Monday, January 13, 2020

Flannery's Searching For Modern Mexico

I enjoyed Nathaniel Parish Flannery's Searching for Modern Mexico: Dispatches From the Front Lines of the New Global Economy (2019). The bulk of the book is really about how rural Mexico is doing on the front lines of the global economy. And for the entire book, if you're a small business owner, how can you survive? This means a varying combination of opportunity, dislocation, structural constraints, and violence.

The first chapters look at rural Mexico: coffee in Chiapas, mezcal in Oaxaca, and avocado in Michoacán. Flannery digs deep into the stories of specific people, their businesses, and the regional context, which often includes fear. Not surprisingly, Michoacán is the most extreme, with local gunmen creating a fragile "peace" by force against cartels. But there is also economic uncertainty based on the fact that local entrepreneurs see how the Mexican government has done nothing to help them integrate into the global economy. There is a lot of demand for these products in the U.S., but especially in Chiapas, farmers are scattered and don't know how to get government assistance, either economic or technical.

The Mexican state is absent, more at least mostly so. It's not helping the southern part of the country develop economically and it's not providing anywhere close to adequate security despite claiming to, so informality reigns. Further, corruption becomes the norm.

The avocado chapter reminded me of the Mexico trip I took in 9th grade (in the mid-1980s) that included visiting Uruapan, in Michoacán. Now if you do a news search for Uruapan you get story after story about grisly murders, and U.S. schools are not sending their kids there.

Then he shifts to beer in the larger cities of Guadalajara and Tijuana, a conscious choice to highlight the inequalities that still characterize Mexico. He briefly adds the taco vendors that feed the maquila industry to show the two-tiered nature of the economy. This is where we see that the Mexican state is also failing to facilitate financing, as the major banks are owned by billionaires and are not interested in funding entrepreneurs. Those billionaires also control the market, so that Oxxo convenience stores (which are everywhere) and supermarket chains have exclusive contracts with giant beer companies that shut out local producers. Monopolies strangle the economy.

Flannery shows the challenges all these entrepreneurs face and it would be really interesting to follow up in 5-10 years. Could they advance in the ways they hoped? Did structural conditions wear them out? In short, how much can the Mexican government do for them?


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