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López Obrador announces a plan against inflation in Latin America

2023-03-02T20:17:30.564Z


The president of Mexico speaks by phone with Lula da Silva of Brazil, Gustavo Petro of Colombia, Alberto Fernández of Argentina and Miguel Díaz-Canel of Cuba to eliminate tariffs and facilitate trade


The president of Mexico, Andrés Manuel López Obrador, shows a graph with the levels of inflation in different countries and regions.Galo Cañas Rodríguez

Andrés Manuel López Obrador wants to lead a common front against inflation in Latin America.

This was announced by the President of Mexico this Thursday, one day after holding telephone conversations with Luiz Inácio

Lula

da Silva from Brazil, Gustavo Petro from Colombia, Alberto Fernández from Argentina and Miguel Díaz-Canel from Cuba.

The objective is to promote commercial exchanges and eliminate tariffs to combat shortages and reduce the prices of key goods in the countries of the region.

"We are going to carry out an anti-inflation plan of mutual aid for growth, for economic and commercial exchange," the president announced in his morning press conference.

The message was given along economic lines, but it has a strong political and diplomatic component.

Mexico wants to show the muscle of its continental leadership, supported by its main allies and the new Government of Brazil, the largest economic giant in Latin America.

López Obrador's announcement came as he puffed out his management of the economy.

The Mexican peso has been gaining ground for several weeks against the US currency and has broken a new record, trading on Wednesday at 18.08 units per dollar, its best mark since 2018. Inflation, however, remains one of the the main challenges in the country, touching 8% in the first months of this year.

The increase in the price level stood at 7.76% in the first half of February, according to official data, a slight respite compared to those seen in the first quarter of 2023. "We are going to look for exchanges in exports and imports of food

and other goods with the purpose of facing the high cost of life jointly”, said the president without giving further details.

Three hours after concluding his press conference, López Obrador uploaded a video on his social networks in which he talks with his counterparts from Brazil, Colombia, Argentina and Cuba.

"We agree to meet by videoconference to face inflation and help each other," he reads in the publication.

Mexico's president spent a good part of Wednesday hammering out the new plan.

"We agreed with Lula why we didn't hold a kind of virtual meeting that would be on April 5 at ten in the morning Mexico time to exchange points of view, unite, help each other and face the inflation problem," said López Obrador. to one of your interlocutors.

The spokesman for the Brazilian Presidency has confirmed that the Mexican president raised the matter (a regional anti-inflation plan) with the Brazilian president in the conversation that the two held on Wednesday afternoon.

And he added that he has commissioned his economic area ministers to be in contact with their Mexican counterparts to analyze the details of the initiative.

Lula shared a brief message on social networks in which she stated that she had spoken with López Obrador about economic cooperation and the possibility of her visiting Mexico, "which we will do as soon as possible."

The invitation was reciprocal: López Obrador was also invited to travel to Brazil.

The Mexican government has opted to give a second life to regional mechanisms, such as the Community of Latin American and Caribbean States (Celac) and the Pacific Alliance, to face challenges such as the outbreak of the pandemic and the economic crisis, but also to make a common alliance in the political arena.

The great absentee had been Brazil.

First, because of the government of the far-right Jair Bolsonaro, who left Celac in 2020. Then, because of the tense political scene in the South American country and the threats of a coup against Lula, who took protest on January 1.

Other episodes such as the so-called self-coup by Pedro Castillo in Peru forced a pause.

Lula announced hours later that Brazil was going to return to regional groups that had been relegated by Bolsonaro.

“We are going to work to strengthen Latin America, Celac and Unasur [the Union of South American Nations],” the Brazilian president wrote.

“We are going to think about what we can do to unite more with our neighboring countries and what makes us together,” he added.

López Obrador wants Gabriel Boric in Chile and Luis Arce in Bolivia to join the initiative.

The Mexican president said that he asked Alberto Fernández to contact them, as well as their ministers of Foreign Affairs, Economy and Trade.

The president also assured that he is going to look for the president of Honduras, Xiomara Castro.

All those involved, despite their most obvious nuances and differences, are nominally left-wing governments.

Only these countries have been mentioned and the absences cover the entire ideological spectrum: from the president of Peru, Dina Boluarte, and Guillermo Lasso in Ecuador to Nicolás Maduro in Venezuela or the Nicaraguan Daniel Ortega.

As a result of the political crisis in Peru, Boluarte and López Obrador have had several clashes and have flirted with breaking off diplomatic relations.

Castillo's family is in exile in Mexico, while the judicial process against the former president in the Andean country progresses.

The blow to the pockets of Latin Americans has also had repercussions in the political arena.

Inflation closed 2022 with 5.79% in Brazil and interest rates are at 13.75%, a level that has provoked bitter complaints from Lula and a harsh attack on the president of the Central Bank.

The forecast of the International Monetary Fund (IMF) is that inflation in Latin America will close this year at 7.1%, the agency published last October.

Argentina ranked fourth in the world, with inflation close to 95% in 2022, while Colombia suffered the highest price increase in the last two decades, overcoming the 11% barrier, the IMF reported.

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Source: elparis

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