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The Plague Beneath The Plague — The Coronavirus Besieges The Emerging Markets

Jul. 27, 2020 3:18 AM ET
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Former Central Banker, Contrarian

Seeking Alpha Analyst Since 2016

Danielle DiMartino Booth makes bold forecasts based on meticulous research and her years of experience in central banking and on Wall Street. Known for sounding an early warning about the housing bubble in the 2000s, Danielle offers a unique perspective to audiences seeking expertise in the financial markets, the economy, and the intersection of central banking and politics. Quill Intelligence offers a daily option for subscribers, delivered every trading day morning.

Some history should never be repeated. In April 1915, dark clouds descended on Mount Lebanon. If only they had been rainstorms over the horizon. For more than three months, swarms of insatiable locusts besieged what was then known as Greater Syria, devouring everything in their path. The rains never came that year. And far too many men were conscripted by the Ottoman Empire that had ruled the land for the better part of 400 years. The countryside’s fields were emptied at a time when agricultural goods were desperately needed for the war and population. The military’s sins would only multiply. Buttressed by Allied and Turkish blockades, all cereals and wheat were prevented from entering Mount Lebanon, which at the time had a population of 400,000. In what became the highest death toll of World War I, an estimated 200,000-250,000 died as a result of starvation and the inevitable diseases that attend all famines.

With the end of the war, the Greater Syrian exodus that had begun in 1870, catalyzed by the collapse of the silk trade that accompanied the opening of the Suez Canal, was further spurred by the magnitude of the tragedy endured. In the 60 years ended 1930, some 330,000 migrants had fled the region for the Americas. An estimated 120,000 went to the United States with the balance landing in South America, mainly Argentina and Brazil. Some, though, made their way to Mexico which itself had been beset by a civil war in 1910 and campaigns against foreigners that followed. A 1927 law banning immigration from the Middle East and making those already in the country subject to deportation sent many Lebanese fleeing Mexico’s big cities. Rendered nomads, many immigrants became peddlers and merchants, fanning out to small towns and remote communities.

The Turcos, as they were known, grew prosperous as a result of the crucial role they played in the emerging economy. Though the Lebanese only made up 5% of the immigrant population in the 1930s, they constituted half of the immigrant economic activity. Carlos Slim stands tall as the prime example of Lebanese Mexican success.

Today, a different immigrant has easily made itself at home in Mexico with little resistance from the country’s struggling healthcare system. This immigrant is also very industrious but in a sinister and indiscriminate way. From what we can discern, the virus is agnostic to weather and location. Unchecked, as has been the case in far too many emerging economies, the ultimate devastation exacted remains an unknown.

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