Twin Crises

Twin Crises in Mexico
By Sofia Treviño

Mexico has no shortage of crises, and as a developing economy closely linked to the US economy, felt the warning symptoms of the current economic crises before the onset. But what was unexpected, and has dealt a double blow to the Mexican economy, was the outbreak of the H1N1 virus, what the media has called the “Mexican” swine flu. The flu outbreak and the accompanying news and images that started appearing in the media – including fearful Mexicans in facemasks – has had far-reaching economic effects. Tourism in Mexico represents 8.7 percent of its GDP with over one million people formally employed¹, and an unknown number of people, informally employed, in this sector. The global warnings associated with the H1N1 flu outbreak in April have resulted in dire economic effects for both formal and informal workers in the tourism sector. Oaxaca, in particular, contributes 16.2 percent of Mexico’s GDP² in tourism and many informal workers depend on selling their art, products and services to foreign tourists.

Impact on Informal Workers in Oaxaca

In March 2009, shortly before the flu outbreak, the WIEGO network, organized the fourth in a series of Exposure Dialogues with activists from the Self-Employed Women’s Association (SEWA) in India and economists at Cornell University in Oaxaca, Mexico. The local hosts for the exposure visits, with whom members of the Dialogue team spent two days and two nights working alongside them, included a baker, a brick-maker, firework makers, pottery-makers, tin artisans, and weavers. What follows is a summary account, based on phone interviews, of the impact of the twin crises on the local hosts in Oaxaca as well as an informal taxi driver who provided transport during the exposures.

“When the crisis started my earnings were reduced to up to 40%, but with the influenza they were lowered to an 80% or up to a 90%” (Orlando, tapestry weaver from Teotilán)

Foreign tourism has declined and the main cause was fear of the H1N1 flu, but as the world faces a global economic crises the hope of having the streets of Oaxaca crowded with people from around the world will take longer than anyone might have expected. In addition, the developed economies face their own economic hardships, and many immigrants who sent remittances to Mexico have stopped sending money as they have been facing the realities of unemployment abroad:

“Oh yes, my mother goes to the mill every day and listens how other women complain about how their sons cannot send money from the North anymore. They have asked their sons to come back, but they don’t want to. They all are suffering. If before they sent, let’s say, $100 pesos per month, now they don’t send anything.” (Orlando, tapestry weaver from Teotilán)

The host families from the EDP group in Oaxaca have expressed the effects of the crises, some of them relying on hunting, harvesting or bartering their products for survival. These are some measures taken by these informal workers who do not rely on government for support and have little (if any) assistance from other organizations working directly with the poor – who are also struggling for funds:

“You would think there would be an Emergency Plan from the Government, but it seems to consist of cutting budgets and reducing social spending.” (Bárbara Chávez, Consejo Democrático)

“Oh, even less from the government. Quite the opposite, the government affected us [negatively]. For instance, people who have cars, the government forced them to get new license plates or else they would take away their cars. That is not help. That happened in the months of May, June and even still in July.” (Orlando, tapestry weaver from Teotilán)

The general feedback from our interviews is that of hope. Informal workers continue to seek methods that will improve their sales. All people interviewed are clearly investing in their trades through better designs, more models, different shapes, new methods of production, better quality, more services, lowering of prices and more hours of work so they can “catch-up” in lost gains and be able to provide their families food and school supplies. Most vendors are currently producing more, selling less, storing for the future and living life by the day facing the general uncertainties of informality within a climate of a global economic downturn.

Nevertheless, the general feeling of endurance continues to be their driving force, as Orlando, the tapestry weaver states: “At the end we are calm, we are together as a family.”

Coping Strategies of Informal Workers in Oaxaca

Orlando, Zapoteco weaver:
“I make better quality products, so they get sold. I made them more colourful so they can get some attention and they get sold, I made them prettier, and with better designs, more elaborate. Since I now sell less, I have more time to make prettier rugs, of better quality and more colourful. If I were selling the same amount I was selling before, my rugs would be simpler.”

Aida, tin artisan
“We have made more tin models, with the hope of having good sales.”

Amado, pottery-maker
“We make a greater variety of pottery items and we will sell glazed pottery.”

Antonio, taxi driver
“Now, for the same route, from the airport to downtown, we charge 100 pesos (USD 7.7), people are more careful with their money and look around for prices to find the cheapest fare.”

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¹ INEGI, 2006
² INEGI, 2006

 

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