Abstract

GASCA ZAMORA, José. Sectorial and regional differences of the economic recession caused by the COVID-19 pandemic in Mexico and public policy measures to face it. Invest. Geog [online]. 2021, n.105, e60391.  Epub Nov 01, 2021. ISSN 2448-7279.  https://doi.org/10.14350/rig.60391.

Based on the extraordinary provisions implemented in Mexico by the federal government to reduce the spread of infections caused by the COVID-19 pandemic, productive activities considered non-essential were interrupted, leading to the contraction of the economy. Several agencies have estimated the magnitude of this recessive trend through aggregated indicators at national level; however, little is known about how this process affected inner areas of the country.

Spatial areas at subnational scale, such as regions, states, or municipalities, showed differential effects because their productive structures and other internal and external factors regulated the degree to which economic sectors were affected. To alleviate the adversity caused by this situation, state governments took various actions. The differential behavior of economic recession in states and the scope of government actions are indicators of vulnerability levels and institutional responsiveness of the territorial areas studied.

This work has a dual objective: on the one hand, estimate the differential performance of the economic activity recorded by states in Mexico over the period of highest social lockdown and restrictions imposed on business operations during the pandemic. The aim is to measure the relative losses of Gross Domestic Product (GDP) of productive sectors and explain the causes of economic and regional recessive behavior. Second, it analyzes the actions taken by state governments to mitigate the effects of economic inactivity, especially those related to the temporary closure of businesses and job losses, and the impact on vulnerable social groups.

A methodological technique was used to estimate the sectoral losses of GDP at state level by determining the extent of the impact to economic activities deemed “nonessential” and considering the period of greatest restriction on business operations during the second quarter of 2020.

To assess public policies issued to face the critical period, we identified economic actions implemented by the 32 state governments as recorded by the National Commission for Regulatory Improvement for the period analyzed. After arranging them according to modality in each case, specific actions were analyzed, allowing to illustrate the nature of supports and their scope by identifying the economic segments and social sectors addressed.

The results of this work reveal that the poor performance of productive sectors at state level was not only associated with the suspension of non-essential activities; factors such as specialized productive structures, activities involving a large proportion of on-site work or on-site consumption of goods and services, as well as integration into global value chains, were also key to explaining this recessive behavior. In this regard, our results are consistent with similar analyses reported from studies conducted in other countries that used similar and other measurement approaches.

The drop in sectoral GDP in the Mexican states was consistent with the productive profile of the units analyzed; in other cases, the economic recession was distributed according to regional patterns. States with tourism as a major economic activity, such as Quintana Roo and Baja California Sur, showed the greatest drop in GDP. Also highly affected were states hosting businesses linked to international value chains, such as the automotive and electronics industries, a phenomenon that occurred mainly in the central western and northern regions of the country. The states that were worst at facing the recession were those dedicated to primary and industrial food production. This condition was observed in Sinaloa and Colima, while Chiapas and Oaxaca stood out in the southern region of the country.

Actions taken by state governments focused on micro and small companies, the unemployed, and the most vulnerable persons. Although the importance of institutional transfers and incentives to face the economic emergency is not discredited, these initiatives had a buffering rather than reactivating effect. This is explained by the targeting of the actions taken, the financial constraints of the states, and the temporary nature of the supports. The economic fragility of most state economies and the extent of government actions to face the recession revealed the need for risk-prevention strategies to effectively address pandemic events.

Keywords : COVID-19; pandemic; economic recession; economic crisis.

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