Aljazeera
by Adam Goodman
For the last decade Victoria Alvarez Flores worked 10 hours a day, six days a week, 51 weeks a year at a Mexico City laundromat. Her round-trip commute from a town just outside the city added another four and a half hours to an already long day. The pay was modest, the benefits nonexistent, but at least she had a job. That is, until the owner sold the business.
On Oct. 27 the laundromat closed, marking Alvarez's first day of unemployment. It was her 54th birthday.
Alvarez’s situation is not uncommon. In the past year Mexican President Enrique Peña Nieto — along with much of the international media — has emphasized the growth of the Mexican middle class and portrayed the country as an economic success story, an Aztec Tiger. The reality, however, is quite different.
“The Mexican economy is going through a recession right now,” said Gerardo Esquivel, a professor at the Center for Economic Studies at the Colegio de Mexico in Mexico City. “The numbers that have been mentioned in terms of the growth of the middle class have been grossly exaggerated. There is not a clear definition of what middle class is.” Read more.
The MexicoBlog of the CIP Americas Program monitors and analyzes international press on Mexico with a focus on the US-backed War on Drugs in Mexico and the struggle in Mexico to strengthen the rule of law, justice and protection of human rights. Relevant political developments in both countries are also covered.
Showing posts with label economic crisis. Show all posts
Showing posts with label economic crisis. Show all posts
Oct 16, 2012
Remittances are Down and Mexico Feels the Pain
ABC News/Univision: By Quentin Pinoteau
Agustin Fuentes works multiple construction jobs in Ciudad Nezahualcóyotl, a working class suburb east of Mexico City. Until recently, his nephew was studying in a public university in the nearby city of Puebla, thanks to the money sent to Agustin's family by a niece who cleans homes in Chicago.
But as wages get lower in the U.S., and job opportunities dwindle, funds sent from abroad have decreased, and Agustin's nephew can no longer afford to go to university.
"Two years ago my niece was sending my sister about 2,000 pesos ($150) every two weeks. Nowadays, she can only send us 1,200, 1,500 pesos ($95-115)," said Fuentes, whose voice quivered as he recalled the difficulties now faced by his family.
"They tell us that they can only work a few days a week when they used to work all week. My niece lost her job in an American family and now she is making piñatas to survive but it is nothing steady," Fuentes said. Read more.
Agustin Fuentes works multiple construction jobs in Ciudad Nezahualcóyotl, a working class suburb east of Mexico City. Until recently, his nephew was studying in a public university in the nearby city of Puebla, thanks to the money sent to Agustin's family by a niece who cleans homes in Chicago.
But as wages get lower in the U.S., and job opportunities dwindle, funds sent from abroad have decreased, and Agustin's nephew can no longer afford to go to university.
"Two years ago my niece was sending my sister about 2,000 pesos ($150) every two weeks. Nowadays, she can only send us 1,200, 1,500 pesos ($95-115)," said Fuentes, whose voice quivered as he recalled the difficulties now faced by his family.
"They tell us that they can only work a few days a week when they used to work all week. My niece lost her job in an American family and now she is making piñatas to survive but it is nothing steady," Fuentes said. Read more.
Jun 20, 2012
World leaders at G-20 summit in Mexico weigh stimulus vs. austerity in debate to rescue Europe
AP: LOS CABOS, Mexico — With major European economies on the brink of collapse, leaders concluding an annual Group of 20 meeting sought Tuesday to reassure the world that they would find a way to put out the debt-fueled economic wildfire that has threatened banks, wiped out jobs and toppled governments across the continent.
But the presidents and prime ministers gathered in this seaside resort seemed content to delay any major decisions for a while longer, releasing only a general statement that stopped short of committing any nations to greater spending unless conditions worsen and urging fiscal responsibility. Read more.
But the presidents and prime ministers gathered in this seaside resort seemed content to delay any major decisions for a while longer, releasing only a general statement that stopped short of committing any nations to greater spending unless conditions worsen and urging fiscal responsibility. Read more.
Jun 19, 2012
Calderón asks G-20 to extend vision beyond borders
La Jornada: Americas Program Original Translation
What one nation currently does affects and impacts the rest, said the Mexican president, who called for a long-term agreement to prevent future crises from occurring.
Jose Antonio Roman.
"We can aspire," he added, "to build a consensus to increase the International Monetary Fund (IMF) response capability, strengthen financial regulation, consolidate forces for regulation and supervision, and also expand banking services to a greater number of people in the world.
He stressed the need to make agreements that design and implement long-term and truly comprehensive measures for the recovery of the economy and the creation of justice.
Calderón said that this meeting was not intended to ignore the current situation in Europe.
“We trust in all of you and your great ability to make agreements and to make a stronger united and integrated Europe. The world must know that the towns and governments of this continent are building the new Europe of the new century.”
What one nation currently does affects and impacts the rest, said the Mexican president, who called for a long-term agreement to prevent future crises from occurring.
Jose Antonio Roman.
Los Cabos, BCS. Upon the opening of the first plenary session of the G-20 Summit, President Felipe Calderón called on all present leaders to look beyond the borders of their countries, to reach agreements and to look out for the good of humanity.
Calderón stressed that in the world we live in today what one country does affects and impacts the rest. He insisted that not only should one solve current problems, but also reach truly comprehensive and well-monitored long-term agreements in order to prevent new crises.
Before the leaders of the G-20, the Mexican president acknowledged that the world faces a "grave economic crisis", which requires them to make a major effort to restore economic stability and create the jobs demanded by citizens in each of their nations.
In his close to 12 minute speech, Calderón emphasized that the leaders gathered there that day had an enormous responsibility and that the world’s eyes were upon them. “We represent,” he said, “more than 80 percent of world trade and, if you include all of the European Union, we represent 90 percent of the world’s Gross Domestic Product (GDP), in addition to two-thirds of the world’s population.”
Calderón said the solution to the current economic crisis requires strengthening the international financial institutions to prevent future crises.
Calderón stressed that in the world we live in today what one country does affects and impacts the rest. He insisted that not only should one solve current problems, but also reach truly comprehensive and well-monitored long-term agreements in order to prevent new crises.
Before the leaders of the G-20, the Mexican president acknowledged that the world faces a "grave economic crisis", which requires them to make a major effort to restore economic stability and create the jobs demanded by citizens in each of their nations.
In his close to 12 minute speech, Calderón emphasized that the leaders gathered there that day had an enormous responsibility and that the world’s eyes were upon them. “We represent,” he said, “more than 80 percent of world trade and, if you include all of the European Union, we represent 90 percent of the world’s Gross Domestic Product (GDP), in addition to two-thirds of the world’s population.”
Calderón said the solution to the current economic crisis requires strengthening the international financial institutions to prevent future crises.
"We can aspire," he added, "to build a consensus to increase the International Monetary Fund (IMF) response capability, strengthen financial regulation, consolidate forces for regulation and supervision, and also expand banking services to a greater number of people in the world.
He stressed the need to make agreements that design and implement long-term and truly comprehensive measures for the recovery of the economy and the creation of justice.
Calderón said that this meeting was not intended to ignore the current situation in Europe.
“We trust in all of you and your great ability to make agreements and to make a stronger united and integrated Europe. The world must know that the towns and governments of this continent are building the new Europe of the new century.”
Nevertheless, President Calderón asked the attendees to adopt specific measures to strengthen institutions, not only on this occasion, but for the long-term.
See Spanish Original.
Translation by Sarah Brady, Americas Program
See Spanish Original.
Translation by Sarah Brady, Americas Program
Dec 15, 2008
Coping with Crisis, Latin America Seeks New Paths
As the U.S. economy tumbles into greater depths of disaster and ignominy—dragging the rest of the world with it—countries in Latin America have decided it’s time to strike out on their own.
At a Nov. 26 meeting in Caracas, barely mentioned in the U.S. press, the nations that make up Alba (the Bolivarian Alternative for the Americas) agreed to form a regional monetary zone. The idea is to immediately create a new accounting unit to be called the “sucre” (standing for Unitary System of Regional Compensation and also the name of a historical figure) and move toward adopting it as the legal tender. The financial ministers of the six Alba countries (Bolivia, Honduras, Nicaragua, the Dominican Republic, Venezuela, Cuba, with Ecuador) subsequently met to begin the technical studies required to carry out the measure.
Venezuela’s finance minister, Ali Rodríguez, stated to the press, “When there’s a crisis that has among its factors the weakness of the dollar—profoundly affected by extremely high levels of speculation—that means that other regions must seek their own solutions, and that’s what is happening.”
While proposals from Venezuela to reduce U.S. influence in the region are nothing new, the other countries at the meeting showed equal enthusiasm for paths that would enable them to escape the shadow of the now not-so-mighty dollar.
Honduran economic minister Pedro Paez affirmed “At a time when the international financial crisis creates a horizon of compression of traditional markets, we are creating new markets to guarantee the adequate flow of resources and defend employment in our countries.”
Rafael Correa, president of Ecuador which is an “observer” to Alba, excoriated the dollar system. “Imperialism of the XXI century is no longer boots, no longer planes, no longer aircraft carriers, ships, or cannons. It’s called ‘dollars’, that’s how they seek to dominate us, and we’ve had enough of these pressures.” Ecuador switched to the dollar in 2000 (last time I was there you bought your sancochos with Sacajawea dollars, which solves the mystery of whatever happened to the second failed attempt to circulate a woman’s image on U.S. currency).
Other proposals to come out of the meeting include decreasing reliance on the International Monetary Fund and other U.S.-dominated international finance institutions (IFIs). The Group of 20 wealthy nations and President Bush have urged using these to bail out developing economies hard-hit by the same policies they promote.
“We’re not going to wait here with our arms crossed for the World Bank or the International Monetary Fund to come and solve the problems that this great threat unleashed on the world,” Chavez said at the Alba summit in Caracas. Although Chavez stopped short of calling for withdrawal from the IMF, both the IMF and the Inter-American Development Bank came under fire for placing political conditions on loans that limit countries’ political options in dealing with the impact of the crisis.
Chavez also criticized the Andean Development Corporation, a regional bank made up of governments and private banks, for operating along the same lines. Chavez proposed strengthening the role of the Bank of the South, and pledged $500 million of Venezuelan funds to establish a regional “common monetary fund” for the region and asked other countries to commit portions of their reserves to back up economies in crisis.
Correa slammed “certain international bureaucracies” in reference to the IFIs and their legal apparatus. He was quoted in the Ecuadorean newspaper El Telegrafo saying, “As usual, they are accomplices to the lenders and exploiters of our country, but they will find a new Latin America, one full of dignity, that will know how to respond in case they try to blackmail us.” Ecuador recently completed an audit of its foreign debt that shows that a large part of the debt was contracted illegally and under unfair terms. At the Alba meeting he got the support of the other six nations to face down the global financial system regarding payment of the illegitimate debt.
It’s true that experience shows that real results in building Latin American regional integration fall far short of the pronouncements. But the recent flurry of diplomatic activity—to be followed up by more meetings and a summit on Dec. 17 in Brazil—has an unprecedented urgency now: the result of not acting could be chaos.
The World Bank’s “optimistic” estimate is for about 2% average growth in the region, while other estimates predict a slight contraction. This compares to an average 5% growth a year over the past five years. In countries where so many people live on the edge, a few points uptick in inflation or a couple of percentage points drop in GDP affects survival. This isn’t a game of statistics.
The macroeconomic statistics, gloomy as they are, don’t even show the worst of it. In the most unequal region of the world, some will suffer more than others—and some will make money off disaster hand-over-fist. Although a few major companies are taking mega-losses, it’s the poor who feel the pain. In Mexico, the average real wage fell again, as inflation ate up the tiny nominal rise. Currency devaluation has pummeled consumers reliant on U.S. imports, and over a quarter of a million jobs were lost in the third quarter. Central American countries are suffering a drop in remittances from family members working in the United States, strangling the many small businesses and family economies that depend on that money. Inter-American Development Bank analyst Santiago Levy says employment will come to a standstill in the region in 2009, announcing plans to divert $6 billion of Bank funds to address the crisis.
The international financial institutions are salivating at the prospect of lending massive amounts of money to rescue Latin American countries and restore indebtedness in the region. Many countries, sick of the neoliberal conditions placed on loans, have turned their backs on the IFIs in recent years and their portfolios were seriously dwindling. Crisis means new clients—unless the Alba plan and others like it take off.
No-one knows how far this declaration of independence from U.S. financial hegemony will ultimately reach. Or even what “independence” looks like, beyond cutting ties to the dollar system. The Alba group promotes a trade model called the Trade Agreement of the Peoples as an alternative to U.S. Free Trade Agreements. While the Central American members have the Central American Free Trade Agreement (CAFTA) with the United States, the other members have refused to sign FTAs.
The prospect of a unified Latin America that could finally stand up, not only to the U.S., but to the global financial system is not on the near horizon.
Once again, though, a refreshing wind from the south has blown the dust off the conventional “wisdom” of the system. For people in the United States who want to see the crisis open up real avenues for change, building alliances to help our southern neighbors build alternatives makes a lot of sense.
Related Americas Program Articles:
At a Nov. 26 meeting in Caracas, barely mentioned in the U.S. press, the nations that make up Alba (the Bolivarian Alternative for the Americas) agreed to form a regional monetary zone. The idea is to immediately create a new accounting unit to be called the “sucre” (standing for Unitary System of Regional Compensation and also the name of a historical figure) and move toward adopting it as the legal tender. The financial ministers of the six Alba countries (Bolivia, Honduras, Nicaragua, the Dominican Republic, Venezuela, Cuba, with Ecuador) subsequently met to begin the technical studies required to carry out the measure.
Venezuela’s finance minister, Ali Rodríguez, stated to the press, “When there’s a crisis that has among its factors the weakness of the dollar—profoundly affected by extremely high levels of speculation—that means that other regions must seek their own solutions, and that’s what is happening.”
While proposals from Venezuela to reduce U.S. influence in the region are nothing new, the other countries at the meeting showed equal enthusiasm for paths that would enable them to escape the shadow of the now not-so-mighty dollar.
Honduran economic minister Pedro Paez affirmed “At a time when the international financial crisis creates a horizon of compression of traditional markets, we are creating new markets to guarantee the adequate flow of resources and defend employment in our countries.”
Rafael Correa, president of Ecuador which is an “observer” to Alba, excoriated the dollar system. “Imperialism of the XXI century is no longer boots, no longer planes, no longer aircraft carriers, ships, or cannons. It’s called ‘dollars’, that’s how they seek to dominate us, and we’ve had enough of these pressures.” Ecuador switched to the dollar in 2000 (last time I was there you bought your sancochos with Sacajawea dollars, which solves the mystery of whatever happened to the second failed attempt to circulate a woman’s image on U.S. currency).
Other proposals to come out of the meeting include decreasing reliance on the International Monetary Fund and other U.S.-dominated international finance institutions (IFIs). The Group of 20 wealthy nations and President Bush have urged using these to bail out developing economies hard-hit by the same policies they promote.
“We’re not going to wait here with our arms crossed for the World Bank or the International Monetary Fund to come and solve the problems that this great threat unleashed on the world,” Chavez said at the Alba summit in Caracas. Although Chavez stopped short of calling for withdrawal from the IMF, both the IMF and the Inter-American Development Bank came under fire for placing political conditions on loans that limit countries’ political options in dealing with the impact of the crisis.
Chavez also criticized the Andean Development Corporation, a regional bank made up of governments and private banks, for operating along the same lines. Chavez proposed strengthening the role of the Bank of the South, and pledged $500 million of Venezuelan funds to establish a regional “common monetary fund” for the region and asked other countries to commit portions of their reserves to back up economies in crisis.
Correa slammed “certain international bureaucracies” in reference to the IFIs and their legal apparatus. He was quoted in the Ecuadorean newspaper El Telegrafo saying, “As usual, they are accomplices to the lenders and exploiters of our country, but they will find a new Latin America, one full of dignity, that will know how to respond in case they try to blackmail us.” Ecuador recently completed an audit of its foreign debt that shows that a large part of the debt was contracted illegally and under unfair terms. At the Alba meeting he got the support of the other six nations to face down the global financial system regarding payment of the illegitimate debt.
It’s true that experience shows that real results in building Latin American regional integration fall far short of the pronouncements. But the recent flurry of diplomatic activity—to be followed up by more meetings and a summit on Dec. 17 in Brazil—has an unprecedented urgency now: the result of not acting could be chaos.
The World Bank’s “optimistic” estimate is for about 2% average growth in the region, while other estimates predict a slight contraction. This compares to an average 5% growth a year over the past five years. In countries where so many people live on the edge, a few points uptick in inflation or a couple of percentage points drop in GDP affects survival. This isn’t a game of statistics.
The macroeconomic statistics, gloomy as they are, don’t even show the worst of it. In the most unequal region of the world, some will suffer more than others—and some will make money off disaster hand-over-fist. Although a few major companies are taking mega-losses, it’s the poor who feel the pain. In Mexico, the average real wage fell again, as inflation ate up the tiny nominal rise. Currency devaluation has pummeled consumers reliant on U.S. imports, and over a quarter of a million jobs were lost in the third quarter. Central American countries are suffering a drop in remittances from family members working in the United States, strangling the many small businesses and family economies that depend on that money. Inter-American Development Bank analyst Santiago Levy says employment will come to a standstill in the region in 2009, announcing plans to divert $6 billion of Bank funds to address the crisis.
The international financial institutions are salivating at the prospect of lending massive amounts of money to rescue Latin American countries and restore indebtedness in the region. Many countries, sick of the neoliberal conditions placed on loans, have turned their backs on the IFIs in recent years and their portfolios were seriously dwindling. Crisis means new clients—unless the Alba plan and others like it take off.
No-one knows how far this declaration of independence from U.S. financial hegemony will ultimately reach. Or even what “independence” looks like, beyond cutting ties to the dollar system. The Alba group promotes a trade model called the Trade Agreement of the Peoples as an alternative to U.S. Free Trade Agreements. While the Central American members have the Central American Free Trade Agreement (CAFTA) with the United States, the other members have refused to sign FTAs.
The prospect of a unified Latin America that could finally stand up, not only to the U.S., but to the global financial system is not on the near horizon.
Once again, though, a refreshing wind from the south has blown the dust off the conventional “wisdom” of the system. For people in the United States who want to see the crisis open up real avenues for change, building alliances to help our southern neighbors build alternatives makes a lot of sense.
Related Americas Program Articles:
G7 Plus G20 Equals the Rocky Road to Recovery?
http://americas.irc-online.org/am/5732The WTO and Other Trade Tales
http://americas.irc-online.org/am/5714
Subscribe to:
Posts (Atom)