The Mexican economy has recovered somewhat from a scorching recession imported from America, but is still hobbled by domestic monopolies and cartels
Aug 27th 2011 | SALTILLO
HOT and high in the Sierra Madre, the city of Saltillo is a long way from Wall Street. Stuffed goats keep an eye on customers in the high-street vaquera, or cowboy outfitter, where workers from the local car factories blow their pesos on snakeskin boots and $100 Stetsons. Pinstriped suits and silk ties are outnumbered by checked shirts and silver belt-buckles; pickups are prized over Porsches.
The financial crisis of 2008 began on the trading floors of Manhattan, but the biggest tremors were felt in the desert south of the Rio Grande. Mexico suffered the steepest recession of any country in the Americas, bar a couple of Caribbean tiddlers. Its economy shrank by 6.1% in 2009 (see chart 1). Between the third quarter of 2008 and the second quarter of 2009, 700,000 jobs were lost, 260,000 of them in manufacturing. The slump was deepest in the prosperous north: worst hit was the border state of Coahuila. Saltillo, its capital, had grown rich exporting to America. The state’s output fell by 12.3% in 2009 as orders dried up.
FOR more than a year, giant billboards around Managua have been urging voters to re-elect Daniel Ortega, who is poised to win a third, unconstitutional presidential term in November. The posters portray the former guerrilla, who helped to overthrow the Somoza dictatorship in 1979 and still leads the Sandinista National Liberation Front (FSLN), as a socialist. Yet in a smart hotel in the capital, Mr Ortega’s ministers were busy this month wooing the fat cats of the capitalist world. Incentives to invest in the socialist republic included lengthy exemptions from taxes.
STROLL around any Mexican city for a while and you will notice a background hum like a swarm of angry bees. The ubiquitous buzz is the sound of the Italika motorbike, a jazzily coloured, modestly priced machine that has grabbed two-thirds of Mexico’s bike market since its launch six years ago. More than 1m have been sold.
TWO of Latin America’s three biggest economies, Brazil and Argentina, are headed by women (see article and article). Might Mexico make it a clean feminist sweep next year? The ruling National Action Party (PAN) has been struggling to find a popular candidate for the presidential election in 2012 (the constitution bars the president, Felipe Calderón, from seeking a second term). The opposition has mocked the PAN’s hopefuls as the “seven dwarves”. The American ambassador privately described them as “grey”. (He was withdrawn soon after the offending cable was leaked.) But polls suggest that Josefina Vázquez Mota, the PAN’s leader in the Chamber of Deputies, is emerging as a possible technicolour candidate.
FROM our office in Mexico City I cover the seven countries of Central America, which means a lot of flying. Though it’s a tiny region (smaller than Texas), getting around it takes a long time and is hideously expensive, thanks to a severe shortage of flights. I’m writing this blog during a stopover on the way to Managua, the capital of Nicaragua, to which there are no direct flights from Mexico City. The return trip, roughly the equivalent of London to Lisbon in distance terms, has cost $750.
SANDRA TORRES, who divorced the president of Guatemala in order to be eligible for a presidential run in next month’s election, has been ruled out of the contest once and for all. One of Latin America’s weirdest political sagas finally came to an end when the Constitutional Court ruled on Monday that her marriage to Álvaro Colom, the current president, made her candidacy unconstitutional.