Mexico City returns to normal as swine flu restrictions fade

Mexico City rubbed its eyes Wednesday morning, emerging from a five-day economic shutdown that authorities ordered to contain the swine flu – bringing a curious calm to one of the world's most frenetic capitals.

Men and women, dressed in suits and holding briefcases, walked down city streets en route to work as offices reopened Wednesday. Street vendors unfolded tables and chairs on sidewalks. Mario Antonio Figueroa, a juice vendor, says he's never been so happy to wake up at 4 a.m. to get to his spot on the street. "I just hope they let us keep working," he says, rinsing off a half-dozen oranges.

Restaurants also open Wednesday, as workers cleared off tables that were stacked away while takeout was the only service permitted. The next wave comes tomorrow, when high school and university students head back to class. Museums, libraries, and churches will also open doors. And by next Monday, elementary school students will be back on their playgrounds.

Residents have been eagerly awaiting the resumption of normal life. Health officials say the flu crisis, which had its epicenter here, is for now on the wane, although the death toll jumped from 29 to 42, as tests confirmed additional cases.

But while business will bounce back for many, Mexico still will contend with stigmas and diplomatic rifts that may take much longer to resolve.

"There is the cost associated with the interruption of economic activity; however, there is a second effect that is more permanent, and that is the psychological impact on people, on Mexicans in Mexico and international tourists outside Mexico," says Alfredo Coutino, a senior economist for Latin America at Moody's Economy.com. "My impression is that the impact is going to last for the rest of year."

The hardship that Mexicans have endured, which authorities cite as a main reason the flu has been controlled, was acknowledged this week by Mexican President Felipe Calderón. "This extraordinary situation has signified important costs for the economies of the states and especially the population in general," Mr. Calderón said.

$1.3 billion stimulus package

To aid in the recovery, the government announced a $1.3 billion stimulus package in tax breaks and funds for businesses, including hotels and restaurants, said Mexican Finance Minister Agustin Carstens. Mr. Carstens said the crisis will cost the country about $2.2 billion, or reduce GDP this year by 0.3 to 0.5 percentage points.

For those in the informal economy, like Mr. Figueroa, the statistics mean little. "We live day by day," says Figueroa, who sells juice for about 75 cents per glass. "The government officials that make the policies don't live off the pesos they earn each day."

And stigmas will be much harder to fight, especially in the tourism industry. Mexican Tourism Minister Rodolfo Elizondo has said that they anticipate tourism revenue to fall by 43 percent this year, as airlines cut their flights to Mexico, companies cancel their conferences, and honeymooners opt for other beach destinations.

Tourist cancellation rate soars to 70 percent

In Cancún, Mr. Elizondo said, cancellation rates are as high as 70 percent, and hotel occupancy rates for the first 10 days of May dropped to 44.8 percent; typically they are almost double that. In Mexico City, the normal hotel rate of 55 percent fell to just 15 percent at the end of April. Sixty-four port calls were canceled for cruise liners, meaning the loss of up to 134,000 passengers who could have stepped in Mexican territory to purchase food and souvenirs.

Four conventions were also cancelled, which would have brought in 47,000 visitors.

"No one loves us anymore," quipped a Mexican migration official as a visitor entered the country Monday evening.

Stigmas will be hard to fight even for Mexicans in Mexico, though, says Mr. Coutino. "For the restaurants and bars that open in coming days, they will not be working at full capacity because consumers are scared to go back," he says.

Diplomatic spats

The crisis has caused some diplomatic havoc for Mexico. Cuba and Argentina temporarily cancelled flights – a move heavily criticized by Mexican officials. In China, dozens of Mexicans were quarantined without evidence of being ill with the swine flu. Mexico sent a charter flight to retrieve them, but registered its dissatisfaction with the way China handled the situation.

Not all things are back to normal. It is still unclear when gyms, movie theaters, and bars, which were all forced to close their doors, will be allowed to reopen.

And for those heading back to work today, not all agreed it was for the best. Rafael Lopez, a lawyer, says he feels office openings are too rushed. "I think it would be better to wait a few more days until this calms down," says Mr. Lopez, whose business attire was complemented by a face mask.

But Israel Acevedo, who hauls supplies for a construction company, says he couldn't be happier to get back to work – even though, unlike many in the informal economy, he expects to be paid by his company for the days missed.

Mr. Acevedo says there was an upside: he finished housework that had been sitting around for weeks – like fixing a doorknob on his front door – and spending family time with his wife and kids. "We are all ready to get back, though," he says.