With presidential elections just around the corner, shopkeeper
Michael Begum is keeping informed. He reads the newspaper. He
watches the nightly news. He's not sure there's a dime's bit of
difference between the two main candidates - neither of whose name
is Bush or Gore.
Mr. Begum's fascination with another country's politics is more
than academic. What happens in Mexico's July 2 elections may have
more immediate economic impact on his high-end dress shop - and
businesses all along the US-Mexico border - than the changing of the
guard in Washington.
Denizens of the 2,000-mile US-Mexico divide are forced to take a
keen interest in the political scene next door: Even though they
can't vote, they have a lot riding on the election. The intertwined
nature of the Southwest is just one example of the globalization of
modern markets, in which no country can remain unaffected by its
Brownsville residents' unease stems from a range of causes, from
countries like Japan threatening to pull its investment dollars if
the elections aren't clean, to recent history: The peso has suffered
a devaluation in each of the past five elections. What a devaluation
would mean for Begum and his fellow residents is fewer Mexicans
coming to town on shopping trips, playing havoc with border
businesses' bottom lines.
"I've seen seven presidential elections, and five peso
devaluations," smiles Begum, a dapper Russian veteran of World War
II, who bears an uncanny resemblance to the author Gore Vidal. "It's
emotional, but I survive it."
But this year's election could be a turning point for Mexico, and
to the US towns that depend on its stability. Mexico's ruling party,
the PRI, could lose its first national election in 71 years.
And the country's international-trade-driven economy is widely
thought to be strong enough to weather any political storm.
Smaller pinch on pocketbooks
That's partly because Mexico's economy - and, by extension, that
of the border - is less tied to the vagaries of politics than in the
past, experts say.
"The economy is a totally different arena than it used to be,"
says Arturo Farias, senior vice president for international trade at
the International Bank of Commerce in Brownsville.
The single biggest driver in this new economy is NAFTA, the North
American Free Trade Agreement, enacted in 1995. Designed to
encourage the flow of goods and services among the US, Mexico, and
Canada, NAFTA has reduced regulations in all three nations and
increased overall trade. Before NAFTA, total trade between United
States and Mexico in 1994 was about $40 billion. Last year, it was
$180 billion. The effect on the border, proponents say, has been
increased jobs on both sides.
In addition, Mexico has been working to lower its debt and reduce
its spending, to please its lenders from the International Monetary
Fund, which gives less room for the sort of mismanagement or
corruption that has weakened Mexico's currency in past elections.
"Overall," says Mr. Farias, "the economy is at a very stable place."
Signs of that stability are everywhere in this border town.
Drive to the Wal-Mart or the Circuit City, just a minute away
from one of Brownsville's three ports of entries, and you'll see
busloads of Mexican shoppers from Monterrey or Tampico crowding the
aisles, checking out the latest fashions or DVD players. …