Tuesday, October 14, 2008

You don't bring me flowers any more


The financial crisis up North will hit all sorts of soft targets and an example of that is Ecuador's flower exportation business. Ecuador's cut flower business is big business; it has 5% of world market share and is the second largest supplier to the USA. However fear abounds, and in this report the local experts now say that in a worst-case scenario the country would lose up to $100m of business and perhaps more importantly some 30,000 jobs. That kind of figure does sound extreme, but there's plenty of logic about an average Joe family cutting back on florists' bills in order to pay their mortgage, no?

The same might be true for chocolate, too. Luxury foods will either lose pricing power, or market or both (unless the North smothers its depression in chocolate sauce and then sales might go up). As Ecuador supplies 58% of world demand for the stuff, there has to be worries about how badly the country will be affected by all this. And I haven't even touched on how dollarization leaves the country's economy nastily exposed and with little self-protection against the winds of change.

Maybe when Studmuffin said that the new mining law was "urgent", he wasn't joking after all. I mean, something has to take up the slack, no?