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Pain Of Global Downturn Persists In Mexico

By Jason Beaubien

Published November 5, 2009 12:30 AM

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As the U.S. appears to be pulling out of recession, Mexico's economy is shrinking at its fastest pace since the Great Depression. The effects of the downturn are being felt across the nation, in all sectors of society and in most industries.

A visit to a sprawling market in Mexico City that city officials claim is the largest in Latin America illustrates how the economic crisis is affecting vendors and shoppers.

The Central de Abasto is a huge market near the Mexico City airport. It covers more than 750 acres, making it about eight times bigger than the Mall of America outside Minneapolis.

The complex is primarily a wholesale food and flower market, but housewives and street vendors are also more than welcome to shop.

The market's stalls offer everything from plastic plates to dish soap. There are walls of orange marigolds, pyramids of squash and bales of cilantro. Fat, shiny peppers are piled next to immaculately clean white onions. One section is devoted solely to carrots.

Petra Flores de la Cruz sells celery, broccoli and lettuce from a long wooden table. She says her situation in the economic crisis is dismal.

"Before, I used to sell 300 boxes of celery a day," she says. "Now, I move about 50 or 40 boxes. There's been a lot of change — a lot."

An herb vendor nearby says he started breaking up the thick bunches of parsley and cilantro into halves and quarters to make them more affordable. He says he never had to do that in the past.

And shoppers also say they're buying only the basics.

Lugging a canvas bag stuffed with vegetables, 67-year-old shopper Candelaria Gonzalez says she is no longer buying fish or beef.

"The price of beef has gone up to 80 pesos [$6] a kilo, and the minimum wage is only 50 pesos a day. Imagine," she says. "All you can get for the minimum wage is beans and tortillas."

The Mexican minimum wage is 55 pesos, or slightly more than $4 a day.

In a country where nearly half the population already lived below the poverty line, the global economic downturn has slashed all of Mexico's largest sources of revenue. Oil profits are in a free fall. Automotive exports declined 40 percent this year. Swine flu and Mexico's warring drug cartels have battered tourism. And cash sent home from Mexicans working in the United States is dropping at an unprecedented pace.

Alejandro Villagomez is a professor of macroeconomics at the Tecnologico de Monterrey, one of the country's top private universities. He predicts that Mexico's economy will contract 7 to 8 percent in 2009.

Villagomez says Mexico has suffered in this global crisis because of its heavy dependence on exports to the U.S. He says the slowdown has been felt nationwide, and the fallout will be, too.

"One of the main problems will be the increase in poverty. That is a very important problem for the government," Villagomez says.

Back at the Central de Abasto market, porters push huge piles of goods through the narrow alleyways on hand trucks that they call diablos, or devils. Musicians wander amid the produce trying to raise a few pesos.

In the seafood section, fish, shrimp and squid from both of Mexico's coasts lie on beds of ice.

Men wielding cleavers chop up octopuses on large wooden blocks.

Huge stainless steel trays filled with fish surround Noel Vasquez Lozano. He says sales have been going down for roughly two years now.

Vasquez says the merchants keep waiting for the next week, the next month for things to get better. But things remain the same — sales are weak.

Vasquez says the worst part is that there is no end in sight. And many economists agree with him, saying it will take Mexico several years to recover from this downturn.

View Transcript

RENEE MONTAGNE, host:

We're going to hear now about the recession in Mexico. Even as the U.S. economy is looking up, Mexico's is shrinking fast. NPR's Jason Beaubien begins his report at a market in Mexico City that's billed as the largest market in Latin America.

JASON BEAUBIEN: The Central de Abasto is a huge sprawling market near the Mexico City airport. It covers more than 750 acres, making it about eight times bigger than the Mall of America outside Minneapolis. Everything from plastic plates to rope to dish soap is for sale in different stalls around the Central.

The complex, however, is primarily a wholesale food and flour market where housewives and street vendors are also more than welcome to shop. There are walls of orange marigolds, pyramids of squash, bales of cilantro. Fat, shiny peppers are piled next to immaculately clean white onions. There's one section devoted entirely to carrots.

Ms. PETRA FLORES DE LA CRUZ (Vendor): (Spanish spoken)

BEAUBIEN: Petra Flores de la Cruz sells celery, broccoli and lettuce from a long wooden table. She says the situation with the economic crisis right now is really bad.

Ms. FLORES DE LA CRUZ: (Spanish spoken)

BEAUBIEN: Before, I used to sell 300 boxes of celery a day, she says. Now I move about 50 or 40 boxes. There's been a lot of change, a lot.

An herb vendor nearby says he started breaking up the thick bunches of parsley and cilantro into halves and quarters to make them more affordable. He says he never used to have to do that. And shoppers also say they're buying only the basics.

Ms. CANDELARIA GONZALEZ (Shopper): (Spanish spoken)

BEAUBIEN: I'm no longer buying fish or steak, says 67-year-old Candelaria Gonzalez. She's lugging a canvas bag stuffed with vegetables.

Ms. GONZALEZ: (Spanish spoken)

BWAUBIEN: The price of beef has gone up to 80 pesos a kilo, and the minimum wage is only 50 pesos a day. Imagine, she says. All you can get for the minimum wage is beans and tortillas.

The Mexican minimum wage is actually 55 pesos, or just over $4 a day.

In a country where nearly half the population already live below the poverty line, the global economic downturn has slashed all of Mexico's largest sources of revenue. Oil profits are in a freefall. Automotive exports dropped 40 percent this year. Tourism got battered by swine flu and the vicious drug war. And cash sent home from Mexicans working in the States is going down at an unprecedented pace.

Alejandro Villagomez is a professor of macroeconomics at the Tecnologico de Monterrey, one of the country's top private universities. He predicts Mexico's economy will contract seven to eight percent in 2009.

Mr. ALEJANDRO VILLAGOMEZ (Tecnologico de Monterrey): Basically we have one of the worst recessions in the last 40 years.

BEAUBIEN: Villagomez says Mexico has suffered in this global crisis because of its heavy dependence on exports to the United States. He says the slowdown has been felt nationwide, and the fallout will be too.

Mr. VILLAGOMEZ: One of the main problems will be the increase in poverty. That is a very important problem for the government.

(Soundbite of market)

BEAUBIEN: Back at the Central de Abasto, porters push huge piles of goods through the narrow alleyways on hand trucks that they call diablos, or devils. Musicians wander amidst the produce trying to raise a few pesos.

In the seafood section, fish, shrimp and squid from both of Mexico's coasts are laid out on beds of ice. Men wielding cleavers chop up octopuses on large wooden blocks.

Mr. NOEL VASQUEZ LOZANO (Vendor): (Spanish spoken)

BEAUBIEN: Noel Vasquez Lozano is surrounded by huge stainless steel trays filled with fish. He says sales have been going down for roughly two years now.

Mr. LOZANO: (Spanish spoken)

BEAUBIEN: Vasquez says they keep waiting for the next week, the next month, for things to get better, but it's always just the same � sales are really weak.

Vasquez says the worst part is there's no end in sight. And many economists agree with him, saying it will take Mexico several years to recover from this downturn.

Jason Beaubien, NPR News, Mexico City. Transcript provided by NPR, Copyright National Public Radio.

Source: NPR

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