Home | Columns, Commentary and News | Reports | Links | About/Contact

media 111317 Presidencia

Monday, November 13, 2017

Earthquake Reconstruction is not a Mix of Public and Private Funds

Presidency of the Republic

  • “The funds that the government is spending come from taxpayers’ contributions to the public finances of the country and from society as a whole,” EPN.
  • Reconstruction will require approximately 48 billion pesos, he said.
  • During an event with the private sector, which is participating in the reconstruction work, the president explained that a tenth of the funds required will come from this sector.

At the Official Residence of Los Pinos, Mexican President Enrique Peña Nieto reported that the government estimates that the reconstruction work due to the damage caused by the earthquakes in September will require an investment of approximately 48 billion pesos [US$2,512,800,000].

At the event, during which actions by the government and the various private sector foundations and institutions that have become involved in the reconstruction work were evaluated, the President of Mexico declared that Mexicans are the largest contributors to the assistance provided by the government.

He said that, “The government is allocating resources which are its responsibility; funds from taxpayers to the public finances of the country, come from the population, from those who pay their taxes responsibly. This enables the government to assign this amount of resources for reconstruction."

Noting that a tenth of these resources will come from the private sector, the president declared that the government will offer advice on where to allocate these resources in order to avoid duplication; “Let us prevent the same work, or efforts by two sources, from focusing on the same target.”

The president said that the government will provide a portfolio of options on where to direct the resources that the private sector is managing, adding that, “The sum of efforts is what is really enabling the country to get back on its feet, especially in the parts of the south and center of the country that were affected." 

“I am convinced that the sum of efforts by the Government, private organizations, the private sector, and civil society, will enable the families affected to have new homes, rebuild their cities and reconstruct cultural spaces,” he said.

After acknowledging and appreciating the effort made by the private sector in support of the affected population, he said: "At the end of the day, the sum of efforts will not only enable us to ensure that we are doing the reconstruction well, but also that we are really driving the transformation of the communities that were affected.”

The president declared that the government will be absolutely transparent about the way it spends the resources it has assigned for reconstruction work. "The public funds the government has allocated for reconstruction work are displayed on the transparency website, which anyone can consult,” he declared.

He explained that transparency is an, “Additional component we are seeing today, different from other efforts that have been made in the past in the wake of events, hardship or natural disasters.”

He said that the Law provides that Transparency website on the funds allocated by the government, to which contributions from the states are added, will also include the funds collected by the private sector and reported to the Tax Administration System.

President Peña Nieto declared: “We must make it clear that the funds have not been combined. Let's clear up that doubt: we are not adding private funds to the public funds allocated by the government: they are being administered separately."

In the meeting, it was announced that in addition to providing support for reconstruction work, the population is being incorporated into the banking system, since one of the most important challenges, in terms of housing reconstruction, was the definition of the payment mechanism and the means of making it effective, which involved opening a savings account, accompanied by a debit card, so that it would translate into materials and funds families could use.

President Peña Nieto announced that support has been provided for housing reconstruction, in Chiapas and Oaxaca alone, for over 73,000 affected families, “And in this same month, in the next few days, we will be delivering or distributing cards to the other states affected."

He pointed out that in total, in all the states affected by the earthquakes, 184,000 houses, nearly 14,000 shops and 16,000 schools sustained some form of damage. Of the country’s cultural heritage, 1,821 buildings and churches, 175 medical units and hospitals, and 140 roads were affected.

Noting that over six million people saw their electricity services and drinking water supply suspended as a result of the earthquakes, the president declared that two months later, electricity has been fully restored together with 99.8 percent of the water supply.

Traffic has been restored on all the roads affected, 98 percent of medical units are operating, hospitals that suffered partial damage are being repaired, together with most of those suffered major damage.

“Support is being delivered. Where cards have not yet been delivered, they are on their way, because this has involved an enormous effort to take the corresponding censuses. But, in the end, all those affected have been attended during this emergency. They have been supported so that they can have shelter and food and not remain homeless,” he added.

The president expressed his appreciation for the work that Mexico City and each state government has done, because, “They have assumed a very constructive attitude, in coordination with the government, which has made it possible to increase the capacity to address this challenge."

He added: “I would like to express my thanks for the solidarity Mexicans have shown. In the end, Mexican society has been the biggest contributor to this effort to cope with the emergency and carry out reconstruction work."


Secretary of Finance and Public Credit José Antonio Meade Kuribreña, pointed out that two months after the earthquakes that affected the country, one of the guidelines established by President Enrique Peña Nieto, to urge civil society to become involved in the reconstruction work, was implemented with generosity, solidarity and creativity. “Society and government have worked together for the benefit of Mexico and Mexicans,” he declared.

He said that all the support received from civil society and the Federal Government should be effective and transparent. For this reason, efforts were made to, “Make each peso that has been mobilized for this purpose transparent,” so that, “Society, as a whole knows about all the sources of funds and how they have been used."

"Civil society has played a very important role at every stage of dealing with the consequences of natural disasters. It mobilized itself at the start of the emergency, and accompanied public servants, our Armed Forces, the Federal Police, and institutions such as the Red Cross and the United Nations (UN),” said Meade, who also highlighted the importance of the collaboration of the Fuerza México Trust, the Slim Foundation, the country's banks, and insurance companies, among others.

He said that 100 percent of the nearly four billion pesos of funds contributed by civil society and the private sector, and in some cases by donations from abroad, will also be transparent.

“Mexicans will be quite clear, as a result of the commitments assumed here, about each of the sources of funds that reached the authorized grantees and each of the uses made of these funds,” he declared.

During the event, Undersecretary of Expenditure of the SHCP, Fernando Galindo Favela, provided the latest figures for the amount of funds authorized during yesterday’s session of the Natural Disasters Fund (FONDEN) which, he said, amount to $12.990 billion pesos, "$3.509 of which correspond to Oaxaca, $2.035 to Chiapas, $3.717 to Morelos, $1.664 to Mexico City, and $973 to the State of Mexico." He explained that $7.3 billion pesos correspond to the education sector, and $3.5 billion to the housing sector.


Manuel Escobedo Conover, President of the Mexican Association of Insurance Institutions, explained that 38,832 compensation requests have been submitted to the insurance sector; 4,449 claims have been handled, and that losses are estimated at $16.447 billion pesos. He said that work is underway to submit a proposal to expand catastrophic insurance coverage, by providing microinsurance through FONDEN.

President of the Business Coordinating Council, Juan Pablo Castañón said that during the first weeks of emergency, companies delivered and channeled over 13 billion pesos.

He said that the private trust Fuerza México was set up to focus aid and coordinate societies' initiatives with society, to ensure that support reaches the places where it is most urgently needed, quickly and with quality and transparency.

"We are not only going to reconstruct buildings or houses. The aim is to revive the social and productive life of those who have been most severely affected and live in the most isolated areas,” he said.

Marcos Martínez Gavica, President of the Mexican Association of Banks (ABM), indicated that the banks dealt with the crisis: "Banks never stopped and never stopped serving their customers." They also raised funds for reconstruction, and by November 3. they had collected 403 million pesos. He explained that programs were set up for the partial or total deferral of interest capital payments for small businesses and for individuals; and new grace periods were established so that they can begin to pay their debt obligations as of next year.

Antonio Molpeceres, Resident Coordinator of the United Nations System in Mexico, acknowledged the efforts and actions of the Mexican people in response to the emergency. “The Mexican State and civil society responded in an exemplary way to help the affected population,” he said. Likewise, on behalf of the UN, he reiterated his commitment to accompany the Mexican State, in ensuring a more prosperous and resilient country, and as the spirit of the 2030 Agenda indicated, without leaving anyone behind.

President of the Telmex Foundation Carlos Slim Helú expressed his gratitude for the joint work between the government, private enterprise and civil society two months after the first earthquake that affected Chiapas and Oaxaca. 

He explained that a few days after the first earthquake, on September 13, “We invited the entire population to donate to the Foundation, and for each peso donated we would contribute five. This meant that in 27 days, we collected donations, from the Foundation and over 217 thousand donors, of 2,437, 668,811.44 pesos,” which is now in the United Mexican Fund.

He thanked President Enrique Peña Nieto for the initiative of this joint work, “And I would just like to say that we are ready to speed up our activities for this great challenge and national project for the reconstruction and transformation of the affected areas."

On behalf of the Mexican Red Cross, Commander Isaac Oxenhaut said that by the end of October, over 4,200 tons of aid had been delivered, benefiting more than one million people in the affected states. He added that 240 million pesos have been received in donations, of which about 105 million pesos have been applied both in the operations and in the purchase of supplies, and there is still a balance of 135 million pesos, which will to continue accumulate over the next few days in bank accounts.

Lastly, Alejandro Ramírez Magaña, President of the Mexican Business Council, reported that the Fuerza México trust has received 224 million pesos to date, which have been separated into 154.554 million pesos and $3,715,000 USD. He said that he is about to receive donations from several more companies totaling at least 150 million more pesos.

Concerning the transparency criteria that have been established for this trust, he pointed out that it has included citizens of social standing and experts in transparency in its technical committee. He highlighted the signing of a collaboration agreement with the National Institute of Access to Information to make various documents available in its electronic portal such as the contract, operating rules, the way the technical committee was formed and financial statements.


Presidency of the Republic, Nov. 13, 2017, Mexico City; translation Presidency of the Republic

Share/Save/Bookmark Tell a Friend New Page 1

FAIR USE NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving such material(s) for informational, research and educational purposes. As such, we believe that this constitutes a "fair use" of any such copyrighted material as provided for in Section 107 of the U.S. Copyright Law.