The third week of October was dominated by three main topics: the announcement of where the citizen survey on the new Mexico City airport would take place; the fact that rating agencies like Moody’s and Fitch (who actually downgraded State-owned enterprise Pemex’s credit future perspective to negative); and the migrant crisis on the Mexico – Guatemala border. Each of these three events presents important challenges for the upcoming government who is starting to feel the heat of what may come.
On Monday October 15th, the President Elect’s Press Secretary, Jesús Ramirez announced further details regarding the citizen survey that will decide the fate of the new Mexico City airport. He said that the survey would take place on 538 municipalities (out of almost 2,500) between October 25th and October 28th, having voting booths on the plazas outside the Municipal Palace of each of those municipalities. He also indicated, that even though the survey is not done according to the laws guiding referendums (must be concurrent to a Federal level election, organized by the National Electoral Institute and more than 40% of the entire Mexican voter base must participate in order for it to be legal), the result would be binding. Throughout the week it was questioned by many different pundits because the incoming government left many details unclear. First of all, the overall selection of the 538 municipalities has been questioned by many political analysts and pollsters who can’t understand why those particular municipalities where chosen and why not others. Furthermore, in order to not present a cost to taxpayers, the survey would be paid by pooling resources of the Morena party Congresspeople, situation that did not fare well with them as hours later Speaker of the Chamber Deputies, Deputy Porfirio Muñoz Ledo (Morena) and Morena party leader in the Senate, Senator Ricardo Monreal, said they would not be paying that survey from their income. A week later, it is still unclear how the survey is going to be paid. Additionally, the possibility that the Santa Lucía military base option –to replace the construction of the new Mexico City airport –wins the survey has started to make uneasy several investors. It must be noted that around 35% of the construction of the new Mexico City airport has already been completed and abandoning the project would cost around $120 billion pesos (~$6.3 billion dollars) in different sunk costs and legal problems from investors who would sue. The week continued in not the best of terms regarding the markets’ trust on AMLO’s administration as both Moody’s and Fitch rating agencies warned the upcoming administration about their new policies with State-owned oil firm Pemex. On Thursday October 18th, Moody’s warned that placing the financial burden on Pemex of building a new refinery (a flagship policy from AMLO) could be devastating to its debt and would potentially imply a reduction to a negative grade that could affect Mexico’s overall credit rating as the government has said it would be the lender of last resort for Pemex. On Friday October 19th, Fitch downgraded Pemex’s future credit perspective to negative precisely because of this issue. These warnings were undermined by future Secretary of Energy, Rocío Nahle, and even President Elect, Andrés Manuel López Obrador, who said Mexico has nothing to worry about and that what Fitch did was absurd as they don’t understand what data they have. But the most relevant issue of the week was the migrant crisis happening on the Mexico – Guatemala border, as thousands of Central American migrants clashed with Mexican federal police forces who tried to prevent them from entering illegally into the country. A couple thousand Central American citizens have made another migrant caravan walking from Honduras all the way to the Mexico – Guatemala border where they are attempting to get across and get all the way to the United States fleeing from the never-ending violence and poverty situations that plague their home countries. They are seeking asylum in the United States as political refugees, something that has been denied by the U.S. government and has infuriated President Trump who is pressuring Mexico with this issue. The Mexican government has been caught between the dire needs of Central Americans who need a human response to the crisis and the respect of the legal processes through which one can enter other countries, particularly in times where this issue is salient and there is open hostility towards them within the United States and also Mexico. The Mexican government asked the Office of the United Nations High Commissioner for Refugees (UNHCR) for help dealing with the situation in order to process their requests for political asylum, and has been granting some of them the possibility to enter the country and stay in Hidalgo City, Chiapas while their applications are processed. Nevertheless, the Mexican government officials are overwhelmed by the number of applications and the process is going very slowly. Meanwhile, after the current Mexican government faced social media backlash (particularly from liberal voters) for its response to the crisis, the President Elect flew to Chiapas and said that Mexico would try to help the Central American citizens looking for asylum. With him, Mexico would grant work visas to everyone who wanted to work, while his administration would continue to cooperate with the United States seeking to further social development policies and economic aid for the Central American region to truly address the migration causes. It must be noted that on Friday, U.S. Secretary of State, Mike Pompeo, met with upcoming Secretary of Foreign Relations, Marcelo Ebrard, where it was said that the United States government offered 20 million dollars to its Mexican counterpart to massively deport Central American citizens from Mexico that would be sent over from the United States border, but the future Mexican government refused.
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