The election of Donald Trump as U.S. President has already had quite an impact on Mexico and its wealthiest person, Carlos Slim Helu.
As of March 19th Mr. Helu is worth a staggering 59.1 billion dollars. What is interesting is the fact that his wealth has declined by over 27 billion dollars since 2015 and since Mr. Trump was elected in 2016 his wealth has declined by over 5 billion. (Forbes, 2017).
Mr. Helu is Hofstede’s power distance score for Mexico in action. Mexico’s power distance score is 81, quite high for the power distance category. The global average for power distance is 59.31. Mexico’s power distance score is 68% higher than the rest of the world and equates to a culture that accepts an unequal distribution of power with the belief that it is okay for a certain few to hold great amounts of power. (PSU, 2017). Mr. Helu as the one of the worlds most powerful and wealthiest men is a prime example of this element of Mexican culture.
As a candidate for President Mr. Trump promised a few things that have significant impacts on Mexico and by extension Mr. Helu. Mr. Trump’s promise to build a wall between Mexico and the U.S., remove the U.S. from NAFTA, the North America Free Trade Agreement as well as potentially place a significant border tax on goods made in Mexico that are sold back to U.S. consumers all will have an impact on the Mexican economy and again by extension Mr. Helu.
When considering another of Hofstede’s six dimensions of culture, uncertainty avoidance, Mexico scores at 82, with the rest of the world scoring at 67.64. For Mexico uncertainly avoidance means as a culture they have a preference for avoiding ambiguous situations. (Penn State, 2017). Maureen Dowd, a renowned columnist of the New York Times, which Mr. Helu owns 17% of, has described Mr. Trump’s Presidency in this way “The capital has never been more anxious about its own government. The town is suffering pre-traumatic stress disorder. This guy is really going to be president. Finally, there is bipartisan consensus: It’s time to flip out. Decades after duck-and-cover was a way of life, people here are once more in duck-and-cover mode. No one knows what is going to happen, but they know it will be utter chaos and that the old familiar ways have vaporized”. (Dowd, M 2017).
As the U.S. goes through these turbulent times the world not only watches but also is impacted in very significant ways. In the case of Mexico its economy has already been damaged, “The Trump presidency streaking toward Mexico is already causing problems. Inflation has started rising in response to the devaluation of the peso caused by his election. The central bank raised interest rates five times in 2016; it will probably have to continue tightening. After a sharp rise in public debt as a share of GDP over the past several years, the government must curb spending. Over the past few months’ economists have lowered their forecasts for GDP growth in 2017, from an average of 2.3% to 1.4%. On January 1st the government cut a popular subsidy by raising petrol prices by up to 20%. Six people died in the ensuing protests”. (Economist, 2017).
Based on Mexico’s culture as defined by at least two of Hofstede’s six dimensions of culture the Mexican people and its wealthy like Mr. Helu are in for quite a ride.
The Pennsylvania State University (2017). Central America and Mexico. Retrieved March 16, 2017 from https://psu.instructure.com/courses/1826457/modules/items/21654149
Carlos Slim Helu & family. (n.d.). Retrieved March 19, 2017, from https://www.forbes.com/profile/carlos-slim-helu
Dowd, M. (2017, January 07). White House Red Scare. Retrieved March 19, 2017, from https://www.nytimes.com/2017/01/07/opinion/sunday/white-house-red-scare.html?rref=collection%2Fcolumn%2Fmaureen-dowd&action=click&contentCollection=opinion®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
Donald Trump’s presidency is about to hit Mexico. (2017, January 14). Retrieved March 19, 2017, from http://www.economist.com/news/americas/21714397-protectionist-entering-white-house-mexico-ponders-its-options-donald-trumps