Mexico's 'New Normal'

It has been more than 110 days since the first Covid-19 case was confirmed in Mexico. As of Sunday, June 21, the government reported 21,825 deaths and 180,545 confirmed cases, although hardly anyone trusts the official numbers. Some experts estimate the true toll of the virus may be three times higher than the number of reported deaths and 10 times higher than the number of reported cases. Early on, most experts pointed out why Mexico seemed unprepared for the pandemic. Sadly, they were not wrong. Mexico relied on a model to predict cases that was not accurate; it has an underfunded, understaffed, and under-supplied health care system; and the country failed to coordinate federal and state efforts in the struggle against the pandemic. The result: Mexico has the 7th highest number of Covid-19-related deaths in the world, and there is no end in sight to the crisis.

Bungling the country’s response began with the way the country sought to understand the progression of the pandemic. At the beginning of the outbreak, Mexican authorities relied on the sentinel model for tracking the virus. This model of epidemiological surveillance collects data from only a few high-quality testing centers, with narrow criteria for testing eligibility. The sentinel model was preferred over a program of massive testing adopted in most other countries. Yet instead of correcting course as the flaws in the model became clear, the government continues to resist widespread testing and tracking to control the spread of the virus. Indeed, Mexico has the lowest testing rate in Latin America. Giving up on serious efforts to manage the pandemic has had disastrous results. After more than 110 days, the number of new cases have not yet reached a peak and the number of deaths continues to rise.

The mismanagement of the pandemic is not lost on the press. National and international outlets are reporting the heartbreaking experiences of Mexican health care professionals and staff who, at a very basic level, lack the protection gear necessary to safely care for coronavirus patients. Some have protested, while others have been attacked on the street over Covid-19 transmission fears. In addition to work-related stress, they also maintain physical distancing from their families due to the fear of infecting them. Even so, they are not exempt from suffering. As of June 16, the government reported that 463 medical providers and staff have died from coronavirus and 32,388 have tested positive. After more than three months of deteriorating conditions, it is important to ask how much longer doctors and nurses will endure under these types of pressures, and who is going to be responsible for their mental health.

The virus has also exposed the rift between the federal government and the states. Even governors from Morena — President López Obrador´s political party — have complained about the lack of financial support from the federal government. The situation has escalated to the point where a group of governors — most from Mexico’s northern states — requested the renegotiation or exit from a fiscal pact between the federal government and the states. Thus, the pandemic is also generating a political crisis, in addition to the public health and economic crises already underway.

Despite all of this, the government has ended social distancing measures and begun a “new normal” phase. The decision to reopen the economy has raised some questions. Why is the government insisting on ending all efforts to stop the epidemic at a time of greatest contagion? Does the risk of reopening the economy at such a high-risk time invite another lockdown in the event of a rebound?

Economic Reasons

Even before the pandemic, Mexico´s economy was in trouble. Its growth rate in 2019 was 0%. And on May 24 of this year, Mexico’s central bank predicted that the economy could contract by as much as 8.8%. As the pandemic continues to take its toll, the economic consequences for Mexico will be the worst in decades. According to López Obrador, the country could lose 1 million jobs due to the pandemic. Some estimates already put that number at 12 million — although many are workers in the informal economy. Regardless, in April alone, Mexico lost more jobs than were created in all of 2019. However, López Obrador has declined to help the private sector, with the exception of an insufficient US$1,150 loan to some microbusinesses. He has also refused to increase the national debt to pump liquidity into the economy. Interestingly, he has been reticent to take on new debt, despite the fact that Mexico has USD$61 billion in flexible credit from the International Monetary Fund, which costs the country USD$163 million a year even when it is not used. Moreover, López Obrador has prioritized controversial infrastructure projects — a multibillion-dollar oil refinery, “Dos Bocas,”and a tourist train, “Maya Train,” that will circle the Yucatán peninsula — over aid to help businesses and individuals withstand the crisis. Critics and even supporters have questioned the economic viability and environmental impact of his favored infrastructure projects.

The pressure to reopen the economy is not only domestic. In April, U.S. officials and CEOs of multinational corporations pushed Mexico’s government to open factories vital to North American supply chains. U.S. Ambassador to Mexico Christopher Landau and Michael Kosak, acting assistant secretary for Western hemisphere affairs at the State Department, advocated for American firms to avoid disruptions in U.S. supply chains, which meant that Mexican companies had to stay open, too. Furthermore, a group of nine U.S. senators sent a letter to Secretary of State Mike Pompeo urging him to request that the Mexican government clarify its definition of “essential activities.” In response, Mexico’s government issued guidelines to restart operations in the automotive, aerospace, mining, and construction industries, even as the country still experienced widespread transmission of the virus. These pressures highlight how much the two countries depend on each other and how the U.S. government continues to be a primary influence on López Obrador’s actions.

Political Reasons

Adding to this complex scenario, Mexico will face the biggest midterm election in its history in mid-2021. There will be local elections in the 32 Mexican states, including 15 governorships. All seats in the House of Representatives are also up for grabs. These races are likely to be highly contentious given that the coronavirus outbreak has already eroded López Obrador’s popularity. According to the newspaper El Economista, López Obrador’s approval rating, 54.2% in February,  now stands at 46.6%, a seven-percentage point hit since the beginning of the outbreak. This can help explain the president’s urgency to end the lockdown and resume his rallies throughout the country despite the health authorities’ stay-at-home orders. It is worth noting that López Obrador has chosen to resume his travel schedule, visiting the states where his government is building its megaprojects instead of visiting hospitals and supporting health providers and staff who have spent more than 110 days on the front lines.

Most observers agree that Mexico is in trouble. Since the beginning of the pandemic,  López Obrador was skeptical of the coronavirus threat and ignored the recommendations of his own health experts. He downplayed the crisis and relied on his intuition instead of science, with disastrous results. He will be even more distracted in the coming months as he campaigns for his political party instead of governing. Under these circumstances, we can expect further economic and social damage to the country, and a slow and painful recovery.