Foreign Policy Blogs

Political Economy of H1N1

Mexico is writhing from H1N1 two weeks after “swine flu” entered the global lexicon.  At least 64 people are dead there as a result of the virus, over 2,600 have been made ill, and the economy is crippled. Mexico’s stock market and currency were initially pummeled from already depressed levels.  Mexico City was closed down for five days, costing the city some $88 million per day, according to Mayor Marcelo Ebrard. As businesses and schools re-open the direct costs to Mexico’s economy eclipse $2.2 billion, according to one AP report.  The Bank of Mexico has predicted that the economy could contract by as much as 6.8% this year, and the bout with H1N1 could precipitate a further drop of 0.3-0.5% of GDP, calculates Mexico’s finance minister Agustin Carstens.

The long-term effects are equally worrying.  Alma Guillermoprieto discusses many corrosive trends in her “Postcard from Mexico” in this week’s New Yorker. Tourism, Mexico’s third-largest source of revenue, accounting for 8% of GDP, is hobbled just as the traditional busy season begins. The Economist notes that hotel occupancy rates are in the single digits.  Bad as this may seem, ignorance could easily make matters worse.  Refusals by local governments to acknowledge and combat the epidemic could easily produce lingering doubts that stymie tourism beyond this season. For instance, Guillermoprieto cites the state of Quintana Roo, which officially claims zero confirmed cases of the illness, even though its resort hub of Cancun has hosted several tourists who later tested positive for H1N1.   

Other nations’ responses to the flu strain have run the gamut from cool and cooperative to zany and xenophobic.  President Obama handled the virus’ spread to the US in his typically smooth demeanor. The Chinese government overreacted by quarantining at least 71 Mexican citizens living there, even though they had no symptoms and were at no particular risk for having the virus.  (The Chinese government was also the first to offer financial assistance, totaling $5 million, to Mexico.) The Egyptian government plans to cull some 250,000 pigs over the next few months, a measure decried by both the EU and WHO and explained by The Economist as a maneuver of political convenience in an article entitled “What a waste”.  Amidst more serious hysterics, the response of the Afghan government is inanely noteworthy; as reported by Reuters the lone pig in Afghanistan was quarantined last week, isolated from its exhibit mates at the Kabul zoo. 

Fear of the virus, which scientists actually regard as a Euro-Asiatic genome, has also frayed Mexico’s relations with many of its Latin American neighbors.  Two Mexican soccer teams were forced to withdraw from the Copa Libertadores, Latin America’s equivalent of Europe’s Champions League, after their scheduled opponents from Brazil and Uruguay refused to play in Mexico.  Cuba was the first nation to impose an outright travel ban to Mexico, with Argentina shortly following suit.  In South America, nerves are heightened by the calendar—fall weather is approaching, and with it the onset of flu season.   All this, not to mention the gravity of Mexico’s other problems, bodes ill for a nation whose prosperity relies heavily on the movement of goods and people across its borders. 

 

Author

Sean Goforth

Sean H. Goforth is a graduate of the University of North Carolina-Chapel Hill and the School of Foreign Service at Georgetown University. His research focuses on Latin American political economy and international trade. Sean is the author of Axis of Unity: Venezuela, Iran & the Threat to America.