Mexico take it in the ass

[TotallyOz]

I have been looking for an extended trip to Mexico and trying to come up with an iteniary. It has not been easy. Hotels are pretty cheap right now and the resorts are all offering great rates.

I found this article on CNN and thought it was worth reading.

Mexico's economy taking hits from all directions

(CNN) -- The Mexican economy went off a cliff in the second three months of 2009, with the gross domestic product dropping 10.3 percent from the same period last year, according to government figures.

The GDP for the second quarter also declined 1.1 percent from the first three months of the year, the National Institute of Statistics and Geography said Thursday.

The GDP, which is the market value of all goods and services in a country, is used to measure a nation's economic performance.

Analysts say the main cause of Mexico's nosedive is that the nation's economy is tied strongly to that of the United States, which is mired in the deepest economic downturn since the 1930s.

About 80 percent of Mexican exports go to the United States, said Allyson Benton, an analyst with the Eurasia Group consulting firm.

"If the United States isn't importing, Mexico isn't exporting," Benton said.

Susan Kaufman Purcell, director of the Center for Hemispheric Policy at the University of Miami, said Mexico can take some measures but "until the U.S. economy really starts recovering, Mexico is going to have a hard time moving up."

Other factors dragging the Mexican economy down include a tourism decline caused by the H1N1 flu outbreak and fears over continuing violence, declining oil and tax revenues, and fewer Mexicans abroad sending money back home.

"They're getting a blow from almost every corner," Purcell said.

Oil revenues, long Mexico's main source of money, are being hurt by lower global prices and declining production. Purcell and other analysts point to the rapid decline of the Cantarell oil field, at one time the world's second-largest. Production at Cantarell peaked in 2004 and has been falling by more than 10 percent every year since then.

"Oil production has been in decline since 2004 but it has declined significantly over the past couple of years," Benton said.

Mexico, which relies on oil revenues for roughly 40 percent of its budget, also is hurt by falling prices for crude oil. According to some estimates, Mexico needs oil to be at $70 a barrel to sustain revenue levels. Prices on Friday hovered around $70, but earlier this year they had dipped to close to $30 a barrel.

Remittances from Mexicans working abroad, most of them in the United States, also have fallen victim to the economic downturn. Fewer jobs in the United States means fewer opportunities for Mexicans to find work and send money home. Remittances rank after oil in terms of revenue for the country.

That revenue fell from $26 billion in 2007 to $25 billion in 2008, Mexico's Central Bank said, and is expected to decrease even more this year.

Tourism, Mexico's third-largest source of revenue, has declined steadily since an outbreak of the H1N1 flu was first discovered in Mexico in April.

In addition to a global recession that has affected travel everywhere, tourists had already been wary of going to Mexico because of violence that has seen more than 11,000 people killed since President Felipe Calderon came into office in December 2006.

The Mexican government said earlier this month that the tourism downfall has already cost the nation up to $300 million and some analysts say that figure is sure to climb.

The H1N1 outbreak also caused revenue shortfalls because the government closed bars, restaurants and many other public places at the height of the epidemic this spring.

As a result of all these circumstances, tax revenues have taken a hit.

"The big problem in economic decline in both Quarter 1 and Quarter 2 has been much lower tax revenues," Benton said. "When you are not producing or you are firing people, you don't have taxes."

For example, Purcell said, the taxes that Mexico's state-owned Pemex oil company pays to the government have fallen by up to 40 percent.

Mexican officials see hope on the horizon, however.

"In June of this year, the economy probably stabilized or touched bottom, and ... we'll start to see a recovery in the next quarter," Deputy Finance Minister Alejandro Werner told the Wall Street Journal.

Purcell said Mexico could help itself by adopting labor and tax reforms and modernizing its energy policy. For example, she said, Mexico's labor laws make it difficult to fire unproductive employees and Pemex has not been aggressively pursuing other oil fields to replace Cantarell.

She doesn't see that happening, particularly since Calderon's PAN political party suffered a drubbing in last month's midterm elections and no longer controls Congress.

Mexico's economic problems, she said, are "a combination of bad luck, bad planning and a stalemated political system."

http://edition.cnn.com/2009/WORLD/americas...nomy/index.html

[TampaYankee]

Several years ago I had a mild interest in seeing some of Mexico. No more. I wouldn't venture into Mexico without the 101st Airborne as personal security. The country is corrupt from head to toe. It has been for the last 70 - 80 years or more. The corruption is worse than ever with the drug cartels competing with the other bastion of corruption -- the long time ruling party in Mexico, Institutional Revolutionary Party. The State Dept has a Travel Advisory for US citizens that is probably understated as is, for political considerations.

I appreciate that Calderon is trying very signficantly to fight the drug corruption. I think the US ought to help him and provide as much support as possible -- far more than we are. That does not make Mexico any safer or less corrupt, at the moment anyway. That also doesn't mean that he and his party have abandoned the basic politcal corruption that seems to be the trappings of whichever party is in power.

If you do go please then please exercise care. Kidnapping touristas is a very real problem down there.

[JKane]

I agree with TY, Mexico seems to have slipped from 2nd world to 3rd these last couple years and now finds itself with many of the same crime problems as Columbia and the like. It even seems to be fueled by drugs--just like central America.

It's too bad, with it being so close and the birthplace of Kristian there was a lot to recommend it. But even in TJ I've never seen anything online that implies there is anything special available for us. Catholic repression?

Maybe when Cuba opens up...

[flguy]

I have traveled Mexico fairly extensively over the past 15 years mainly for scuba diving. I was never in love with the place (except maybe La Paz) and always felt they only reason people really went there was because of the price. I always felt safe in the country but I also haven't been there in about 5 years. There are just too many other places I would prefer to explore in the future.

[BiBottomBoy]

Legalize pot and cocaine and you'd both help the mexican economy and stop all the drug war bullshit.

[TotallyOz]

Legalize pot and cocaine and you'd both help the mexican economy and stop all the drug war bullshit.

No doubt in my mind that I think pot should be legalized totally. Cocaine? I think in small quantities that no one should go to jail for it. I hate drugs though but I hate the way the current system works even more.

[BiBottomBoy]

People will both pot and coke no matter what the law is.

During a time where state governments can't afford to pay garbage collectors I'd rather that they get the tax money on both.

[Guest epigonos]

I will admit right up front that I have had a life long love affair with Mexico. In the sixties I spent several months in the Northern Mexican city of Saltillo, living with a family, studying Spanish. Since that time I have returned too many times to count. During the last few years I have spent the first or second week of every November in Acapulco and a week each spring is a different part of the country. During these spring visits I have spent time in San Miguel de Allende, Guanajato, Queretaro, Morelia, Patzcuaro, Chichen Itza, and Tulum. This spring I will travel to Guadalajara and to Puerto Vallarta. Next year I plan to make an extended trip to Mexico City. In ALL the time I have spent recently in Mexico I have NOT once felt threatened or in danger. In any large city, even here is the U.S., there are neighborhood than are dangerous and should be avoided, Mexico in no different. The one caution I would advise is to AVOID the border cities – Tijuana, Ciudad Juarez, etc.

Mexico’s drug problems are caused by the drug and weapons markets here in the United States. If this country didn’t have an insatiable appetite for illicit drugs there would NOT be Mexican cartel to supply them. If American financial institutions did NOT assist drug cartels laundry their money they wouldn’t have the funds to purchase, in this country, a virtually unlimited supply of automatic weapons with which to combat the Mexican army. I am convinced that what the Mexican governments needs to do is cut a deal with the cartels, tell the U.S. government to go fuck itself, and legalize the exportation of drugs to the U.S. The Bush Administration and now the Obama Administration talk, and talk, and talk about stemming the flow of drugs into this country and the flow of weapons into Mexico BUT in the end it is all talk and NO action. Mexico is fucked because this country doesn’t have the desire or will power the address the problems on this side of the border.

Yea I am passionate about this issue!!!!!

[BiBottomBoy]

I agree 100 percent.

I will admit right up front that I have had a life long love affair with Mexico. In the sixties I spent several months in the Northern Mexican city of Saltillo, living with a family, studying Spanish. Since that time I have returned too many times to count. During the last few years I have spent the first or second week of every November in Acapulco and a week each spring is a different part of the country. During these spring visits I have spent time in San Miguel de Allende, Guanajato, Queretaro, Morelia, Patzcuaro, Chichen Itza, and Tulum. This spring I will travel to Guadalajara and to Puerto Vallarta. Next year I plan to make an extended trip to Mexico City. In ALL the time I have spent recently in Mexico I have NOT once felt threatened or in danger. In any large city, even here is the U.S., there are neighborhood than are dangerous and should be avoided, Mexico in no different. The one caution I would advise is to AVOID the border cities – Tijuana, Ciudad Juarez, etc.

Mexico’s drug problems are caused by the drug and weapons markets here in the United States. If this country didn’t have an insatiable appetite for illicit drugs there would NOT be Mexican cartel to supply them. If American financial institutions did NOT assist drug cartels laundry their money they wouldn’t have the funds to purchase, in this country, a virtually unlimited supply of automatic weapons with which to combat the Mexican army. I am convinced that what the Mexican governments needs to do is cut a deal with the cartels, tell the U.S. government to go fuck itself, and legalize the exportation of drugs to the U.S. The Bush Administration and now the Obama Administration talk, and talk, and talk about stemming the flow of drugs into this country and the flow of weapons into Mexico BUT in the end it is all talk and NO action. Mexico is fucked because this country doesn’t have the desire or will power the address the problems on this side of the border.

Yea I am passionate about this issue!!!!!