As fears of a swine flu pandemic grew across the globe, in Mexico, where the virus was first detected, the government on Tuesday put the influenza death toll at 159, with the total number of cases reaching 2,498. Of these, 1,311 remain hospitalized.

On Wednesday, Mexican Secretary of Health Jose Angel Cordova announced that the number of deaths in which the new strain of swine flu had been confirmed as the cause stood at seven. The number of confirmed cases in which the victim survived was put at 49.

While the number of confirmed swine flu fatalities represented a decrease over previously announced figures, it provided cold comfort to the Mexican population, as the overall death toll continued to rise and measures taken to combat the epidemic led to increasing economic hardship and paralysis.

The flu epidemic has centered in Mexico City, which, with 22 million people, is the largest metropolitan area in the Western Hemisphere.

The Mexican government has closed schools in all 32 of the country’s states, putting 34 million students, from pre-school to university, out of their classrooms at least until May 6.

Suppliers have reportedly run out of surgical masks, which are being used widely by people in the streets of Mexico City.

The health crisis is exacting a terrible toll on the country’s economy. Mexico was already the country most affected in Latin America by the global financial meltdown, because of its close ties to the United States. The maquiladora assembly plants near the border have carried out mass layoffs in response to plummeting demand in the US. Meanwhile, two principal sources of national income, oil and remittances sent home by the nearly 13 million Mexican immigrants in the US, have fallen sharply.

The third, tourism, had suffered a significant decline before the epidemic, but has now been decimated, with the US, the European Union and other countries advising against travel to Mexico. In Europe, the French government has called on the EU to impose a ban on flights to the country. There have already been 2,500 cancellations of visits in group travel alone. In Mexico City, 90 percent of hotel rooms are unoccupied.

A decision by the authorities in the capital to close down virtually all places where people gather—restaurants, bars, nightclubs, movie theaters, gyms and athletic clubs—has brought fully one quarter of economic activity in Mexico City to a halt. The city, in turn, accounts for one third of all economic activity nationwide.

Mexico City officials estimate that the epidemic is costing businesses $85 million a day in lost revenues.

Most hard-hit are the 450,000 people working in restaurants and bars, 70 percent of whom have been laid off and left without any income.

According to initial estimates, the health emergency could shave another full percentage point off of Mexico’s economic growth. Last week, the International Monetary Fund predicted that the country would see its economy contract by 3.7 percent as a result of the deepening world crisis. Banco Mexico on Wednesday said it may shrink by as much as 4.8 percent this year—before the impact of the present health crisis is included.

Banamex, Citibank’s Mexican subsidiary, estimated that in the first week since the state of emergency was declared, private consumption in Mexico had suffered a decline of $3.3 billion.

The government has not decreed a halt to all economic activity, and limited measures mandated to protect Mexican workers from the spread of the influenza—including protections for pregnant and nursing women—have apparently been flouted by some multinational firms. The local office of the secretary of labor in Mexico City announced Wednesday that it was bringing a case against a US-based clothing firm over conditions in its factory in Edomex, outside of the capital.

The department also announced the cancellation of 13 May Day marches scheduled on Friday, in which an estimated 120,000 workers had been expected to participate.

Meanwhile, there have been growing questions about the origins of the new strain of swine flu—designated as the H1N1 virus—and the way in which the Mexican government has responded to it.

Mexican health authorities have identified the first known victim of the new swine flu as five-year-old Edgar Hernandez, who lives in the town of La Gloria, in the eastern Gulf Coast state of Veracruz.

La Gloria is part of the municipality of Perote, where last month there was an outbreak of flu and respiratory infections that affected at least 1,600 people out of a population of 3,000. Municipal authorities appealed to the Mexican health department for assistance. The town was cordoned off and brigades of public health workers were sent in to treat people and exterminate swarms of flies that had infested the town.

Perote is the location of Granjas Carroll, one of the country’s largest pig farms. Fifty percent of the operation is owned by the US-based corporation Smithfield Foods, headquartered in Virginia. It produces close to one million pigs annually.

Smithfield faced repeated fines and lawsuits over its operations in the US. After its hog waste lagoons overflowed and polluted rivers and streams in North Carolina, the company settled an environmental protection lawsuit in 2000 by agreeing to pay the state $50 million.

Residents of Perote have long protested that the pig farm—with its open lakes of pig excrement and toxic chemicals—was destroying the local environment and damaging their health, but to no avail. Local and national officials defended the company, while threatening and prosecuting those who protested.

As the Mexican daily La Jornada commented in an editorial earlier this month: “For polluting with its waste, the powerful company, the principal shareholder of Carroll, was fined in the United States. Here, on the other hand, it is permitted to do anything... Moreover, it should be noted how local authorities persecute those who fight for the environment and health.”

Even after the flu outbreak, agents of Mexico’s Federal Agency of Investigations came to Perote to arrest one of the protesters, the peasant Guadalupe Serrano Gaspar. Meanwhile, the company has formally charged others with slander.

Smithfield Foods Inc., which is the largest pork producer in the world, issued a statement Sunday claiming that it found no evidence of swine flu among the animals or the workers at its Mexican factory farm. “Smithfield has no reason to believe that the virus is in any way connected to its operations in Mexico,” the company said.

The state legislature in Veracruz, however, has launched an investigation of Granja Carroll and demanded that the company turn over internal documents. Marco Antonio Núñez López, the chairperson of the legislature’s environmental committee, described hog farms as potential “hot spots” for infection.

Criticism is growing of the Mexican government’s handling of the epidemic. The magazine Proceso raised a series of questions in its current issue, including: “If since April 2 the authorities in the secretary of health’s office had confirmed the first case of swine influenza in a boy of four in the Perote community of Veracruz, why didn’t they take adequate measures?”

The director of the Mexican Epidemiological Organization, Oswaldo Medin, told the Mexican daily Reforma that the country’s healthcare system was ill-prepared to confront the flu outbreak. “Identification of the disease comes late, the response is delayed and the diseases cannot be controlled,” he said.

The Associated Press, meanwhile, reports that the government has yet to even provide treatment to the families of those who have died from the disease. Health Secretary Cordoba stated on Monday that his department did not have adequate resources to make such visits. “We haven’t given medicine to all of [those suffering from flu symptoms] because we still don’t have enough personnel,” he said.

While the World Health Organization and other international agencies have declined to comment on the Mexican government’s response, the director of Brazil’s health agency, Agenor Alvares, was openly critical, stating Monday, “I think that there was a delay and, in cases like this, notification should not be postponed.”

The most critical question being raised, however, goes to the very nature of Mexican society, dominated by social inequality, poverty and exploitation. Why has Mexico been the only country whose citizens have died—thus far—as a result of the new swine flu?

Asked this question by a reporter Tuesday, Health Secretary Cordoba responded, “Because here they keep arriving late.” In other words, those suffering flu symptoms do not show up at hospitals until the illness has dragged on and they are extremely ill, suffering from severe pneumonia, which cannot be reversed by antiviral drugs.

This, of course, begs the question, why don’t they seek medical treatment earlier? The answer is that the vast majority of the population is poor and cannot afford to pay for a doctor or medicine. Successive financial austerity plans, meanwhile, have significantly degraded the country’s public health system.

In other words, Mexican workers are paying with their lives for a system that has systematically transferred social wealth from the mass of the population to a native ruling elite and its mainly US-based corporate and financial partners.

Mexico’s president, Felipe Calderon, of the right-wing PAN party, has come under increasing fire for his role in confronting the epidemic. As the Reuters news agency noted: Calderon “has not been seen in public since Saturday” and he “has not addressed the nation directly on television.” The Mexican daily El Universal on Wednesday published a cartoon portraying Mexico as a sinking ship, with the caption: “Where is the captain?”

Sections of the media have noted that the fall of Mexico’s Institutional Revolutionary Party (PRI), which ruled the country for seven decades until its defeat in 2000, had its origins at least in part in the abysmal response of the PRI government to the 1985 earthquake which claimed 10,000 lives in Mexico City.

The Calderon government’s response to the outbreak of the flu epidemic—compounding an increasingly severe economic crisis—has raised profound political questions and may well contribute to a new upsurge of social struggle in Mexico.