Monday, January 16, 2017 President Peña Nieto: This Year will be Challenging for Mexico
Office of the Mexican Presidency
This will be a year
of major challenges for Mexico; we will be prepared if we face them together: Enrique Peña Nieto
- The president gave a detailed explanation of the gas price increase.
- The gas price increase is due to external factors. The government will not receive a penny more in taxes because of
this increase.
- To prevent unjustified increases in other products and services,
government agencies have been instructed to maintain constant vigilance to prevent abuses.
- We will work hard to maintain and strengthen economic, cultural and family ties between Mexico and the United States,
he said.
- As of the first quarter of this year, there will be a 10 per cent reduction in federal agency directors’
salaries.
President Enrique Peña Nieto delivered an address to mark the start of the year, in which he said that 2017 will
be a year of major challenges for Mexico, the government and our society. “These are challenges for which we will
be prepared if we face them together”.
He mentioned the gas price increase and building a positive relationship with the new
US government.
In the message, broadcast on national radio and television, the president provided a detailed explanation of the gas
price increase.
He said that this adjustment, “Is not due to Energy Reform or a tax increase.” “In the past year,
worldwide oil prices rose by approximately 60 per cent. This, in turn, has raised international gas prices, which directly
affects Mexico; because for years, over half the fuels consumed in the country were imported.”
“In other words, the
gas price increase is due to external factors. The government will not receive a penny more in taxes because of this increase,”
he declared.
The president explained that attempting to maintain the artificial price of gasoline would have forced the government
to reduce social programs, raise taxes or increase the country's debt, jeopardizing the stability of the entire economy.”
Maintaining artificial gas
prices in 2017, at the December rate, would have involved an additional expenditure of over 200,000 million pesos.
This amount is equivalent
to:
- Paralyzing all Social Security services for four months: from consultations with the GP, to surgeries,
daycare centers and emergency services.
- Suspending the assistance provided by the
PROSPERA program to nearly seven million families for two whole years.
- Suspending the
Popular Insurance Scheme, which protects the health of over 50 million Mexicans, for three years.
President Peña Nieto
said that, “In the past, other governments decided to keep the price of gasoline artificially low to avoid political
costs.” They were able to do so, he said, “Because the country produced more oil, which was sold at the highest
price it has ever been, and the government had surplus income.”
He said that in the past six years alone, “Nearly a billion
pesos were lost in subsidizing gasoline.”
"And I say that they were lost because it was money that was literally burned
by giving away gasoline, rather than investing in more productive things such as public transport systems, schools, universities
and hospitals,” he added.
He noted that in the case of this administration, “The first thing we did before taking this
measure was to cut government spending by nearly 190 billion pesos. To date, we have had to eliminate about 20,000 jobs, equivalent
to a reduction in salaries and benefits of more than $7.7 billion pesos.
Moreover, “As of the first quarter of this year,
there will be a 10 per cent reduction in federal agency directors’ salaries.”
The president said: “Despite this explanation, I
know that bringing gas prices into line with international rates is a difficult change. But it is my responsibility as president
to make difficult decisions in the present to avoid further damage in the future.”
He said that in order to protect the population, and to
prevent the gas price hike from serving as an excuse for unjustified increases in other products and services, government
agencies have been instructed to maintain constant vigilance to prevent abuses.
Regarding the challenge of building a positive relationship
with the new US government, the president said that, “Mexico will be able to defend and ensure the respect and international
recognition it has gained in the world.”
“We will confirm the friendship between the Mexican people and the American people,
and will work hard to maintain and strengthen economic, cultural and family relations between the two countries,” he
said.
To
this end, he said that, “Our country has its unshakable dignity, the strength of its history, its unique culture, and
today, as always, its national unity.”
“Unity is the supreme value that has allowed Mexico to preserve its independence
and sovereignty, and successfully cope with the greatest challenges in our history. Together, we build national unity every
day,” he said.
"I am confident that, inspired by our unity, Mexico and Mexicans are prepared to face any challenge. With that
confidence, I will work to ensure that in 2017 every home and family has health, success and well-being,” he said.
The text of President Enrique
Peña Nieto’s address is given below:
“Mexicans:
“It is a pleasure to greet you at the start of 2017. I hope you celebrated the
Christmas and New Year holidays with your family.
“This will be a year of major challenges for Mexico, the government and our society.
These are challenges for which we will be prepared if we face them together.
“The first is undoubtedly the gas price increase.
“I know this situation
has caused a great deal of grief and anger. These are feelings that I understand.
“So today I want to give you a full explanation
of this issue, hoping to clear up any remaining doubts.
“First of all, it is important to note that this gas price increase is not due
to Energy Reform or a tax increase.
“So why did gas prices go up? In the past year, worldwide oil prices rose by approximately 60
per cent.
“This,
in turn, has raised international gas prices, which directly affects us; because for years, over half the fuels consumed
in the country were imported.
“In other words, the gas price increase is due to external factors. The government will not
receive a penny more in taxes because of this increase.
“Attempting to maintain the artificial price of gasoline would have forced us
to reduce social programs, raise taxes or increase the country's debt, jeopardizing the stability of the entire economy.
“Maintaining artificial
gas prices in 2017, at the December rate, would have involved an additional expenditure of over 200 billion pesos.
“This amount is equivalent
to paralyzing all Social Security services for four months, from consultation with the family doctor, to surgeries, nurseries
and emergency services and suspending the support provided by the PROSPERA Program to nearly seven million families for two
full years, and suspending the Popular Insurance Program, which protects the health of over 50 million Mexicans, for three
years.
“At
this point I would like to ask what you would have done?
“Moreover, maintaining artificial gas prices would mean taking away
resources from the poorest Mexicans to give to those who have the most.
“The hard facts speak for themselves: 60 million Mexicans, those
with the lowest incomes, consume only 15 percent of the gasoline, while 12 million, the 10 percent of the population with
the highest income, consume 40 percent of gasoline.
“In the past, other governments decided to keep the price of gasoline artificially
low to avoid political costs.
“They were able to do so because the country produced more oil, which was sold at the highest
price it has ever been, and the government had surplus income.
“Thus, in the past six years alone, nearly a billion pesos were
lost in subsidizing gasoline.
“And I say that they were lost because it was money that was literally burned by giving away
gasoline, rather than investing in more productive things such as public transport systems, schools, universities and hospitals.
“In our case, the
first thing we did before taking this measure was to cut government spending by nearly 190 billion pesos. To date, we have
had to eliminate about 20,000 jobs, equivalent to a reduction in salaries and benefits of more than $7.7 billion pesos.
“Moreover, as of the
first quarter of this year, there will be a 10 per cent reduction in federal agency directors’ salaries.
“Despite this explanation
I know that the fact that gas prices are being brought into line with international rates is a difficult change.
“But my responsibility
as president is precisely to make difficult decisions in the present to avoid further damage in the future.
“What would happen
if we did not protect the stability of our economy?
“Heads of household would lose their jobs; young people who are graduating today
would not find work; couples who have just bought a house would find it very difficult to pay off their mortgage; and housewives
would no longer be able to afford things since all prices would go up.
“That's what happens when a country loses its economic stability:
Families, especially those with lower incomes, would be severely affected. And to prevent this, the government is taking tough
decisions.
“In order to protect the population and prevent the gas price hike from serving as an excuse for unjustified increases
in other products and services, government agencies have been instructed to maintain constant vigilance to prevent abuses.
“The government is
also engaging in discussions with the productive sectors to design a package of measures to support the family economy, encourage
investment and promote employment.
“The other challenge we face in 2017 is to build a positive relationship with the new government
of the United States.
“We will confirm the friendship between the Mexican people and the American people, and will work hard to maintain
and strengthen economic, cultural and family relations between the two countries.
“Mexico will be able to defend and ensure the respect
and international recognition it has gained in the world.
“To this end, our country has its unshakable dignity, the strength
of its history, its unique culture, and today, as always, its national unity.
“Unity is the supreme value that has allowed Mexico
to preserve its independence and sovereignty, and successfully cope with the greatest challenges in our history. “Together,
we build national unity every day.
“Unity consists of sharing deep values, love of country and pride in being Mexican. It involves
making an everyday effort to be generous to our children, our family and our country; to maintain and express the feelings
of solidarity we give one another, especially at difficult times.
“I am confident that, inspired by our unity, Mexico and Mexicans
are prepared to cope with any challenge.
“With that confidence, I will work to ensure that in 2017 every home and family has health,
success and well-being.
“Thank you.”
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Presidency of the Republic Blog, Jan. 5, 2017, Mexico,
DF; translation Presidency of the Republic