Categories
Health Policy

The Horsemen of the Apocalypse in Mexico

Mortality by Health Condition Among Population Tested for COVID-19 in Mexico

Morbid population includes individuals with hypertension, obesity, diabetes, smoking, asthma, cardiovascular disease, kidney failure and/or immunosuppression. Circle size proportional to state population. Color intensity increases with population share suffering morbidities. Data up to August 11th.

As Dr. Guillermo Torre Amione—the cardiologist who heads TecSalud—has pointed out, Mexico’s government has published detailed data on over one million individuals tested for COVID-19.

The dataset, which includes each individual’s age and sex along with geographic and morbidity information is of interest since it provides input for an analysis of public health in Mexico.

The most striking statistics among the tested population are:

  • the high prevalence of preexisting morbidity (40% are reported as having hypertension, obesity, diabetes, smoking, asthma, cardiovascular disease, kidney failure and/or immunosuppression) and
  • the significantly higher death rate among those with preexisting morbidities than those free of them (11.0% vs 3.0%)

The toll exacted by multimorbidity associated with malnutrition in Mexico was too high to ignore even before the COVID-19 pandemic. The OECD, for example, has estimated that obesity diminishes average life expectancy in the country by 4.2 years and reduces Mexico’s GDP by 5.3%.

2020 has brought most Mexicans to the realization that, after decades of neglect and mismangement, urgent and significant changes are needed in the public health policy, regulatory and enforcement arenas.

Categories
Health Policy

Disease and Death in Nuevo León, Mexico

Morbidity and Mortality Among Population Tested for COVID-19 in Nuevo León

Data up to August 5th

The state of Nuevo León in Northeastern Mexico has a population currently estimated to be 5.6 million. The metropolitan area of Monterrey, where the state capital is located, houses 4.7 million residents and is the country’s third largest city.

Dr. Simón Barquera and other health and nutrition researchers in Mexico have long warned that public health in the country was deteriorating rapidly and would some day become a national security threat. No other place in the Mexico illustrates public health failure best than Monterrey, which is where Manuel Uribe—the world’s heaviest person (560 kg)—made his home until his death in 2014 at age 48.

With a population rid with comorbidities it is no surprise that COVID-19 is taking a heavy death toll in Mexico. The numbers published by federal health authorities for Nuevo León are dramatic. 36% of those tested for COVID-19 have at least one preexisting condition (hypertension, obesity, diabetes, smoking, asthma, cardiovascular disease, kidney failure and/or immunosuppression) and their death rate is 5 times that of individuals without comorbidities (7.1% vs 1.4%).

It is therefore very concerning that the Rio Grande Valley in Texas, just 137 miles away from Monterrey, has become the hottest of all COVID-19 hot spots in North America.

This week 2,750 tons of ammonium nitrate blew up the port of Beirut killing at least 157 in city which houses 2.2 million residents. The agricultural fertilizer had been unsafely stored in a warehouse at the port since 2013 when a ship in transit to Mozambique was abandoned and its cargo seized by Lebanese authorities. The unheeded public safety risk posed by having tons of fertilizer in close proximity to a warehouse storing fireworks has belatedly led to the arrest of 16 port officials.

Will the public health risk posed by rampant comorbidities in Monterrey, Nuevo León and Mexico together with a COVID-19 disaster in South Texas lead to a humanitarian catastrophe south of the border?

Will those responsible for decades of bad health policy in Mexico and terrible social outcomes (i.e.: blindness, kidney failures, heart attacks, strokes and lower limb amputations caused by diabetes) ever be called to account?

Categories
COVID-19

The Rio Grande Valley of Death

Daily COVID-19 Deaths per Million Residents as of July 24th

Seven-day trailing average by number of days since 3 average daily deaths first recorded (date of such occurrence in parenthesis)

The highest COVID-19 daily mortality rate yet recorded in a US metropolitan area is 61.7 deaths per million residents (New York City on April 20). Notwithstanding this, by July 24 the lethality of COVID-19 in the Big Apple had been brought down to 1.2 deaths per million New Yorkers.

Coincidentally enough, COVID-19 lethality also reached its peak on April 20 in New Orleans (31.7 deaths per million) and the city similarly managed to bring the pandemic under control to a level of 1.8 in the most recent statistic.

As it stands today, however, it is South Texas where COVID-19 is deadliest and the pandemic out of control. Out of 67 US metropolitan areas analyzed, it is the Rio Grande Valley (RGV), Laredo and Corpus Christi — all in the state of Texas — that rank at the top of the list in lethality (30.9, 18.1 and 15.5 deaths per million residents).

What does this situation portend for northeastern Mexico?

Categories
COVID-19

The Neighbors are Dying like Flies

Daily COVID-19 Deaths per Million Residents

Seven-day trailing average

The two southernmost counties in Texas, Hidalgo and Cameron, are home to a population of 1.3 million. Both counties are defined as MSAs by the OMB under the names of McAllen-Edinburgh-Mission (Hidalgo County) and Brownsville-Harlingen (Cameron County).

Population in the area is 90% Hispanic and has close family and business ties to Mexican cities across the border such as Reynosa and Matamoros that house 1.4 million individuals.

Out of Texas’ 254 counties, poverty rates in Hidalgo and Cameron rank among the highest (29.3% vs. a statewide rate of 14.9%) and the region is a COVID-19 disaster.

What is happening on the northern bank of the Rio Grande does not bode well for the city of Monterrey (population 4.7 million), which is only 137 miles away and actively linked to the border for logistical and health service reasons.

Categories
Business

Business School Pablum

Wordcount in EGADE’s Decalogue for the Economic & Business Refounding of Mexico

Yesterday the EGADE Business School, which touts its ranking as the top business school in Latin America, published 10 commandments for the “economic and business refounding of Mexico” (Decálogo para la Refundación Económico-Empresarial de México).

The document is striking because in its analysis and prescription it completely avoids mentioning tax and competition policy.

The Mexican economy has been a pathetic failure for decades in terms of creating more and better paying jobs. It has been, however, very successful in creating a robber baron billionaire class that has immiserated tens of millions of the country’s citizens.

In reaching this tragic state of affairs in Mexico’s economy there are two key points of State failure: free-reining anti-competitve behavior on the part of large business interests and a tax system so favorable to capital that one would think it was designed to rival that of offshore tax havens and not to serve 130 million citizens in an OECD member country.

It is quite sad to see a university — an institution that should prize critical thinking and debate in the community — become devoted to training economic bureaucrats and apologists of a profoundly unjust social order.

Categories
COVID-19

Neutron Bomb over Cancún

Cancún Airport (CUN) Traffic

On October 21, 2005, hurricane Wilma first made landfall on Mexico’s shores striking the island of Cozumel. The hurricane exited the Yucatán Peninsula into the Gulf of Mexico on October 23 and a day later struck Florida.

Wilma is the most intense hurricane ever recorded in the Atlantic Ocean and — causing damages to the tune of 1,752 million USD — became the most expensive insured event in the history of Latin America.

During the 4th quarter of 2005 CUN handled 1.2 million passengers, the lowest number in over two decades. This record has now been broken during the 2nd quarter of 2020 with the airport serving only 288 thousand passengers.

In addition to resulting in tens of thousands of deaths in Mexico, the COVID-19 pandemic has brought severe economic hardship to the door of millions who depend on international tourism for a livelihood and unfortunately there is no measure of demand stimulus available that can help the industry and region on the scale it needs.

Categories
COVID-19

Crisis in Paradise (II)

Employees Insured by IMSS

IMSS (Instituto Mexicano del Seguro Social) is a government entity that provides health insurance and social security benefits to private-sector employees in Mexico. Line thickness is proportional to the region’s population

The tourism sector in Mexico is being very hard hit by the COVID-19 pandemic and economic hardship to the population serving visitors of international resort destinations like Cancún, Los Cabos and Puerto Vallarta will be greater in scale and longer-lasting than that experienced in any other industry-dependent region over the past two decades.

Private-sector employment registered by IMSS in the states of Quintana Roo and Baja California Sur — which had for decades outperformed in terms of job creation — slumped almost 20% in the month of May after a 97% YoY plunge in commercial airport traffic in CUN and SJD with no respite in sight.

For reference, formal employment in the states of Baja California and Chihuahua — where the export-led manufacturing hubs of Tijuana and Cd. Juárez are located — shrunk by almost 12% YoY in June 2009. This development was a byproduct of the financial crisis that momentarily brought the manufacturing sector in North America to its knees. In the motor vehicle industry, for instance, production in Mexico fell by 48% from June 2008 to 2009 but twelve months later, in 2010, unit output had rebounded to an all-time historical high for the month of June.

In the region comprised by Campeche and Tabasco — where crude oil production represented 66% of GDP in 2017 — IMSS-registered employment fell slightly more than 12% YoY in July 2016. The driver behind this drop was draconian budget cuts to Mexico’s national oil company, PEMEX, as crude oil export prices fell from a level of 96 USD/barrel in July 2014 to an average of 39 in July 2016 and then proceeded to recoup ground reaching 66 USD/barrel in July 2018.

Categories
Business

Moral Eunuchs in the Corporation and Beyond

The following is excerpted from Moral Mazes: Bureaucracy and Managerial Work, an article authored by Robert Jackall and published in the September-October 1983 issue of the Harvard Business Review.

“The hallmarks of the emerging modern production and distribution systems were administrative hierarchies, standardized work procedures, regularized timetables, uniform policies, and centralized control—in a word, the bureaucratization of the economy.

This great transformation produced the decline of the old middle class of entrepreneurs, free professionals, independent farmers, and small independent businessmen—the traditional carriers of the old Protestant Ethic—and the ascendance of a new middle class of salaried employees whose chief common characteristic was and is their dependence on the big organization.

The bureaucratic ethic contrasts sharply with the original Protestant Ethic. The Protestant Ethic was the ideology of a self-confident and independent propertied social class. It was an ideology that extolled the virtues of accumulating wealth in a society organized around property and that accepted the stewardship responsibilities entailed by property. It was an ideology where a person’s word was his bond and where the integrity of the handshake was seen as crucial to the maintenance of good business relationships. Perhaps most important, it was connected to a predictable economy of salvation—that is, hard work will lead to success, which is a sign of one’s election by God—a notion also containing its own theodicy to explain the misery of those who do not make it in this world.

By analyzing the kind of ethic bureaucracy produces in managers, one can begin to understand how bureaucracy shapes morality in our society as a whole.

Except at blame time, managers do not publicly criticize or disagree with one another or with company policy. The sanction against such criticism or disagreement is so strong that it constitutes, in managers’ views, a suppression of professional debate. The sanction seems to be rooted principally in their acute sense of organizational contingency; the person one criticizes or argues with today could be one’s boss tomorrow.

As it happens, the guidance they receive from each other is profoundly ambiguous because what matters in the bureaucratic world is not what a person is but how closely his many personae mesh with the organizational ideal; not his willingness to stand by his actions but his agility in avoiding blame; not what he believes or says but how well he has mastered the ideologies that serve his corporation; not what he stands for but whom he stands with in the labyrinths of his organization.

Such adeptness at inconsistency, without moral uneasiness, is essential for executive success.

In this way, because moral choices are inextricably tied to personal fates, bureaucracy erodes internal and even external standards of morality, not only in matters of individual success and failure but also in all the issues that managers face in their daily work. Bureaucracy makes its own internal rules and social context the principal moral gauges for action.”

Categories
Fiscal Policy

Mexico: Taxing Labor to Subsidize Property

Tax Revenue

Comparing Mexico’s tax revenue statistics with those from Chile, the only other OECD member in Latin America, reveals the regressive nature of the country’s fiscal policy. Consider for instance, that taxes on immovable property (impuesto predial) in Mexico tallied 20 USD/capita in 2017 vs Chile’s 103 USD/capita and that the South American nation has no payroll tax.

Payroll taxes, by definition, do not confer entitlement to social benefits and are used to finance general government expenditure and investment.

In Mexico, payroll taxes (Impuesto Sobre Nómina or ISN) are calculated as a percentage of payroll, rather than being a fixed amount per employee, and are approved and collected by legislative and executive branches at the state level.

In 2006, 35 years after first being introduced in the State of Mexico, the totality of Mexican states had adopted an ISN. By the turn of the century, they were the largest source of revenue for this level of government and state finances have become even more dependent on the ISN after the wrongheaded decision in 2007 to go ahead with reductions in the motor vehicle ownership tax (tenencia).

Categories
COVID-19

La Peste

Quarantine and COVID-19 Mortality

COVID-19 Daily Deaths are reported as a 7-day trailing average

With COVID-19 deaths on the rise and fears that the worst is yet to come, Mexico is lifting the lockdown it initiated almost three months ago. The true toll of the pandemic in the country is likely to be higher due to underreported deaths.

Mexico’s approach to tackling COVID-19 has not prioritized testing, which for the 7-day period ending June 10th averaged 0.05 individuals tested per day per thousand inhabitants vs. 0.27 in South Korea. The country is also far behind in developing and deploying contact tracing capabilities, a key tool in South Korea’s successful fight against the pandemic and a pillar of New York City’s plan to safely lift stay-at-home orders.

Is Mexico’s COVID-19 strategy too reliant on good luck and divine intervention?