The only way out of these historic challenge is by working TOGETHER
Sharing my Op/Ed piece from today in Mexico’s national Daily “El Universal”
https://www.eluniversal.com.mx/opinion/luis-duran/la-unica-salida-es-trabajando-en-union
The only way out of this is working together
By Luis Duran*
Economists are unfortunately used to talking about economic crises. In fact, the general population is used to talking about this naturally and relatively regularly. It is something that we seem to have accepted that just simply happens on a regular basis. As one of my teachers of Economics at the TEC in Monterrey said, it seems that humanity does not learn and simply gets used to the fact that there will be crises with some frequency. Now that we are living the terrible reality of COVID-19, we run the risk of downplaying it as yet another economic crisis. Nothing can be further from reality. The destruction of value that is taking place globally is simply unprecedented.
The combination of health crises everywhere and the great uncertainty it has generated, has led to what can not be described as a crisis, but as the destruction of economic structures, value chains, institutions and companies that, until a few months ago, was impossible to imagine. The real fear of infection while seeking at all costs to avoid collapsing the health structures of countries, has led us to have individual restrictions unparalleled in the modern history of mankind. Not even in either of the two World Wars can we say that all the countries of the world were affected in this way. There is virtually no sector or economic activity that has not been dramatically affected by the effects of this pandemic. Just a few weeks ago we received with concern some of the IMF's new projections on World Economic Growth: - 10.5% for Mexico, -8% for the United States and -5% for the global economy. There are forecasts that Mexico may have 15-16 million people who could return to poverty. The unemployment figures are also very worrying: more than 2 million formal jobs are lost. And we also know that of these lost jobs, the majority occur in the most vulnerable groups in society: the less skilled, young people, women and migrants. These figures should put us all on alert. José ángel Gurría, the Secretary-General of the OECD warns us that urgent action is needed to prevent this employment crisis from turning into a large-scale social crisis.
As we have commented in this column in the past, the only way we can get out of this tremendous destruction of value sooner is by working together for our country. It is time to leave behind the world of extremes, where we see with concern how even health issues can turn into ideological positions with political tints. It is essential to leave behind our differences and look for what should unite us all: the care of the health of everyone in Mexico, the recovery of our jobs and the well-being of our economy. Yesterday we saw an example of the collaboration that all of us are looking for: an agreement was announced on the initiative to reform the general pension system by the Federal Government, Business Organizations and Trade Unions, which will bring the retirement incomes of Mexican workers above the welfare line. This shows that, if we work together, we can find creative and innovative solutions to very complex problems, even in the midst of the enormous challenges we are experiencing. This agreement would reduce the number of weeks needed to qualify for this program from 1250 to 750. This would increase coverage from 25% to 75% and allow workers to move more easily through the reality of formal and informal jobs in our country. Employers will gradually increase their contribution to pension plans from 5.15% to 13.87% to make retirement income more similar to their last salary, while workers and government keep their contributions at the same level. Good for the CCE and business organizations for taking the initiative to decisively improve the well-being of Mexican families. Good for the unions and the Federal Government that are pushing this reform. Everyone working together for our country. Sometimes it will be the business sector, other times it will be the government. All working to improve the economic condition of Mexican workers. In the end, by working together, we all win.
* CEO of Strategy Primus and President of the COPARMEX National Education Commission @LuisEDuran2