So Where Does the Money Go that Mexico Borrows?

Answers emerge. Including offshore private accounts.

Mexico’s public debt-to-GDP of 50% may seem modest by today’s inflated standards, but when it comes to debt, everything is relative, especially if you don’t enjoy the benefits that come from having a reserve-currency-denominated printing press, and if you borrow in a foreign currency that you don’t control.

As the debt load grows, more and more of the States’ financial resources must be used to service it. As El Financiero reports, the cost of servicing Mexico’s debt, despite super-low interest rates globally, has almost doubled in the last five years, and is now higher than it has been at any time since 1990. In fact, according to the Government’s own figures, more state funds will be spent this year on servicing the debt than on all public infrastructure projects put together.

Yet as the government scrimps and saves in areas that might actually help to boost economic growth, it’s more than happy to dig deep to fill its own pockets.

A joint investigation by the news website Animal Politico and the NGO Mexicans Against Corruption and Impunity has revealed that, amidst all the budget cuts, the Peña Nieto Government has been using a complex web of shell companies to make hundreds of millions of dollars of public funds, originally intended for public causes such as combating poverty or financing public education, completely vanish.

In other words, much of the money that was meant to alleviate the crippling poverty affecting Mexico is now sitting in offshore private bank accounts

Continue reading the article

3 thoughts on “So Where Does the Money Go that Mexico Borrows?

    1. Could be difficult, Tony, since I don’t speak Vietnamese (though I’m still fairly conservant in French) and beyond what I’ve seen in the movies and read in the occasional novel, I know very little about the country, its history, culture and economy.

      Like

      1. There was a similar massive borrowing of foreign loans using the name of Vietnamese people. But somehow only less than half of the money can be.seen on wasteful projects, the other half may only be seen by investigators with your skill !

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s