Guillermo Ramon Adames: The Mexican Financial Reform (Whatever That Might Mean) Guillermo Ramon Adames y Suari - PVNN
October 2, 2013

Well that’s the name they have given to it. The Mexican government screams like a spoiled brat: “I want more money, I want more money” but they don’t say what they want it for. All the “effort” (it should read contribution by all of us) comes from the very same people that always pay taxes. No more but definitely no less. The amount of non-tax paying citizens is rapidly growing and nothing is done: Some statistics indicate that in the country there are more than 5/6 million illegal street merchants (ambulantes). People, who do not pay taxes, steal electricity and water and occupy the streets. For a vote and a bribe, the government (both state and federal) allows anybody to sell whatever (literally) on the streets even against the Mexican formal economy.

In the reform, there is no effort on the government’s part to reduce their standard of living: Mexico is the most expensive democracy on the planet and government officials intend to keep living with the very same luxuries and even better if possible. There is no transparency in any Mexican government agency or a reason for such heavy machinery. The Congressmen and the Senators have better salaries than their pairs in the US. Probably the highest salaries in the world. The President knows this and does nothing because otherwise they will not approve his reforms or his standard of living. The government simply wants more money.

Mexicans do not seem to realize that whatever will be given today to the population, it will be on borrowed money and at one point that has to be payed: See today’s Europe’s economy: do we ever learn? Mexico lost half of its territory to the US for being such poor administrators. Mexico lost Central America for the very same reason. Now we encourage the world to come and invest in Mexico. What will we do when the Prime Minister of Germany will say to VW or Siemens or Bayer or Mercedes etc: “You have a factory in Mexico, in Brazil, In Nigeria, in China: Half of your personnel MUST be German: Support German solidarity” and they will. Today’s work shortage in the world will lead to that: Ford, Nissan Chrysler GM will do likewise: And what can Mexico do? If we don’t like it they will take their factories elsewhere: And if they stay, unemployed people will be Mexican. But Mexico makes no effort to have an industry. Our only “industry” is the drug cartels. Otherwise “we produce FOR so and so” but we don’t produce cars, airplanes, ships anything as a finished product. We produce spares for everybody but we don’t have a consolidated Mexican industry. All of our industry is in function of what we produce for whom…

The tax raising is brutal and some “taxes” are not even cited in the “new” reform. Take Gasoline: the price has been multiplied by 5 in some 10 yrs. It passed from some $2.50 to $11.80 per litter and is reaching US prices. Water: I used to pay $30 per very two months: now I pay $500 for two months (this is the price of water of “my zone”). Mexico City has some 6 million people. Just multiply! And if there were an improvement in water service and/or supply… but they just collect the money and you better not be late. Every other weekend they cut the water supply because “they are performing maintenance” They have been performing the very same maintenance for the last two years… so they say. We receive less and less water and pay more and more. Let’s switch to electricity: the very same song they raise the prices at will and if you do not pay they cut the electricity. As simple as that: The typical “Mexican Economical Model”… I get you all the way.

There is really no point in criticizing any of the tax measures: The PRI is intelligent. Their plan has certain exaggerations that will obviously be deleted: With this attitude they will “prove” that they are open and that they are good negotiators: but the essence, the repercussions towards the population are not in the agenda. The attitude is “you must pay this and I scrape this and that benefit that you had before and that’s it. Period”.

Having worked in education most of my life, I will only raise one question: the government wants to tax tuition fees: a tax that certainly will not pass. Many students’ parents can hardly afford an additional 16% raise on top of an already high level of tuition fees: some Mexican universities are more expensive than the US’ tuition fees. The public universities are overcrowded and cannot enroll even all of today’s applicants. If this tax would pass, the government would be throwing some of those kids to the streets, and the educational problem will become more acute. Today we have some 15% of non-enrolled university students. By not being able to pay tuitions, the non-enrollment will go to at least 20 to 25%. And then what? What will we do with those kids?

But the key question (which is asked) does not seem to find an answer: What does the government want the money for? Raising taxes for the sake of it? Looks like…

Guillermo Ramon Adames y Suari is a former Electoral Officer of the UN

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