2011-09-06

Mexico Doesn’t Seem To Care About US Double Dip

There has been much debate over what will happen to Mexico were the US to enter a double dip recession. Many migrant workers from Mexico would be forced to return home to a country that does not have as many jobs as it does people. With unemployment figures in the US reaching a disturbing high, this may adversely affect Mexico sooner or later. As the banks in the US are unwilling to lend money, many construction projects have been put on hold and work is dwindling.

The Mexican government claims that whatever happens in the US will not be replicated in Mexico. It is a bold statement that is not entirely supported by the statistical facts. The worldwide economy has declined rapidly in the past year and on one has been immune. With Panama recently overtaking the rest of South America in terms of internet and computer usage, the business seems to have moved south of Mexico. The banks of Mexico do not yet appear troubled by the state of the affairs in their surrounding neighbours, yet they cannot remain indifferent forever.

There has been a rise in outsourcing document management and disaster recovery in Latin America. Is this due to a fear of economic collapse or something else? It is hard to speculate, but all the major banks have been pouring money into ensuring their data and IT infrastructures are protected. All of this has occurred in the past three years since the near collapse of the world’s banking system. It is likely that banks merely wish to remain cautious and protect their investments and systems.

The state of Mexico is reflected in almost every other Latin American banking system. An attitude of indifference to the US credit downgrade shows that no longer does the South American continent seem to care too much about what happens to their neighbours in the north. Chile and Uruguay are happily plugging away in the IT industry and the wealth of Panama is not to be underestimated. Cuba remains the only question for the banking industry. With the Libyan dictatorship now overthrown, the South Americas could be wondering if now is the time to overthrow the last remaining dictatorship south of the US. Already there have been varying media reports on whether or not the Cuban population is readying an offensive against the government.

For the moment, the financial situation in Latin America remains uncertain, yet positive.

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