Up to 25 thousand pesos in credits for micro-businesses: This is the economic reactivation plan for Mexico

January 22, 2021 5 min read

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 plan of the current administration to reactivate the national economy .

Regardless of the fact that this plan is presented with a lag, 10 months after the effects of the global health crisis on our economy began at its maximum expression, it is well worth doing a brief analysis on the most important and representative.

These are the pros and cons that are observed and derived from the document made available to the general public by the owner of the economy portfolio.

^{Tatiana Clouthier, presented to the country a plan of the current administration to reactivate the national economy / Image: Depositphotos.com}

The pros

1) It is always better to have something than to have nothing; for months, a reactivation plan was requested to reduce the impact of the crisis on the productive sector as much as possible. The idea of course was not to support large companies, they do not have such a problem, but they do have millions of small and medium-sized companies, millions of economic units that are fundamental for employment in the country. Although late, it is always better to have something than to have nothing.

2) The four axes contemplated within the plan seem correct: internal market, employment and business, promotion and facilitation of investment, as well as regionalization of the sectors

3) The scheme reflects that at least in general terms the government or those in charge of designing the plan have a concrete idea of what is required in sectoral matters to reactivate the economy. It seems like a good start.

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4) Regionalizing sectors is a fundamental point, something that has rarely been done, or perhaps never.

It is about meeting sector needs by region, a success at least on paper.

5) The plan follows in general terms the lines of action aimed at protecting fragile sectors. It will always be positive to take into account who is most disadvantaged.

The cons

1) The big problem with the plan is the absence of the “hows”; How do you intend to achieve the objectives set? Etc. In most cases they are general lines of action that do not go further; they are a good but incomplete exercise.

2) There are not too many figures, they are actually few. This leads us to the question of whether there really are the necessary resources to carry out the objectives. In reality, except for the figure that around 1,600 million pesos are available for credit dispersion, the figures are conspicuous by their absence. Even this amount is small for the size of what is required.

3) There is talk of support for micro and small businesses for amounts of up to 25 thousand pesos in credits. The truth is a low figure even in the case of small businesses, because it is not known how long they have been closed and there is no certain date of full reactivation. Possibly those remedies are just aspirin for a much greater evil.

^{There is talk of support for micro and small businesses for amounts of up to 25 thousand pesos in credits. / Image: Vía Alto Nivel}

4) There is talk of credits to the restaurant sector for up to 250 thousand pesos. The figure is low or medium depending on the size of the unit in question, but in both cases insufficient. We also return to the same problem of not knowing how long the pandemic and the restrictions with all its negative effects will last.

5) Although this government has said that it is and does things differently, it is striking that a program of such magnitude has not had the presence of key players in the country’s economy. For example, the Secretary of the Treasury was not present. Such a plan, due to its economic relevance, was discussed and announced in the secretariat of economy and with its owner, plus other bodies that supported it. Now it was not like that. Credibility and certainty is essential for the success of programs like this, in the United States it is the president of the country himself who is in charge of making and explaining this type of programs, without diminishing the importance of the head of the economy portfolio.