Looking at Latin America

By Hannah Wallace November 30, 2006

First stop: Mexico City (1,184 miles from Sarasota and Bradenton, about the same distance as Chicago). As our local economy begins to sputter, we must look elsewhere for new markets. And what's closer than Mexico?

This market of 106 million people, just across the Gulf, is bound to us by NAFTA, a 13-year-old free trade agreement. Yet it is only Florida's third-largest trade partner. (The more distant Brazil and Venezuela are first and second.) Mexicans enjoy free elections, have a government with the friendliest disposition towards the United States of all the larger Latin nations-and now they've got a shiny, new, conservative, Harvard-educated president-elect slated to be sworn in Dec. 1.

Before you call a trade consultant, though, consider this small hitch: The inauguration of Felipe Calderón is not going to be smooth. Millions of Mexicans are planning to express their outrage over what they believe was another fraudulent election. Our mainstream media are suggesting that this is the fault of the loser, Andrés Manuel López Obrador, a stubborn shopkeeper's son who grew up in the backwaters of Mexico. López Obrador, we are being told, is acting irresponsibly.

But is he?

I'd venture to say every businessperson should be thankful to the man for doing what he is doing, because he is actually a stabilizing factor for the country.

Here's my reasoning: There's more at stake than "just another" contested election. Mexico's far bigger problem is that it's virtually ungovernable because of a generalized feeling that "there's no making it." López Obrador is just channeling the ire of millions who feel locked out.

Before the elections, the big-business groups in Mexico determined that the center-left candidate with a big lead in the polls was incompatible with their interests. So they pushed all their pesos behind the conservative Calderón, portraying López (who actually appears like a chamber of commerce type compared to other Latin American leaders) as a danger to Mexico. The official outcome was a win for the conservative candidate by a fraction of a percentage point. In hindsight, the business groups' decision could be nominated for the Darwin Award of Self-Elimination-at least if you believe that political stability and a populace that believes government at least sometimes represents their interests should be business interest No. 1.

Am I painting too dark a picture? Just consider this: Popular movements continue to paralyze or disrupt local governments and business in southern Chiapas and Oaxaca. In response, right-wing vigilantes are killing protesters and bystanders. In May, street vendors in a small town near Mexico City waged deadly battles with police. The law enforcers, in turn, beat, pillaged, destroyed, imprisoned and raped. A quarter-million miners and steel workers went on wildcat strikes in March, with some dragging on for months. The companies' and state's response: deposing union leaders, shutouts, cops and more cops. Vast areas of Mexico, including big cities, are under the control of the narcos. Street crime is rampant. Even the police advise drivers not to stop at red lights in Mexico City after dark.

It's not that Mexicans tend to be anarchists and criminals-on the contrary. I'd categorize most Mexicans as culturally conservative. I'm used to being teased by my Mexican wife's cousins when I'm washing dishes. But they believe the state does not address their needs. Family is their main social safety net, and so family interests rank way above complying with laws and regulations.

Yet my relatives are among the lucky minority that could be called middle class. To most of Mexico's 60 million poor, the country's new formal democratic structures-letter-of-the-law judges, cleaner elections and political parties-look more like a setup by and for the rich. One example: Judges are now less corrupt than under the old regime, but they tend to interpret the law rigidly, in favor of private property-while only a tiny minority of Mexicans are property owners. During two decades of privatization and free trade, the gap between the rich and the rest of the population has widened. The countryside is an economic disaster zone, partly thanks to NAFTA. The general perception is that there's no legal and clean way up for most citizens and their families.

So it's possible to see López Obrador's struggle as a means to channel the energies of millions of disappointed Mexicans that otherwise could be really destructive. Calderón has heard the outrage from those who told him that he isn't their president. If he is clever-and he has shown indications that he is-he will listen and adapt his policies accordingly.

Still, Mexico is a huge, urban country with a big and growing economy. I believe they will eventually be able to sort out this crisis and, more importantly, tackle some of the underlying problems. Mexico is worth a try. Just don't insist that Harvard-educated conservatives run the country forever.

WHICH BRINGS ME to Caracas, Venezuela (1,540 miles from Sarasota, the same distance as Denver, Colo.). We are being told ad nauseam that President Hugo Chávez is a communist dictator. Despite his recent anti-Bush antics at the United Nations, the facts seem to show he's neither one nor the other. But whatever he is, the country's economy is revving high, and we're already benefiting. Venezuela became Florida's second-largest trading partner in 2005, with Florida exports to Venezuela skyrocketing nearly 40 percent last year. Florida trade officials can't "blame" this on the unprecedented economic and social policies of the populist president.

So they point out that the big oil producer is flush in cash, thanks to sky-high oil prices. True. But the Chávez administration's "communist" policy of allowing large numbers of impoverished citizens to become consumers, and of funneling more oil profits to the state, which in turn makes massive social and infrastructure investments, certainly didn't slow down Venezuela's red-hot second-quarter GDP growth of 9.2 percent.

Venezuelan banks and many businesses are experiencing their best year ever. Maybe even the most dedicated Chávez haters now secretly admit that an administration highly likely to be re-elected with more than 50 percent of the vote isn't so bad for business.

CLOSER TO HOME: Have we converted too many beachfront hotels into condos? According to Statistics Canada, the number of Canadian visitors to Florida dipped 2.6 percent to 900,000 in the first quarter of this year. Meanwhile, Visit Florida reports a small rise of 2 percent-to 934,000-for the same period. Whichever statistic is true, the numbers indicate a slowdown in the post-9-11 foreign-tourism recovery that began in 2003. Our alarm bells should be ringing even louder because the Statistics Canada numbers indicate that during the same quarter 33.9 percent more Canadians-350,000-traveled to Cuba. Maybe our Canadian friends traveling to Havana instead of Holmes Beach are sending a message to slow-selling condo developers: Reconvert to hotels.

Sarasota's Johannes Werner is the editor of Cuba Trade & Investment News and hosts the Florida-Caribe radio show on WSLR 96.5 FM.

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