Minutes before Mexico City’s biggest pawn shop opened last Wednesday, a long line of people snaked around the corner. Some wore surgical face masks; many leaned against the brick building for support, tired and impatient. But no one dared abandon the line. The shop had been closed for five days as part of a government-mandated public health shutdown, and the city’s massive working-class population was feeling the economic blow.
Mexico’s death toll from swine flu has been adjusted from 149 to 56, and authorities are realizing that the biggest challenge facing the country is not a question of health. With the virus not as lethal as previously thought, the real issue is finding a way to revive a tourism-based economy that, already beleaguered, took a big hit from the flu crisis. That was the second public relations disaster to strike the country. Earlier this year, gruesome drug violence made headlines just in time to quash the country’s reputation as the ideal Spring Break destination. Then swine flu erupted, prompting travel warnings and outright bans around the world. Many financially secure foreign expatriates also vacated the capital, leaving behind millions of blue-collar workers struggling to make ends meet in a sputtering economy.
Maria Rodriguez, a delicate-looking homemaker with blonde-streaked hair and a blue face mask, paced back and forth before the pawn shop opened its doors. She said that despite a slowdown in income from her regular gig making sheets and tablecloths, she had managed to make up for some of the shortfall by making and selling face masks, a profitable venture since several of the city’s pharmacies ran out of them halfway into the flu scare. Nevertheless, Rodriguez was here to ask for an extension on a loan from jewelry she had pawned months ago.
Near the front of the line stood an elderly woman with her two adult sons, Javier and Antonio Olmedo, who manage a cell phone store and a barbershop, respectively. Both men said their businesses had essentially ground to a halt over the crisis period. “We had the stores closed, or we would open for minutes because there were no people,” Javier said. “We had only about 10 percent of normal business.” While they had originally planned to pick up their mother’s bracelets, which they pawned several months ago, they were instead now here to pay more interest for an extension on their loans.
Last week, Mexico’s Finance Secretary Agustin Carstens admitted that the country is in a recession. Carstens said the Gross Domestic Product could contract 4.1 percent, partly due to flu. While the economic loss could have been worse, analysts worry about workers in Mexico City, who suffered the brunt of the shutdown. Countless Mexicans who hold service jobs saw their work and income disappear altogether. And in Mexico’s informal cash-based economy, the benefit of a guaranteed weekly paycheck simply isn’t there for the majority of residents.
Another man in line, a travel agent named Julio Martinez, was suffering the direct consequences of the tourism drain. “There are no sales,” he said. “No one is traveling into Mexico.” He had with him a shopping bag containing family heirlooms soon to be deposited in the hands of the pawn dealer.
Tourism has indeed become nonexistent nationwide, despite the fact that the concentration of swine flu victims has been in Mexico City. Hotel occupancy in top beach resort Cancún has dropped more than 50 percent, while the cruise lines have canceled their Mexican port calls, depriving local economies of some $10 million, according to the tourism ministry. Agents can’t book vacation packages, and international airlines are cutting the number of flights to the country.
Mexico’s tourism ministry has said it will send officials to both Canada and China to study how those countries bounced back after avian flu and SARS. Officials have also announced a $2.1 billion stimulus initiative—including $450 million for hotels, airlines, cruise lines and other tourism-oriented businesses. With tourism the nation's third-largest source of income (after oil and migrant remittances), a solution to the problem of empty beaches and hotels is an urgent government priority.
Even as Mexico reels from the financial effects of the swine flu, the administration of President Felipe Calderón is being lauded for its handling of the crisis. While China tried to hide the outbreak of SARS a decade ago, Mexico publicized the outbreak and swiftly enacted public health restrictions. The United States congratulated Mexico for these decisive measures, and Hong Kong leader Donald Tsang praised Mexicans for submitting to quarantines abroad. It was, Tsang said, a worthwhile “sacrifice” made to prevent the spread of the virus.
Maybe, but for most Mexicans, the sacrificing is just beginning.
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