The street blockades that almost paralyzed Mexico City and Buenos Aires in recent days, interrupting traffic and keeping millions of people from going to work, are becoming a major economic problem. But their invisible costs may be larger than their immediate monetary impact.

Last week, members of Mexico's electricians' union blocked major streets and access roads to Mexico City, preventing people from going to work and school. Simultaneously, in Buenos Aires, there was even more than usual traffic chaos when a strike by subway workers forced tens of thousands of people to drive downtown in their cars.

During the first nine months this year alone, Buenos Aires has suffered 440 street blockades, or more than one a day, according to Argentina's daily La Nación. The Mexico City Chamber of Commerce says there have been nearly 200 traffic-obstructing marches in Mexico City, or about 22 a month, over the same period. They cost the city an average of $140 million a month in lost sales because people can't get to stores, the Chamber says.

"And that doesn't count the hours that are lost by workers," says Arturo Mendicuti, the chamber president. "I myself have been stuck in traffic for more than three hours."

HURTING INVESTMENT

Traffic-obstructing protests are also hurting investment in a region where, according to the United Nations Economic Commission for Latin America (ECLAC), outside investment is already expected to fall by about 40 percent this year because of the world recession.

The street blockades "complicate an already difficult business environment," says Eric Farnsworth, vice president of the Council of the Americas, a New York-based group representing 190 firms doing business in Latin America.

"They make it more difficult for workers to go to work, and for products to get to markets. They also hurt investment, because companies do not want to go or expand where the local environment is volatile."

During the recent Conference of the Americas in Miami, I witnessed a fascinating exchange involving Buenos Aires opposition Mayor Mauricio Macri, pro-government Buenos Aires province Gov. Daniel Scioli and Mexican congressman Luis Enrique Mercado, of the ruling National Action Party.

Macri, who blames President Cristina Fernández de Kirchner's government for not ordering the police to keep the streets open, said the escalation of street blockades "is moving Argentina in the direction of an anarchic society, where there will be fewer investments and more poverty."

He added: "You often have just 10 people blocking traffic, and the police are protecting those 10 people instead of the hundreds of thousands who need to go to work. That's ridiculous."

Scioli disagreed, arguing for moderation and greater efforts to solve conflicts through dialogue.

"It's not a question of imposing order at any cost," Scioli said. "We must try to find a balance between the rule of law, the respect for private property and workers' demands."

ESCALATION

Mercado almost jumped from his seat. Shaking his head in disagreement, he said: "When societies adopt a culture in which it's tolerated to break the law, then people say, 'If I can break the law a little bit, I can break it a little bit more.' It's an escalating process."

He added that Mexico's current drug-related violence "was not born overnight. It's the result of a culture of illegality that has escalated to unbelievable levels."

My opinion: I agree. The wave of street blockades is more than a nuisance or even an economic problem. It has an invisible cost that erodes the moral base of a societies already fighting widespread tax evasion, corruption and organized crime.

Granted, the solution isn't to flog protesters with canes, like in Singapore, nor to send them to jail or psychiatric hospitals for decades, as they do in Cuba. But there should be some legal consequence for people who exercise their legitimate right to protest by blocking the streets and interfering with other people's rights.

Otherwise, the 'anything-goes' culture will keep growing, and the invisible costs of street blockades will be much larger than the lost dollars and cents.

 

 

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