MXPE Weekly Essentials

The State becomes a key business player, investment’s double-stall, Mexico’s accidental unfair trade practices, and other highlights in Mexican politics, policy, and markets from the past week.

The policy of providing wood burning stoves to a million Mexico’s poorest rural families has horrified idealists across the country. Even if the point is to provide safer and cleaner kit, wouldn't it just be better to get rid of the practice entirely?

More distrustful critics might cry vanity, pointing out that the programme suspiciously reads exactly like president Claudia Sheinbaum’s university research prior to entering politics full time. What academic wouldn’t dream of putting their doctoral thesis into practice with the full backing of the State?

In truth, the policy is a disappointingly mundane admission of reality:

Mexico, where 30% of household energy consumption is still obtained via wood-burning, does not seem to have a clear path to eliminating the practice. A million safer stoves are the next best option. This is the logic behind the government's rollout of thousands of branches of cash-centric Banks of Wellbeing across the remotest parts of the country, while fintechs in Mexico City preach the gospel of digital payments.

But beyond just making do, the ruling Morena party governments of the past six years have identified a powerful gap in the economy. It believes that, in a country as unequal as Mexico, the market will always fail those at the bottom. Produce for and profit from these abandoned demographics, and not only might the government benefit in the polls from happy voters, it might see the rise of the State as a new, powerful player on the economic scene.