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  • Mexico's President Andres Manuel Lopez Obrador gestures during a meeting with industry bosses and members of his cabinet to discuss the new administration's policy on the minimum wage at National Palace in Mexico City

    Mexico's President Andres Manuel Lopez Obrador gestures during a meeting with industry bosses and members of his cabinet to discuss the new administration's policy on the minimum wage at National Palace in Mexico City | Photo: Reuters

Published 24 December 2018

President Lopez Obrador's budget swiftly passed through both houses as he plans an 'economic zone' and 'modernized' transportation through Oaxaca.

Mexico’s Congress approved the nation’s 2019 budget early Monday morning barely a week after President Andres Manuel Lopez Obrador (AMLO) introduced the spending plan.

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The final package will allocate 5.8 trillion pesos (about US$291.5 billion) to the government next year and allows the newly-inaugurated head of state to follow through with his campaign promise to increase social spending while forcing many high-paid public servants to accept pay cuts, including himself.

The final budget increased by nearly 24 billion pesos since Lopez Obrador first presented it on Dec. 15 saying he wanted to find more money for universities.

The president's National Regeneration Movement (MORENA) coalition commands a comfortable majority in both the Senate and House.

Over US$402.4 million is earmarked for the Development Plan for the Isthmus of Tehuantepec that AMLO says will increase “interoceanic transportation options” for Mexico. During a Monday speech in the southern state of Oaxaca that the isthmus will run through, the president said that within two years the region will enjoy improved highway, rail and airport systems between Atlantic Ocean ports in Veracruz with those along Oaxaca’s Pacific Ocean.

The government also wants to ‘modernize’ digital communication along the corridor.

The Isthmus of Tehuantepec and Oaxaca are home to some of the country’s largest Indigenous populations. It is also the narrowest part of the country between the two oceans.

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AMLO said Monday that Tehuantepec is being designated a Special Economic Zone and will have a 50 percent lower sales tax rate than the rest of the country. He stressed that all investment in the area will be national, "not open calls for any foreign companies," adding: “There will be fiscal support so that there is investment and work" in the region.

The president promised that no development projects will be carried out without prior consultation of Indigenous peoples in the area and that any new infrastructure cannot “cause ecological damage."

Mayan Indigenous groups in the Yucatan region have criticized the president for moving forward with the construction of his extensive Mayan Train set to be built throughout the peninsula but which doesn't have sufficient informed consent or environmental impact studies.

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