Mexico's Economy Isn T Trump But Pemex: Article Analysis

In Don Quijones’ article, “Despite what everyone thinks, Biggest Threat to Mexico’s Economy isn’t Trump but Pemex,” he argues that the decline and downfall of the state-owned oil company Pemex is the most crucial burden to Mexico’s economy rather than the adverse effects of Donald Trump’s presidency. With Trump’s victory in the election, his pledges about trade with Mexico would be detrimental to Mexican economy since 80% of Mexico’s exports go to the U.S. There's likewise risk that Trump could pose to “the remittances sent by Mexican immigrants from the U.S, which amount to nearly $25 billion each year, roughly 2% of the Mexican gross domestic product” (Quijones). While the impacts of Trump’s victory on Mexico are undoubtedly crucial, there

A country’s score indicates the perceived level of corruption in a public sector on a scale of 0 (highly corrupt) to 100 (very clean). Mexico scored a 30 in 2016, ranking at 123/176 least corrupt countries (Transparency International, “Corruption Perceptions Index 2016”). Mexico’s correspondent for The New York Times, Elizabeth Malkin, states that “Mexico has seen a number of corruption scandals that have cost hundreds of millions, if not billions of dollars” (Raphael). In regards to Pemex, the company is expected to surpass the $100 billion threshold in debt by the end of 2016. This excludes the $72 billion of labor and pension liabilities. For over 70 years, Pemex started as an essential national asset but has become a national liability. Some may theorize this all happened by design so that the Mexican government can first overtake and starve Pemex of investments till the last option was to privatize the company and sell the most valuable

According to Krista Hughes’ article, she states that “six in ten Mexican workers, or 30 million people, live in the informal economy,” which erodes Mexico’s already-low tax base and hinders the plans to set up a universal social security system. Labor Minister Alfonso Navarrete adds that “the country loses 3 or 4 percentage points of GDP every year because 60 percent of its workers don’t generate any taxes and also don’t have social security benefits.” Many of these workers are part of construction work, small manufactures, and street stalls. There is a much needed fiscal reform to close off tax loopholes and exemptions. In an informal economy, workers are easily abused and manipulated since there are no labor protections. Workers make the bare minimum in order to survive. Arguably, some may say that an informal economy happens due to culture. Mexico does not have the same systematic tradition as the United States. In its huge informal economy, Mexico is actually practicing the kind of personal independence that Americans so vocally espouse. On the other side of the border, America’s tax supported social systems provide the protections that Mexicans desire from their government. Informal business is a part of every economy. As a result of the country’s unique history, the informal Mexican economy is huge, and while that scale has consequences, both good and bad, the bustling informal economy is a