Be neighborly, go to Mexico
There are several goodreasons Americans should help out the Mexican economy with a trip south of theborder.
By Andrés Martinez - Los Angeles Times
June 9, 2009
Your neighbor needs your help. Do you have it within you to lend ahand? Will you book yourself a week on the beach in Cabo or Puerto Vallarta, orexplore Mexico City or one of the colonial cities in the heart of Mexico? Youknow, for the common good.
This has been a banner decade for empathy tourism -- many Americans flocking toNew York after 9/11 and to New Orleans after Hurricane Katrina did so with asense of public service. Mexico now needs a similar surge.
Our neighbor to the south is having an annus horribilis, as a Britishmonarch might say. These were never going to be good times down there, withMexico's economy so intertwined with ours, but growing concern aboutwar-on-drugs violence, the decline in oil prices and the advent of swine fluhas further dented "brand Mexico." Adding insult to injury,Washington earlier barred Mexican trucks from coming into the United States, aflagrant violation of the North American Free Trade Agreement, and, as of lastweek, Americans crossing over to Mexico were required to have a passport toreenter the country, a change expected to deepen the slump in border townsfrequented by Americans.
The tourism sector is the largest employer in Mexico and the third-largestsource of foreign currency for the trillion-dollar economy, after oil exportsand remittances sent home by Mexicans working in the U.S. It is estimated thatthe swine flu alone will cost the country about $5 billion in tourist revenue(and bear in mind that travel to Mexico was already down significantly as aresult of the U.S. recession). Hotel occupancy rates in Cancun in May didn'teven reach the 30% mark. The all-clear has been sounded on the virus, but noone knows for sure how long-lasting the impact on tourism will be. Mexico'sgross domestic product, meanwhile, is expected to contract about 12% in thesecond quarter of this year.
Why should Americans care? Well, for starters, there is the national securityimperative. Say what you will about Mexico, and there is plenty negative to besaid, our southern neighbor has been a fairly reliable, stable and friendlypartner for more than half a century, and it is in our interest to keep it thatway. Our nation's political discourse may not always reflect our goodgeographic fortune, which we take for granted, but the United States is blessedto have Canada and Mexico as neighbors. Is there another developing nation ofmore than 100 million people we'd rather have on our southern flank? Putdifferently, how many other global powers in history have had the luxury of along land border that doesn't need to be protected by a large standing army?
Suddenly this year, thePentagon and many pundits on the right have been raising the specter of apotential "failed state" on our border, the result of the lawlessnessbred by powerful drug cartels. The rhetoric is a bit overheated, thecomparisons to Pakistan misplaced, but the concern about what is happening inMexico, our third-largest trading partner, is laudable. We have a strong nationalinterest in seeing Mexico remain a peaceful, ever-prospering democracy.
The importance of Mexico to the United States is a truth not often voiced, butoccasionally acknowledged by deed. Mexico traditionally ranks somewhere betweenJordan and Argentina on the foreign policy establishment's list of priorities.The amount of resources devoted to cross-border development or mutual securityis pitiful (even in the aftermath of the anti-drug initiative known as theMerida plan), compared with development or military aid distributed elsewhere,not to mention compared with regional development transfers within the Europeansingle market.
But a far more robust commitment to Mexico does assert itself when required, aswe saw during the 1990s, when the Clinton White House, bypassing Congress, madeabout $20 billion in Treasury reserve funds available to Mexico during thatcountry's last financial crisis. And this year too, Mexico is proving itself tobe, not unlike AIG or Citigroup, too large to fail from Washington'sperspective, as the Federal Reserve has made available to Mexico a $30-billioncurrency swap facility, which gives that nation's central bank privilegedaccess to credit from the Fed in order to stabilize the value of the peso.
It would improve the overall health of the relationship, and our ability tothink strategically about Mexico's (and hence regional) development ifpresidents were more transparent about the country's true stake in Mexico(sorry, Jordan), rather than make such commitments on the sly.
The fact that the United States bears some responsibility for Mexico's currentwoes is another reason to invest in our neighbor's stability and prosperity.
Unlike previous financial crises that have roiled Mexico, this one can't bepinned on its macroeconomic sins. If in the mid-1990s it was fashionable totalk about the "tequila effect" to describe the global financialcontagion spreading from emerging markets, this crisis is more like a"Budweiser effect," in that it was Uncle Sam's reckless insistence onliving beyond his means that caused the mess. Washington, irresponsiblyover-leveraged to support an unsustainable standard of living, failed topractice what it preached over the last decade, to abide by the so-called, um,Washington consensus on economic policy.
Mexico, for its part, has enacted prudent fiscal policies, shored up itsforeign reserves and remained a faithful adherent to the free-trade gospel,continuing to open its economy to foreign goods and investment. The nation hasalso become a great deal more democratic in the last decade. Still, despitedoing all the "right" things according to the Washington consensus,Mexico's economy (and currency) has been harder hit by the WallStreet-triggered crisis than the United States'. No one said life was fair.
Americans also share some of the responsibility for the mayhem unleashed by theshowdown between the Mexican state and its rapacious drug cartels, as bothSecretary of State Hillary Rodham Clinton and President Obama were right to pointout in recent months. Drug users in this country are underwriting the war inMexico -- and that war is being waged largely with guns brought in from thiscountry.
The United States is not about to criminalize guns and legalize drugs to helpout Mexico. But you can do your part to help out a good neighbor -- book a tripsouth. Pronto.
Andrés Martinez is asenior fellow at the New America Foundation.