La Semana: Sunday, June 19
The week in economic news and eco-tourism
Welcome to the Sunday edition of The Mexpatriate. In today’s newsletter:
Economic Outlook for Mexico: Clear or Cloudy?
Fireflies and the Paradoxes of Eco-Tourism
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Economic Outlook for Mexico: Clear or Cloudy?
The global economy has had a long week: inflation continues to be brisk, supply chains are still faltering and the U.S. Federal Reserve interest rate hike of 0.75% has sparked renewed chatter about recession. The economic headlines in Mexico have been mixed:
“Loss in economic momentum is coming…except in the US and Mexico, according to OECD”
“Unemployment in Mexico is at its lowest level in two years”
“Of 20 economic sectors, only 4 have recovered”
“And now it’s the OECD: predicted growth for Mexico is lowered to 1.9% in 2022”
Some tout the “strong peso” and low unemployment statistics while others shake their heads about slow GDP growth and the fallout from inflation, leaving us to wonder which outlook is more accurate: clear or cloudy? The truth is probably that both are right…or both are wrong. Forecasting in economic systems—as in weather systems—can be a delicate art.
Let’s start with the positive indicators on the horizon for Mexico. The appreciation of the peso against the dollar, while it makes a flashy headline, is “slippery” as described by Manuel Sánchez, a former deputy governor of Mexico’s central bank, Banxico. “It’s a relative term…the peso is strong compared to when? For example, in the beginning of 2020, the peso was around 18.6 to the dollar and now we’re talking about a ‘super’ peso of 19.8 to the dollar because it’s stronger than it was 2 weeks ago.”
It would seem then that this is a blip on the peso’s general declining trajectory in buying power: “I do not expect the peso to appreciate beyond what it is now for two reasons. First, the new cycle of interest rate hikes by the Federal Reserve in the United States will take a bit of the shine off the peso. Second, the Mexican economy will not grow much this year because the government continues to implement a tight, low-spending fiscal policy,” according to Luciano Rostagno, a market analyst interviewed for El País.
Next comes the labor market. The first quarter of 2022 showed unemployment at 3.5%, down from the same period of 2021 (4.4%). As I noted in a February article, Mexico usually has low unemployment numbers since Mexicans of working age cannot afford to be unemployed and the informal economy is so large. The percentage of those in “pobreza laboral” or “working poor”—defined as people who work but do not earn enough to cover basic household expenses—has also dropped marginally from 40.3% to 38.8% in the first quarter of 2022 (it reached 46% in 2020). There is a notable gender gap in this statistic: nationally for every 100 men categorized as working poor, there are 111 women. The same applies for informal labor, which made up 51.1% of non-agricultural workers in the first quarter of 2022 (54.3% of women, 48.7% of men). These low-income families generally rely on remittances or government social programs to meet essential needs. However, Mexico spends the least amount on social programs in the entire OECD (Organization for Economic Co-Operation and Development) which leaves this population vulnerable to a further descent into poverty during economic downturns.
The OECD Composite Leading Indicators (CLI) for June 2022 show an overall loss of momentum for most of the 38 member economies, and the major non-members as well, including China and Brazil. But the U.S. and Mexico both seem to escape the trend, with their indicators pointing towards “stable growth”. The CLI are calculated using various metrics of consumer confidence and economic activity, such as share prices, construction permits, new car registrations, among others, and are meant to serve as a tool for predicting 6-9 month economic cycles. They are most useful when reviewed comparatively over time: “the indicators should be interpreted with care and their magnitude should be regarded as an indication of the strength of the signal rather than as a measure of growth in economic activity.” What does this mean for Mexico? I think it means “we’ll get back to you on that.”
Less optimistic analysis points to different statistics from the OECD, such as the lowered predicted 2022 GDP growth for Mexico from 3.3% to 1.9%. According to a report on economic recovery from IMCO (Instituto Mexicano de la Competitividad), in the first quarter of 2022, GDP was not only lower than it was in early 2020, but is at nearly the same level as it was five years ago. The report highlights how recovery has been unevenly distributed in the economy, and finds that one-third of the economy has recovered and shows growth trends (including manufacturing, wholesale commerce), another third is in process of recovery (including real estate, agriculture) and the remaining third is lagging behind. The sectors still struggling to reach their pre-pandemic levels include construction, mining, financial and educational services, hospitality and restaurants, and cultural and recreational activities.
“The Mexican economy cannot recover with only one of its motors working. As long as anchors are not lifted that slow down domestic sectors, then economic productivity will remain dependent on external sectors, where there are rough waters ahead.”
Fireflies and the Paradoxes of Eco-Tourism
“For a beetle, fireflies live long and full lives—around two years—though most of it is spent underground, gloriously eating and sleeping to their hearts’ content. When we see these beacons flashing their lights, they usually have only one or two weeks left to live. Learning this as a child—I could often be found walking slowly around untrimmed lawns, stalling and not quite ready to go inside for dinner—made me melancholy, even in the face of their brilliance. I couldn’t believe something so full of light would be gone so soon.”
Aimee Nezhukumatathil, World of Wonders
In the cool forests of oak and pine found in the smallest state in Mexico, the inhabitants celebrate the arrival of rain, heralding the season of mushrooms and luciérnagas (fireflies). As many regions of the country endure drought and hope fervently for a wet summer, in Nanacamilpa, Tlaxcala, anticipation is even more heightened for what was once as dazzling as it was commonplace: the nocturnal mating rituals of fireflies.
“It was as if the sky was falling in little pieces: green, yellow and orange stars falling to earth. And their light was the only light we had, there wasn’t any electricity. At times it felt like being in a dream or a fairy tale,” reminisces don Ricardo, an 81 year-old native of Nanacamilpa in an essay published in Gatopardo.
There are at least 2,200 species of fireflies (which are beetles) found on every continent. Mexico has a particularly rich assortment, with 100 different species identified—including 37 new ones recorded just last year. Globally their populations have dropped significantly in recent years and scientists have concluded that while there are many factors, such as warming temperatures, deforestation, and pesticide use, one of the most insidious and devastating is light pollution.
There is a lot of chatter these days about our circadian rhythms and their disruption, how artificial light has impacted our sleep cycles and even our hormonal cycles. But perhaps we are less aware of how the circadian rhythms of the rest of the living world are affected by our technology. Modernity has nearly eradicated both darkness and silence; from the ocean depths to summer nights in the woods, they are ever more elusive. Harder to capture in hashtags than plastic straws or oil spills, endangered darkness is nonetheless a global reality, and one of its humble victims is the firefly. “They communicate using light and they keep trying to send messages to other fireflies, but no one responds, no one receives the signal, and so they die,” explains biologist Tania López-Palafox. Concentrations of artificial light in urban and suburban areas appear to have disrupted their ability to communicate and mate.
“One day the fireflies became very famous and we don’t even know how,” says don Ricardo, explaining the tourism phenomenon of the firefly “sanctuaries” in Tlaxcala. Between 2011 and 2019, summer visitors increased from 4,000 to 127,000. In 2020 the centers were closed and in 2021, the season was menaced by drought. Less rain has meant more forest fires, and faster reproduction of destructive bark beetles that kill trees. The impact of unchecked tourism has also taken a toll. “The Tourism Department only has rules for behavior, hours, how many people a guide can take out, but that is not the same as ‘carrying capacity’. And it also isn’t adhered to because you can bring in as many people as you want,” according to Zazil Ha García, an eco-tourism researcher. In what feels like a melancholy 21st century morality play—in this “age of unintended consequences”—the sparkling natural treasure of Nanacamilpa is slipping away from those who wish to preserve, and profit, from it.
“We were just a group of families trying to protect our right to work,” says Juan José Morales, the president of the “Executive Committee of the Society of Solidarity of Piedra Canteada”, an eco-tourism center on 632 hectares of property privately owned by 40 families. “When we started, the people from the ejido [communal public land] thought we were crazy. Who’s going to come here to see fireflies? That will never work,” notes another member of the collective, Eliseo. There were 64 founding members originally, but some were suspended from the group for poor management practices. The families have restored the forest, which prior to their purchase of the property from the state government, was being exploited for lumber. “When they turned it over to us, the land was completely devastated, nothing had been done according to regulations. We have brought it back.”
The fading fireflies are victims of both hyper-local and global forces, as are their human guardians. This makes finding a “solution” to their plight a tangled prospect. All we do know is that when you pull on one thread in the tapestry of a living ecosystem, you may unravel more than you anticipate. Firefly larvae are predators who may help control other populations of snails, slugs, and other insects as they munch their way through the underworld of the forest. If they vanish, we cannot foresee all the downstream effects. And what if they don’t? We are equally as blind to unexpectedly good future outcomes. There is some evidence already that one of the species of fireflies in Tlaxcala, photinus palaciosi, is adapting to the swelling human presence by changing its courtship schedule to the early morning hours rather than the evening.
Are these bio-luminescent beetles prophets of our future? Will we visit toads, crickets, wasps, spiders and wood lice in “sanctuaries” one day? If we pause to consider the familiar, under our feet or flying past us in the night, maybe we can change their fates and our own. In the words of Robin Wall Kimmerer, “all flourishing is mutual.”