Monday, October 16, 2017
Mexico: When Trump
only Makes Things Worse
By Guadalupe de la Torre (democraciaAbierta
● Many Mexican households
depend on remittances from abroad, mostly from the United States. How are they to recover from recent natural disasters if
Trump decides to impose higher taxes on them? Spanish
For the second time in two weeks, Mexico was shaken by a magnitude 7.1 earthquake - before, that is, the country had
time to recover from the earthquake on September 7 and Hurricane Katia’s passage over Veracruz. Something the
country demonstrated in this situation was the solidarity of its people, who immediately came out to help those affected.
Good gestures, however, are not enough when what is at stake is the rebuilding a country.
As it is well known, Mexico’s geography makes the
country prone to natural disasters – as was evidenced in recent weeks when, in a matter of just a few minutes, whole
buildings collapsed. Although the country has an early-warning system, it was not effective in this case due to the immediacy
of the earthquake.
More than 30,000 Mexican households depend on remittances from abroad.
The consequences of such a huge natural disaster are truly
devastating. A few days after, the focus logically turns from relief to reconstruction, and the main factor in reconstruction
is, obviously, its cost. While it is certainly true that Mexico is fully aware of the risks that its geographical position
entails, this awareness is rather less evident if we analyze its disaster relief budget.
When attention was still focused on the first earthquake
early in September, some sectors in society began to demand an increase in the budget for rebuilding houses and temples in
the affected areas. Congress was under pressure to reallocate resources from different 2018 budget lines in order to tackle
the new emergencies.
The answer from the Ministry of Finance and Public Credit (SHPC) was that the Fund for Natural Disasters (FONDEN) -
9 billion Mexican pesos (about 482.4 million US dollars) - was "sufficient to overcome the current emergency without
generating any added pressure on public finances." When this statement was released, however, Mexico had not yet been
hit by the second earthquake which threw the country into a state of collapse.
The FONDEN was created in 1996 with the purpose of allocating
resources for the protection of the life and health of the civilian population, and for the reconstruction of federal, state
and municipal infrastructure affected by natural disasters.
While FONDEN is certainly a vital element for ensuring the citizens’
return to their daily activities, it is not the only one. According to a study published by the International Monetary Fund,
remittances from abroad are an important source of income which can stimulate consumption when the economy is going through
a difficult situation, such as in the aftermath a natural disaster. In fact, remittances sent by Mexicans to their families
exceed the revenues of oil and the automotive industries – which comes to show how important this source of income is,
on which more than 30.000 Mexican households depend. During the first half of this year, remittances broke their own historical
record and reached 14 billion US dollars - great news, no doubt, but under a looming threat.
Remittances are threatened by one of the measures proposed
by President Donald Trump.
In Mexico, about 95% of the remittances from abroad come from the United States. This great financial help for many
families is now threatened by a measure President Donald Trump has recently proposed. The US president wants to fulfill, at
any cost, one of his firm campaign promises - the building of a wall along the Mexican border –, and to foot the bill
he has come up with the idea of imposing an additional tax on the remittances regularly sent by Mexicans.
Although, for the time
being, the measure is only a threat, if implemented, it could have serious consequences for Mexicans – especially now
that the country needs as many resources as possible to recover from the consequences of the recent natural disasters. May
Trump put his cruelty aside regarding the wall, the division and taxes, and realize that his neighbor is in dire need of help.
article was published on Oct. 11, 2017 at democraciaAbierta / openDemocracy.net, under a Creative Commons license. Guadalupe de la Torre is a journalist. She holds a Master’s
degree in Contemporary Latin American Studies from the Universidad Completeness' in Madrid.