Like they’ve done in every other country in the world, people in Mexico are bracing for the impact of the Coronavirus. They’re not even close to the top of the proverbial curve as the spread of infection started later than that in the U.S., but they’re already feeling the effects.
The fragile Mexican economy
Unfortunately, the news is not good from an economic standpoint, in large part due to Mexico’s symbiotic relationship with the United States. More than three quarters of goods exported by Mexico are sent to the United States. With the U.S. economy likely heading toward a recession, the slowdown in exports will cause major damage to the Mexican economy. There are also a large number of citizens who live in Mexico and cross the border each morning to go to their jobs in hospitality, construction, and other U.S. industries that are experiencing a drop in business.
Additionally, Mexico counts on global tourism to support their economy. Approximately 10% of the Mexican GDP comes from tourism, but with cruise ships and airlines all but shut down, the infusion of money that normally comes from tourism is expected to dry up. Another 18% of the GDP comes from petroleum sales, and crude oil prices have fallen precipitously as the fear or a pandemic-driven global recession grows.
The human impact
As of April 10th, Mexican officials claim to have approximately 3,500 confirmed cases of coronavirus among the population, with nearly 200 of those resulting in a loss of life. The limited availability of testing, however, calls into question the accuracy of these numbers.
Not unlike the American federal government, the Mexican authorities have not responded in a coordinated way, such as country-wide shelter in place orders. Each city and state has been left to manage the situation locally. Their president, Andres Manuel Lopez Obrador, has downplayed the severity of the virus and the pandemic itself, which in turn has prompted people to be less likely to take the early steps necessary to curtail the spread of COVID-19. And sadly, the Mexican healthcare system is in no way prepared for the type of growth in infection rates that have occurred in other parts of the world.
Where does that leave Mexico?
As a poor country, Mexico will probably be impacted more severely than wealthier ones, partially due to the fact that they can’t afford to prop up the economy with government stimulus packages. On the other hand, Mexico has an opportunity to become a bigger player in the supply line for items like medical devices and electronics that are traditionally imported from China into the U.S. The hope is that if they can step up production and distribution at a time when specific resources are scarce, they can boost their sagging economy now and long after the pandemic has passed.