IMF in support of AMLO’s strategy against fuel theft

The International Monetary Fund (IMF) expressed support for the Mexican government’s fight against fuel theft, adding that, although Morena ’s policy to eradicate a crime that has drained billions of dollars from state coffers was likely to have a transitory effect on inflation levels, it would render positive results for the country’s public finance in the long haul, specially regarding investor confidence.

“Going against an illegal business such as fuel theft is clearly the right way to go. It is important that the Mexican government should take decisive action by means of force to eradicate corruption and restore the rule of law. In doing so, the government will also have to generate incentives for both public and private investment ,” claimed the director of the organization’s Western Hemisphere, Alejandro Werner .

In an interview, shortly after his participation at the economic prospects seminar organized by former students of Mexico’s Autonomous Institute of Technology (ITAM) , Werner added that the actions taken against fuel theft were relevant from the standpoint of public finance since it had the potential of improving Pemex’s operations.

The director added that it was important to look toward alternative energy sources to rely less on fossil fuels.

“Implementing the right policies for the diversification of the country’s energy matrix is very important,” he stated.

Werner pointed out that world economies shared a responsibility to promote renewable energies, responding to principles of economic cautiousness and reason, as well as environmental sustainability and public health policies in the medium term.

No inflationary risks

The former assistant secretary of the Ministry of Finance stated that the IMF had perceived no inflationary risks related to the fuel shortage.

“We see no inflationary risks for economic activity during the first quarter. Its operationalization will obviously generate problems for several days, but it will not have a negative impact on the economy if it is dealt with on time. On the contrary, the fight against fuel theft will have a very positive impact on both Pemex and Mexico’s public finance as it sends a clear message to strengthen the rule of law ,” he commented.

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