Election uncertainty won’t help Mexico’s economy

Dan Grech Jul 3, 2006

MARK AUSTIN THOMAS: Two years of campaigning for the political future of Mexico boiled down to yesterday, when Mexican voters went to the polls. Would they choose a leftist who wants government to intervene more to help the poor? Or a pro-business free-marketeer? Well, nobody knows for sure right now, and it will probably be a couple of days. Marketplace Americas Desk correspondent Dan Grech is in Mexico City.

Hi Dan.

DAN GRECH: Hi, Mark.

THOMAS: Dan, Sunday was obviously a big day where you are. What was it like for businesses there?

GRECH: Well, you know, election day here in Mexico is kind of like a national holiday. Since midnight Friday, no restaurants or bars in Mexico have been allowed to serve alcohol. So, a lot of the places I saw on Sunday didn’t even bother opening. But I did run across this one restaurant that was doing really good business. It was a family-owned chain of restaurants called Condituri. And they were offering a 20 percent discount to any customers who voted. The way that they could tell a customer voted is that they had to show their stamped voter card. They also had to show that they had an indelible ink mark on their right thumb, which is the way that the polling places make sure no one votes twice.

THOMAS: Why did the restaurant owner offer that 20 percent discount?

GRECH: Well, you know, I was curious about that myself. So I spoke to the restaurant owner, Karen Arenlund, and this is what she told me:

KAREN ARENLUND: This is a family-owned company. And we think it is very important to vote. Of course, it will bring us more clients in, it’s a double win. But the main thing was, we want people to vote.

GRECH: I guess it ended up being a pretty savvy marketing strategy. She said the restaurant got a fifth more customers than her usual Sunday.

THOMAS: Which candidate was she supporting?

GRECH: Well, the owner voted for Felipe Calderon, which is actually not really a surprise. He’s considered the business-friendly candidate. But her customers, like the country as a whole, were pretty evenly divided between Calderon and his opponent, Andres Manuel Lopez Obrador.

THOMAS: Mexico’s top election official said on national television Sunday that the vote’s too close to call. The final tally won’t be ready until at least Wednesday. What’s the worst-case scenario of what happens next.

GRECH: Well, Mark, in a sense this is already a worst-case scenario for the Mexican economy. Investors hate uncertainty. They’d rather see their favorite candidate lose than have this election drag on for days, as it’s looking like it’ll do. There’s even a fear that the losing candidate might call for street protests. And that could send the country into chaos. The markets have already been reacting to this news. Mexico’s peso lost 1-1/2 percent in after-hours trading late on Sunday night.

THOMAS: Well, Dan, thanks a lot.

GRECH: Thank you.

THOMAS: Marketplace’s Dan Grech in Mexico City.

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