Politics: AMLO’s social budget priorities and what they really mean for low-income households

MEXICO - Report 20 Sep 2021 by Guillermo Valdes and Francisco González

Where an administration chooses to allocate funding can provide a fairly reliable idea of that government’s real priorities, and a review of the 2022 spending budget reaffirms the priority President Andrés Manuel López Obrador assigns to social spending, especially when it comes to funding the programs launched by his administration, with the place of honor reserved for his expansion of the generalized pensions for seniors, now accounting for 73% of funding for AMLO’s signature social assistance programs.

But budget numbers can also be deceiving. The increases in social spending budgeted for 2022 are significant and especially crucial given the grave situation families are facing as a result of the combined impact of the health and economic crises. But as a recent study has shown, AMLO’s cancelation upon taking office of existing social programs depressed coverage in 2019 to only 26% of households, a far cry from the 50% level the administration has claimed to have achieved. The study also notes that even the current 30% rate is extremely low in a country where 49% or more of the population lives in poverty. Furthermore, by having eliminated the previous administration’s social program focus and expanding coverage to every income group, the impact of such programs on the poorest has been greatly reduced, with only 37% of households in the first income percentile benefitting (as opposed to 61% in 2016), while 22% of the wealthiest households are also receiving such assistance, with their per family take enjoying a disproportional increase.

The Ministry of Health is the other area that stands to benefit from a major budget expansion, but that is also a belated effort to compensate for the severe funding deficit that greatly constrained efforts to attend to public health during the almost two years of the world’s worst pandemic. And despite the extent to which such funding is being expanded for next year, the ministry’s budget will still be only 5% above the peak level of 2015.

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