GENERAL SITUATION IN MEXICO
Weekly Review #97 I March 23, 2022
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MANUFACTURING INDUSTRY MEXICO IS PROPOSED TO BET ON THE MACHINERY AND ELECTRICAL DEVICES INDUSTRY.
Mexico would consolidate its position as an export leader by expanding its manufacturing sector to areas such as machinery, according to Bain & Company. Mexico could consolidate its position as a leading export market in the manufacturing sector, with an increase of 2 percentage points to reach up to 7%, which would be equivalent to 8 billion dollars annually in addition to the amount that the industry usually produces, according to a research study by Bain & Company. The number of people employed in the manufacturing sector grew 2.3% at an annual rate in January, recording 13 months of growth, according to Inegi.
“It is an area where Mexico has grown in recent years but has traditionally focused on the automotive, food and beverage sector, which account for more than 80% of imports to the United States. We see other sectors such as the machinery industry, where countries like China have been among the strongest. Currently, the trade crisis between the United States and this country makes companies rethink in the next 10 years how to build a more resilient supply chain,” explained Jordi Ciuró, partner at Bain & Company in Mexico City, in an interview for Forbes Mexico. Among the sectors with potential, the expert highlighted electrical devices and machinery, where the
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MANUFACTURING INDUSTRY
country could become a hub driven by foreign investment, which would allow Mexico to become a more relevant supplier for the United States. The COVID-19 pandemic caused 75% of the world’s companies to register interruptions in their supply chain, where the chip and container crisis stands out, which continue to affect the supply of various product ranges, so companies are looking for new markets to decentralize their production operations to minimize the impact on their finances and guarantee consumers access to their products. “The pandemic aggravated the logistics crisis, and the shortage of microchips has made companies reconsider the comprehensive strategy to make their chains more resilient. There is a key factor: the proximity of suppliers to where they manufacture, and Mexico plays a more attractive role. We believe that there should be a greater increase in nearshoring of supply chains in the country in the coming years,” he added. The expert highlighted four points of analysis that companies take into account to invest in the country: the perception of Mexico focused on manufacturing and labor; the insecurity of the country, the logistics infrastructure (which offers ease of shipping across the border in the United States) and finally, the ecosystem of suppliers. “Moving production and supply chains takes time and investment, so we also have to decouple the punctual moments of the events we are currently going through. The point that I think is most relevant and I think that can stop industries from nearshoring in the country is that they find the relevant supplier ecosys-
SOURCE: Forbes Mexico
tem that makes them feel comfortable because there is flexibility and (so) an entire industry will develop around them that will provide them with what they need,” Ciuró said. According to Bain & Company, almost 70 companies that were not in the country before the pandemic moved their operations to Mexico, mainly sectors focused on appliances, electronics, furniture, and plastics. “Mexico has the potential to grow at 6%, which would mean an impact of more than 8 billion dollars in terms of growth in value of the export sector. We know that this sector employs almost 3 million workers by 2021 and in that percentage range, could grow employment in the coming years, but it depends on the automation process,” Ciuró highlighted.
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GOOD NEWS COVID IN MEXICO REACHES MINIMUM LEVELS: LOPEZ-GATELL
Mexico has had eight consecutive weeks in the reduction of COVID-19 cases, informed the Undersecretary of Health, Hugo Lopez-Gatell. “We have a minimum incidence of cases compared to the period of more than two years of the epidemic; we will surely reach a point of the minimum activity that will last for several weeks,” said the official in a morning conference. The mortality indicator shows a 96 percent reduction compared to the peak of epidemic activity in the second wave. Despite the encouraging scenario, Lopez-Gatell did not rule out the possibility of a new wave of contagion in Mexico, as has occurred in other parts of the world. “It all depends on the biological characteristics of the virus; this virus mutates and transforms and gives rise to others with different behavior (...) It is not possible to predict which new variant will occur, depending on the transmission dynamics, variants with these characteristics are selected”. As of March 21, the country accumulated 5,635,500 positive cases and 322,107 deaths due to the SARSCoV-2 virus; 671 new infections and 15 deaths more than a day earlier.
SOURCE: El Financiero
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KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference March 16-22, 2022
COVID-19: • Concerning the fact that several states have eliminated the mandatory use of masks in public spaces, the President commented that state governments have the autonomy to apply sanitary measures, even if they still have to consider the recommendations made by Hugo Lopez-Gatell. • Hugo Lopez-Gatell highlighted that 186,796,040 doses of the COVID-19 vaccines had been applied in the country. The President assured that Mexico ranks 10th in the world regarding vaccination. ECONOMY: • The President assured that the country has economic growth. However, due to the new economic crisis derived from the war, he stated that Mexico is located in the first places with more opportunities for investment in the world, which will allow the full activation of air and cargo transportation. INFRASTRUCTURE: • Andres Manuel Lopez Obrador pointed out that the government is working on revamping two ports in Mexico, Coatzacoalcos, and Salina Cruz. This will help upgrade the commerce on the east coast, opening up to new opportunities with the U.S. and China. He will also revamp the road from the Istmo to Guatemala and the railroad from Catzacolaco to
Palenque. He pointed out that this will be finished next year and that the budget for these projects is already in place. • Lopez Obrador will make an investment of 30 billion pesos in Chiapas. He will use the assets for cargo trains and passenger trains and the modernization of the port of Chiapas. In addition, he will continue to help develop infrastructure in the area. FELIPE ANGELES AIRPORT: • About the opening of the Felipe Angeles Airport (AIFA), the President stated that the project is extraordinary and will help relieve the saturation of the International Airport of Mexico City. AeroMexico, Volaris, Viva Aerobus, Convias, and some foreign airlines have already confirmed that they will fly from this airport. He assured that they are working on five different projects to improve access to the AIFA, have connectivity between the two airports, and guarantee public transportation that will get people straight to the airport. HEALTHCARE • Dr. Jorge Alcocer, head of the Ministry of Health, highlighted that during 2019, the healthcare system and the system of free medications were improved. He emphasized that the shipment, delivery, and receipt of medicines will be monitored so that those
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who need them receive them free of charge. • The President said that the federalization of the system would strengthen the healthcare system. Zoe Robledo presented the plan of the “IMSS Bienestar”. In the plan, the President wants the “IMSS Bienestar” to operate all the hospitals that are currently operated by the states. This system will be implemented for people who don’t have social security. Zoe Robledo also informed that they have toured all over the country to analyze the gaps in the health system and what is necessary to improve it. REPORTER DEATHS AND EUROPEAN PARLIAMENT RESPONSE: • AMLO sent his condolences for the murder of journalist Armando Linares in Zitacuaro, Michoacan, and disassociated any public servant from the violent acts against reporters. He emphasized that the members of the European Parliament defend the interests of corrupt companies and therefore seek to strike his government. SECURITY • AMLO expressed that due to the violence inherited from the neoliberal period, there are still homicides in the country. However, two strategies are being applied to reduce crime: the first is to attend to the causes of the people through welfare programs, and the second is not to allow organized crime to be associated with the authorities so that there is no impunity. • Cuitlahuac Garcia, governor of Veracruz, reported that the state went from being in the first places in the crime rate to number 22. SECURITY IN STADIUMS • Regarding the events at La Corregidora stadium in Queretaro, Ricardo Mejia Berdeja, sub-secretary
SOURCE: https://www.youtube.com/channel/UCxEgOKuI-n-WOJaNcisHvSg
of Public Security of the SSPC, affirmed that there are 35 search warrants and 25 people have been arrested, of which four are accused of attempted homicide and the rest of them for violence in public stadiums and for the apology of crime. He also commented that he talked to de Mexican Futbol Federation, and they have announced the protocols and sanctions that will be imposed. Finally, the President mentioned that additional measures in the stadiums would be presented next Wednesday. MANDATE ABSOLUTION VOTE: • The President accused INE of being complicit with the opposition and not informing citizens about the mandate absolution. He said that even if the 40% of participation is not obtained and more people vote for him to leave the government, he would resign from the presidency. • The President celebrated the publication of the decree that allows the opinions of the functionaries about the exercise of the revocation of mandate because it will enable everyone to talk about the matter. MIGRATION: • When questioned about the increase in the migratory flow in Chiapas, the President considered that the best option to the migratory phenomenon is what has been proposed and done: the creation of jobs in Central America and creating better living conditions. He proposed to invest in Guatemala, Honduras, and El Salvador, expressing that two programs are already being applied in these last two countries; Guatemala is missing, hoping that soon it will accept Mexico’s cooperation. He also pointed out that he will continue to insist that the U.S. government takes action in this regard.
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MEASURES TAKEN BY STATES IN MEXICO
BAJA CALIFORNIA The State of Baja California maintains favorable figures for COVID-19, and it remains low-risk or green light with 306 active cases in the past 14 days. The vaccination plan continues with the booster, first and second doses to the adult population. Sanitary filters, taking temperature and antibacterial gel, as well as the use of mandatory face masks in closed spaces, must be carried out by the establishments, mentioned the health secretary of Baja California. Different organizations met with the Minister Counselor for Economic Affairs of the United States Embassy in Mexico, and with the person in charge of Economic Affairs of the United States Consulate General in Tijuana to discuss the importance of the binational relationship, the security that affects both sides of the border, the USMCA, on issues related to energy and other matters of mutual interest.
SONORA The State of Sonora is considered as lowrisk or green light. Official reports confirm 43 new cases in the last 24 hours. This week, the vaccination plan continues with the booster application to the adult population. The health secretary of Sonora informed that the “Strengthening Plan” for the rehabilitation and maintenance of 100 Urban and Rural Health Centers of the entity continues to improve primary care in public health services.
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MEASURES TAKEN BY STATES IN MEXICO
COAHUILA Coahuila announced this week that it will be one of the first entities in the country to immunize minors from Acuña between the ages of 5 and 11 against COVID-19, thanks to a cross-border action. TAMAULIPAS Governor Francisco Garcia Cabeza de Vaca stressed that the vaccination of children from the age of 5 will begin, and it is to give peace of mind to teachers, but above all, to parents. NUEVO LEON The State Ministry of Economy will place 2,300 million pesos, in which Nacional Financiera will grant guarantees for the Impulso Nuevo Nuevo Leon Program, which has the objective of supporting Micro, small and medium-sized companies that are coming out of the crisis caused by the pandemic.
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MEASURES TAKEN BY STATES IN MEXICO
AGUASCALIENTES During the last two years, related to the COVID-19 pandemic, mental health has generated greater attention in the state of Aguascalientes in minors and adults, since according to the information provided by the College of Psychologists of the state, an increase of 60% has been noted: “We have seen a greater need for attention in children and adolescents than two years ago, and the disorders mainly involve depression and anxiety, including obsessive-compulsive disorder, post-traumatic stress disorder, panic attacks, social phobia, higher rates of depression,” said Alejandra Haydee Sandoval, president of the College of Psychologists of the state. The same source informed that there are no statistics in general on the mental health of the population. Still, they report that at least more than half of the population is not receiving mental health care, since it has been seen that private treatment has become saturated and has a higher cost, compared to public treatment, which, although much of the time the attention is free, there is not much diffusion of the spaces for mental health care.
QUERETARO The Secretary of Health of Queretaro reported this Monday, March 21, zero deaths due to COVID-19. However, in the last three days, 34 cases of the disease have been added in the state, and at the moment, there are 4 municipalities free of infection. The municipalities that no longer have COVID-19 cases are Landa de Matamoros, Toliman, Huimilpan and Amealco. A total of 128 patients were discharged from the hospital, resulting in 130,435 discharges (95.01%). There are 187 patients with mild symptomatology, isolation, and home management and 32 hospitalized, 13 of whom are in serious condition. Six thousand 620 deaths have been recorded. Concerning the availability of general hospitalization beds and beds with ventilators, with information as of March 20, there is an occupancy rate of 16 percent, based on the Negative Network of Acute Respiratory Infections (IRAG). In Queretaro, 14 percent occupancy of beds with ventilator and 16 percent occupancy of beds without a ventilator.
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MEASURES TAKEN BY STATES IN MEXICO
GUANAJUATO The COVID-19 pandemic in Guanajuato, as well as in all of Mexico, has entered a very low-intensity stage. However, it has not ended because there are still 42 people hospitalized throughout the state with acute respiratory infections, of which 20 have already been confirmed to have COVID-19. Cumulatively with the new infections over the weekend, Guanajuato now has 281,154 confirmed and recognized cases during the last 2 years of health contingency. Of these cases, 265,597 are people who have recovered, but 15,068 Guanajuato residents have not been able to overcome the disease and have already lost their lives. As for the number of active cases, there are only 475 cases, which corresponds to citizens who have been infected with this disease during the last 7 to 10 days. JALISCO At the end of the ninth week of the return to classes in Jalisco, the rate of active cases of COVID-19 detected in basic education schools is 0.0003 percent in students, that is, five active cases; on the other hand, eight cases were registered in educational personnel, which is equivalent to 0.0065 percent of the total staff. Cases were identified in 30 schools, cor-
responding to 0.22 percent of the 13,415 basic education schools. According to the epidemiological follow-up carried out by the Ministry of Health of Jalisco, in coordination with the Ministry of Education, it is reported that in the 3 to 14 years old age group, who attend basic education, 89 cases started symptoms in the last 14 days, five of which were identified in schools. Most of the positive cases in this age group occurred in the Guadalajara Metropolitan Area with 75 due to the higher demographic concentration. According to the Ministry of Education, 87.94 percent of preschool, elementary and high school students attended this last week; that is, 1,460,266 students decided to return to the onsite educational model. A total of 99.64 percent of schools are open to receiving students in their classes. Since January 19, the COVID-19 Random Test Application Model for Educational Personnel was implemented in schools. This week, a total of 677 antigen tests were taken in 61 schools, of which six were positive, i.e., 0.9 percent positive.
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MEASURES TAKEN BY STATES IN MEXICO
SAN LUIS POTOSI The Federal Ministry of Health ratified the green traffic light for two more weeks for San Luis Potosi, which will be from March 21 to April 3. In recent weeks, the state has managed to reduce the number of daily infections and deaths due to COVID-19. One death was registered with data until March 21 due to the virus. Given the proximity of the Easter holiday period, and taking into account the epidemic traffic light for the state, it was determined that the permitted capacity in places will be 75 percent and in camps will have to respect 50 percent of the capacity and the importance of taking care of vulnerable groups such as minors and older adults are reiterated. The State Committee for Health Security and Health Services, regarding the COVID-19 daily report of cases, informed that 153 new infections had been reported in the last 24 hours, registering 179,120 total cases of this disease up to this day.
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MEASURES TAKEN BY STATES IN MEXICO
STATE OF MEXICO State of Mexico registered a 67% decrease in positive cases since the beginning of March. This signals good news for with the AIFA (Felipe Angeles Airport) opening, a report by Excelsior states that economic activities and regional development will skyrocket. This entails a golden opportunity for the Valley of Mexico, according to Alfredo del Mazo, Governor to the State of Mexico, and Omar Fayat, Governor to the state of Hidalgo. CDMX CDMX’s COVID-19 cases evaluation granted another two weeks of open economic activities. The Head of The Federal Educational Authority, Humberto Fernandez, stated that schools will go back to their usual activities from lower school to high school and that especially those students going through educational setbacks due to the pandemic will receive special attention as they rejoin full school hours.
NATIONWIDE: Mexico is fully green on the COVID-19 pandemic scale for the first time since the virus arrived in 2020. The vaccination efforts and precautionary facemask use are what Hugo Lopez Gatell reports to be the reasons behind it. This will ensure prosperous economic activities, for it is the first time in two whole years that the country is operating with “business as usual.”
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ECONOMIC RECOVERY MEXICO NOW HAS ITS BUSINESS CENTER FOR ATTRACTING FOREIGN INVESTMENT The Ministry of Economy started operating the “Invest in Mexico” business center, which is located in the Executive Tower of this agency and whose objective is to attract and promote foreign investment in the country. The Ministry, headed by Tatiana Clouthier, explained that potential foreign investors will receive personalized assistance to carry out the process of establishing their projects in this center. The services offered are: the provision of economic and commercial intelligence information, the approach with other agencies and local authorities, the linkage with companies and suppliers of the productive chain. The Global Economic Intelligence Unit of the Ministry of Economy is the area in charge of this new mechanism. Those interested in making use of the business center, according to the Secretariat, must have a pre-investment project and be referred by one of the following: Mexican Representation Abroad, Accredited Diplomatic Representations in Mexico, promotion agencies of other countries inside and outside Mexico and/or bi-national chambers. “The Ministry of Economy invites investors abroad, companies, chambers, Mexico’s representations abroad, embassies accredited in Mexico and insti-
SOURCE: Forbes Mexico
tutions involved in attracting foreign investment to spread the word about the ‘Invest in Mexico’ Business Center,” it said in a statement. On December 14, Clouthier announced this project, which was designed to help and advise foreign investors in the analysis, planning, establishment, and expansion stages of their activities in Mexico. Invest in Mexico is a project that will be constantly fed and verified by federal government agencies. It will also receive feedback from user companies.
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TOWARDS THE “NEW NORMAL”
DISTRIBUTION OF DEATHS PER STATE DUE TO THE PANDEMIC
INFORMATION UPDATED ON MARCH 21, 2022 AT 19:00 HRS LOCAL TIME.
NEW CASES REPORTED: 1,018
SOURCE: https://www.gob.mx/salud/
CONFIRMED CASES: 5,635,500
NEW DEATHS REPORTED: 15
CONFIRMED DEATHS: 322,107
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INCREASE OF CONFIRMED CASES SINCE THE FIRST REPORT MAP WITH THE DISTRIBUTION OF THE INCIDENCE RATE OF ACCUMULATED CASES OF COVID-19 BY ENTITY OF RESIDENCE.
National rate 9.58
0 to 10.0 (24 states)
40.1 to 50 (1 states)
10.1 to 20 (5 states)
50.1 to 60 (0 states)
20.1 to 30 (0 states)
60.1 to 70 (0 states)
30.1 to 40 (2 states)
>70 (0 states)
Elaborated by Prodensa with information from the Health Ministry of Mexico
PANDEMIC’S SITUATION IN THE WORLD • As of March 22, 2022, globally there have been reported 469,212,705 confirmed cases (12,415,488 new cases since last week´s report) of COVID-19 and 6,077,252 deaths (34,158 new deaths*).
SOURCE: https://www.gob.mx/salud/
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TOWARDS THE “NEW NORMAL” INCIDENTS OF CONTAGIONS IN THE POPULATION BY REGION AS OF MARCH 21
DEATH INCIDENTS IN POPULATION BY REGION AS OF MARCH 21
SOURCE: https://www.gob.mx/salud/
LABOR
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ALVARO GARCIA HR, Vice President
FIRST 2022 WAGE INCREASES SURVEYS Every year in Mexico, wages that are part of the collective bargaining agreement (CBA) must be negotiated. Benefits must be scheduled for revision every two years. The majority of CBAs in Mexico are revised during the first 90 days of the year between January and March. The first 2022 surveys showing the percentage wages have increased this year due to the CBA revision have been released. The average increase for hourly workers’ wages varies from city to city and from industry to industry. National data shows 6.9% as the average increase (just for wages not considering benefits). One industry that has shown a higher average increase is the automotive industry. The majority of the companies have increased higher than what they had budgeted but still below the latest annual cost of living indicator. The inflation rate for last year ended at 7.36%. Therefore wages and salaries increases have been impacted by that official economic indicator.
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