The Economic Slowdown

As a refreshing change of pace from the normal stream of doom and gloom regarding drug policy in Mexico, we are now treated to reports that the economy is suffering ramifications of the international recession. It contracted during the last quarter of 2009 by 1.2 percent, as the Central Bank suffered massive losses and the Peso is being devalued internationally. As international demand for products and industrial work dries up, so does a substantial form of income and jobs. A substantial portion of the economy is based on remittances, cash sent home from foreign nationals, which fall with the world economy. The Central Bank's efforts to adress this decline were ineffective, resulting in a loss of investor confidence and stock falling. Efforts to preserve the Pesos value by selling dollars directly also failed, further rocking faith in government ability to forestall disaster and negatively affecting civil participation. A poor economy leads to cycles of poverty and therefore less political involvement, worse educational standards as production for the family becomes the norm, and increased risk of state failure. However, whether this occurs remains to be seen-the rate at which the economy is slowing remains at about half of analysts predictions, suggesting possibility of averting disaster. 

http://www.forbes.com/feeds/reuters/2009/02/20/2009-02-20T223043Z_01_N20296423_RTRIDST_0_MEXICO-ECONOMY-WRAPUP-1.html

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