The decision to allocate a considerable amount of public works construction to the Army It generates economic, social and political consequences. In addition, the armed institute has become a relevant economic agent in the sector, for which reason it should be subject to the rules of economic competition, businessmen and academics stated.
Francisco Javier Solares Alemán, president of the Mexican Chamber of the Construction Industry (CMIC) stressed that no army in the world is designed to do construction work in civil works.
In addition, the Secretary of National Defense (sedena), does not have the human team necessary to carry out the public works projects that have been assigned to it by the government. Faced with this situation, he said, what he has done is that he is hiring civilians who previously worked with private construction companies: engineers, architects, lawyers, administrators, bricklayers, and laborers, among others. However, it is not known under what conditions.
“We have periodic reviews of our obligations to our workers and to the authority, such as in terms of contributions to Infonavit, the Mexican Institute of Social Security, as well as local taxes generated by hiring personnel,” he stressed.
In turn, the researcher at the Espinosa Yglesias Study Center (CEEY), Enrique Díaz-Infante Chapa, opined that the construction sector has a very positive impact in terms of job creation for popular sectors, which is why it is worrying that it is being affected in this regard, which has a direct impact on mobility social.
Concerns affectation to economic benefits
The researcher highlighted that the construction sector has a significant impact on the economy, not only for the generation of jobs, but also for the use of inputs, which allows the growth of sectors such as steel, cement, bricks, glass, among others.
The fact that the military are also constructors of public works mainly affects micro, small and medium-sized companies, which are the ones that generate the most jobs, he explained.
In addition, it affects the economic spill, there are regional impacts or, at least, there is uncertainty because it is not known if they are resorting to local suppliers.
For his part, Francisco Javier Solares Alemán said that now it is difficult to calculate the economic benefit generated by the construction of public infrastructure and its dispersion.
He considered that the construction of branches of the Wellness Bank It would have benefited many small companies located throughout the national territory, if, instead of entrusting them to the Army, private parties had been hired.
Although it is not possible to calculate the economic benefit that would have represented involving local construction companies in the construction of all these banking facilities throughout the national territory, what is clear is that dispersing the economic benefits of public works is the right thing to do. that best suits the country’s economy and, consequently, the well-being of society, he mentioned.
In addition, he added, savings would have been generated for the transfer of personnel from the center of the country to the communities where the works are carried out.
It is today a relevant economic agent in the sector
For his part, the coordinator of UNAM’s Trade, Economy and Business Analysis Laboratory (LANCEN), José Ignacio Martínez Cortés, considered that, given the commissions it has to carry out civil works, the Army has become an economic agent of weight in public works. In addition, “having this new responsibility also has new temptations.”
In this sense, Enrique Díaz-Infante Chapa considered that, since the Army is now acting as a relevant economic agent in that particular sector, it should be subject to the rules of economic competition and see if it is incurring in market concentrations.
In turn, the retired minister of the Supreme Court of Justice of the Nation (SCJN), José Ramón Cossío, said that it is worrying that in the militarization process that the country is experiencing “a growing number of activities have been granted to the armed forces”.
“When I assign the armed forces a civilian task, what I am doing is not generating a civilian condition in the operation of the armed forces, but rather generating a military operation in the civilian activities that I am assigning to the armed forces,” he mentioned. .
He then pointed out that the trap of the militarization process lies in taking ordinary operations of civilian life and qualifying them in extraordinary conditions of military life, not because of the operation, but because of the person who is carrying out the operation. “Whoever wants to act in bad faith can do it, as is happening in the current government, is to grant all possible operations to the greatest extent possible to the armed forces to give them the character of military operations and, consequently, generate all the possible exceptions on those operations”.
Gross fixed investment in the sector falls
José Ignacio Martínez Cortés drew attention to the fact that gross fixed investment for construction in the country has registered a sharp drop due to the fact that private groups do not participate in the construction of large public works projects and the allocation has been direct the army.
From his perspective, this was evident in the case of the cancellation of the new airport for Mexico City in Texcoco and the construction of the “Felipe Ángeles” in Santa Lucía, built by the military, he indicated.
“Starting in 2019, when the Army begins to build (civil works) is where private investment in construction has an abrupt drop.” “There is still private investment in residential construction, but it does not yield the same profit as private investment in non-residential construction,” he mentioned.
In this regard, Solares Alemán reported that, at the national level, there is a delay in the construction of public infrastructure, as well as in housing. In addition, there is not enough energy infrastructure to meet the demand we have.
He commented that the National Survey of Construction Companies of the Inegi, from last February, with data to December 2022, the construction industry reported an increase of 13% comparing December of last year, with December 2021.
In 2022, compared to 2021, this sector of the economy registered an increase of 5%, which is a good figure, but not enough to recover what it was producing at the end of 2019, that is, before the Covid-19 pandemic. 19, indicated.
He commented that, in the last three years, the CMIC lost around 2,000 construction companies. Before the pandemic there were 11,000 companies now 9,000. He clarified that it is not known if they closed or have only stopped activities, waiting for conditions to improve.
He said that the companies affiliated with the CMIC invoiced in 2021 around 26% less than what they invoiced in 2018. He clarified that this difference is not fully explained by the allocation of public works contracts to the Army.
On the other hand, José Ignacio Martínez Cortés recalled that, before this six-year term, important non-residential public works projects were assigned to large business groups, even not dedicated to construction, but they did have access to contracts with the government and decided to form their own construction companies or ally with some already constituted.
Even, he pointed out, the income they generated was limited, particularly the one that benefited small and medium-sized companies outside of these business groups, precisely because they sought to create their own material supply companies, so that most of the profits They will stay in the same group.
He said now, even with the new way of building public works, through the Army, the large business groups that were previously the main beneficiaries of the sector continue to make profits, for example, the steel and cement companies.
Public works concentrated in the south
In another aspect, Solares Alemán emphasized that the infrastructure construction policy implemented by the government of President Andrés Manuel López Obrador is concentrated in the south-southeast of the country and in large projects.
He indicated that the Congress of the Union approved a federal budget for the construction of infrastructure in 2023 of around 691,000 million pesos. Of that amount, two states, which are Campeche and Tabasco, concentrate 61 percent. The first almost 214,000 million pesos and the second 205,000 million pesos.
The serious thing is that there are entities like Tlaxcala that have 24 million pesos assigned for infrastructure that builds federal instances; Zacatecas, 120; Aguascalientes, 142 and Morelos, 430 million.
In turn, Martínez Cortés commented that in previous six-year terms, public works benefited Nuevo León, Coahuila, Sonora, Chihuahua, Jalisco, and San Luis Potosí, which are entities that had a strong business investment in branches such as the maquiladora industry and transportation services. export.
He said that currently there is a huge difference in the execution, development, allocation and the place in which public works are carried out.
However, he recalled that in the federal Budget for 2023 there are 79 regional projects assigned, via bidding, to private groups. Of these works, 51 are carried out in states where the opposition governs, for example, the Monterrey and Guadalajara metro collective transport systems and hydraulic infrastructure works in Aguascalientes and Chihuahua.
Francisco Javier Solares Alemán said that other consequences of using the Army as a builder of civil works is opacity, especially since now some of the largest projects have been declared matters of national security.
In addition, he said that the government will collect less taxes than it would have obtained if that work was being carried out by individuals.
