It’s been 10 days now since President Enrique Peña Nieto liberated the price of fuels, sparking general outrage that has even turned violent, as some 1,200 business have been looted — 423 (at last count) supermarkets and the rest convenience stores.
On Monday, the president made his third public appearance to explain that the price hike and liberation were not the result of his Energy Reform or an increase in taxes. He met with representatives of labor and agricultural unions and business leaders to sign a document called the “Agreement for Economic Strengthening and the Protection of Family Economics,” in which all parties agreed that the best path to return to a peaceful nation was accepting the president’s fuel hikes.
Yet on the streets, protesters were not paying heed at what was going on at the presidential residence of Los Pinos. Demonstrations, big and small, continued nationwide leading even to the very gates of the United States, where Customs and Border Protection authorities shut down the San Ysidro border across Tijuana for four hours due to the presence of protesters.
The hour-and-a-half long gathering at Los Pinos indeed brought together the good will of many people who pleaded — at least on paper — they would not increase prices and agreed with Peña Nieto that the most important item on the January Mexican economic agenda was to prevent an upsurge on inflation, as the 2016 final tally of it going up was at 3.36 percent, a point higher than the previous year.
President Peña Nieto has decided to stand his ground on the price hikes and whatever they provoke in the upcoming months.
“There are other challenges coming up, as this is a very complex year, but we’re going to overcome this together,” he told the gathering.
There were two speakers on behalf of the government — Treasury and Public Finance Secretary (SHCP) José Antonio Meade Kuribreña and Labor Secretary Alfonso Navarrete Prida — who stood behind the president in trying to work out an arrangement to pacify the nation, with the same argument (that has not convinced anyone) that the increase in gasoline, diesel, gas and electricity prices is the best economic path to continue on.
There was some irony from the president of the still-powerful Mexican Workers’ Confederation (CTM) Carlos Aceves del Olmo who somewhat scornfully recalled that similar production and productivity agreements had been signed in the past with other presidents with no visible results.
He even told the anecdote that CTM leader and founder Fidel Velázquez had once been ordered by a president to have workers “tighten their belts,” to which Velázquez responded that “workers don’t earn enough to buy a belt.”
Aceves del Olmo also told Peña Nieto that the times of organized labor responding “whatever you want, señor president” are over.
Yet in the midst of all this, Peña Nieto said that he is committed to preserving “the economic stability of the nation” through further cutting out government expenditures for this year, as Congress already slashed the government’s budget by 190 billion pesos ($8.8 billion).
The question now is how influential this top economic meeting the president called for last week is going to be. If it’s like CTM’s Aceves del Olmo says, then it will not travel far before it fizzles.
What remains also a mystery is how the fuel hikes are going to impact family economics in the short-run. The president told businessmen and agricultural producers that the fuel price increase was no motive to up the prices of consumer goods, as “fuel influences very little on production costs.”
And he repeated that the elimination of subsidized fuels is a determining measure to protect stability conditions that have been upheld for over three decades.
All in all, the pact for economic protection of the family supply was a show of uplifting speeches, in which all production sectors would snoop on each, watching that nobody increases prices.
Yet in to this observer what went on there at Los Pinos looks like it will not work, because prices are changing;. If the president wanted a liberated prices economy, he has one, but prices will indeed go up, thanks to what he says should not affect the nation’s economic stability, which is, of course, his gas hikes.
But at least the government is promising that the social commitments it has, such as increasing handouts for those in dire need, will continue unabated.
Well, at least there was a result out of an economic pact that from the looks of it, and the growing protests on the streets, will not fly.
These 10 days may have not shaken the world, but they sure have moved the rug under President Peña Nieto’s footing.
What else will President Peña Nieto do to stop the discontent? That’ll be a theme for the next column.
