Mexican President Andres Manuel Lopez Obrador on Saturday urged fellow leaders from the 20 biggest world economies (G20) to steer clear of debt and bailouts in the efforts to handle the COVID-19 crisis that has caused a global recession.
From the start of the pandemic, which has claimed at least 100,000 lives in Mexico, the government has eschewed taking on debt to fund bailouts for businesses or cash payments for workers – a different approach from many other nations that have sought to cushion the economic blow.
In a report directed at G20 countries this month, the International Monetary Fund (IMF) singled out Mexico along with Brazil, Britain and the United States as countries that should increase fiscal support next year beyond projected levels, saying that pulling back could jeopardize recovery.
Within G20, Mexico is the country with the least fiscal support spending as a percentage of gross domestic product.
“Economic recovery must happen from the bottom up. First help the poor, and don’t focus government actions just on granting public funds to companies or financial institutions in bankruptcy,” Lopez Obrador told the G20 summit, which is being held virtually.
“Avoid taking on debt and even less so if it’s for the benefit of a few, at the cost of the suffering of many,” he said.
Mexico’s economy is forecast to shrink almost 10% in 2020, its deepest annual contraction since the Great Depression.
Lopez Obrador also called on countries to avoid “authoritative measures” such as confinement and curfews, and to have more trust in people to act responsibly in curbing the spread of the novel coronavirus.