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Mexico investment deal will have limited success


 Subject
 Infrastructure aims.
 
 
 Significance
 The government on April 5 announced energy infrastructure investments as part of a post-COVID-19 economic recovery plan. These are believed to be second-phase projects from a previously announced infrastructure investment agreement with the private sector. The agreement aims to boost investment in physical infrastructure by the equivalent of 5% of GDP by facilitating private sector construction projects. The first phase of the agreement, unveiled in November, consists of 147 projects amounting to some 859 billion pesos (37 billion dollars). These are mostly transport, telecommunications and tourism infrastructure works, to be carried out in 2020-24. The second phase involves the energy sector and is believed to consist initially of 137 projects worth between 97 and 100 billion pesos. 
 
 
 Impacts
 If feasibility studies for first-phase projects do not advance soon, investments could fail to materialise. 
 The COVID-19 pandemic will strain government-business relations as AMLO has been criticised for his handling of the situation so far.
 AMLO is unlikely to ease up on his polarising rhetoric when disagreements emerge with business leaders, perpetuating uncertainty.
