both cases. We also return to the same problem of not knowing how long the pandemic and restrictions, with all their negative effects, will last.

5] Even though this government has said it is different and is doing things differently, what is striking is that a program of this size had no key players in the country's economy. For example, the finance minister was not present. Due to its economic relevance, such a plan was discussed and announced in the Secretariat of the Economy and with its owner and other bodies supporting it. It wasn't like that now. Credibility and security are critical to the success of such programs. In the US, it is the president of the country who is responsible for creating and explaining these types of programs without detracting from the importance of the head of the economic portfolio.

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