Transfers to inefficient public enterprises hurt health and education (economist)

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A restructuring could help remedy Pemex’s ineffectiveness, according to an expert.

As the government spends billions on state-owned enterprises, other priorities suffer

Government transfers to two inefficient state-owned enterprises are a barrier to allocating more resources to sectors such as health and education, according to a budget specialist at the think tank.

Mariana Campos, coordinator of México Evalúa’s public expenditure and accountability program, told a business conference that she was concerned about the government’s allocation of large sums of money to the state-owned oil company. Pemex and the Federal Electricity Commission.

Money allocated to address their “inefficiency” diverts resources from other areas, she said.

“The cost… of investing in businesses that are not efficient is extremely high,” Campos said, adding that the health and education sectors are left with “two miserable pesos” each, despite the challenges facing them. they are faced.

“… Thirty percent of schools have serious infrastructure problems,” she said.

According to an analysis by México Evalúa, investments in Pemex – which has more than $ 100 billion in debt – will total 381 billion pesos ($ 18.4 billion) in 2022, an increase of 20.8% over This year.

Campos said the government’s absorption of Pemex debts was not a bad idea because it could help the state oil company secure lower interest rates for debt repayment. However, helping the company without forcing it to undertake reforms and restructuring is not the right thing to do, she said.

“It’s a business that maybe needs to be less integrated,” Campos said, suggesting its components should be dismantled. “… The structure [of the company] is still very tall… ”

With reports of Reforma


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