Mexico - Aztec Tiger On The Rise?
There’s a fascinating debate going on in the U.S. media about whether or not Mexico is truly emerging as the next economic powerhouse. Interesting, that this debate seems to coincide with a concerted public relations campaign initiated by the new regime in Mexico City to change the conversation about Mexico. No more drugs and narco-killings; instead, lets talk about education, jobs, and economic development.
Many journalists and commentators have gotten on that compelling bandwagon: from The New York Times’ Thomas Friedman who recently claimed, “In India, people ask you about China, and, in China, people ask you about India: Which country will become the more dominant economic power in the 21st century? I now have the answer: Mexico."
To Chris Anderson, former editor of Wired magazine and current CEO of 3D Robotics, singing the praises of manufacturing across the border in Tijuana in an op-ed titled, “The Tijuana Connection: A Template for Growth.”
“The sense of possibility I felt when I first crossed from Hong Kong to Shenzhen in 1997 is what I now feel when I cross from San Diego to Tijuana. The trade routes of the 21st century don’t have to follow Marco Polo from West to East. Indeed, in the new manufacturing landscape, the routes don’t have to take you far at all.”
Even the Washington Post has joined the chorus, saying the emerging Mexican middle class lives in a land where, “NAFTA dreams come true.”
Wow. It’s a great story. The Mexican economy is booming, relatively speaking, with a growth rate exceeding 4 percent per year. As wages rise in China, “near-sourcing” becomes more attractive than “out-sourcing” and Mexico looks like a very compelling trade partner. A growing Mexican economy and middle-class could also help resolve another vexing problem — illegal immigration. Create jobs south of the Rio Grande, and the economic magnet in the U.S. loses power.
But for anyone with experience in Mexico, it sounds too good to be true. And so there are also arguments penned in major newspapers and journals in the U.S. trying to put a damper on what seems naïve enthusiasm about Mexico’s imminent rise.
The Miami Herald reports, for instance, on the fact that few people in Mexico seem to share Thomas Friedman’s optimism about their own country. A contributor to TIME magazine is skeptical as well, citing historical examples of how the “Mexican Miracles” has been over-hyped and wrong in the past.
Many of these arguments are a rehash of the progressive versus free trader debates over NAFTA. And, as the 20th anniversary of that agreement approaches early next year, we can expect to hear even more about the successes and failures. Fronteras Desk explores some of this in a series late last year, and came up with a decidedly mixed review: in some areas, a success, in others, a failure.
“… the verdict is indisputable: NAFTA failed to spur meaningful and inclusive economic growth in Mexico, pull Mexicans out of unemployment and underemployment, or reduce poverty. By all accounts, it has done just the opposite.”
And it is hard to dismiss some painful facts: the poverty level in Mexico has gone up. Currently close to 52 percent of the population is impoverished. The gap between the rich and poor in Mexico is getting bigger, and is one of the worst if not the worst in all of Latin America. Free traders touting low wages in Mexico are excited at the prospect of a $4.53 average hourly rate so close at hand. That’s just 17 percent an average American hourly wage – and so close! This excitement, at the same time that Forbes is reporting the combined net worth of Mexican billionaires rose an astounding 18.4 percent last year, totalling $148.5 billion.
At a recent lecture I attended on Mexican history, I asked this professor about the so-called rising middle class in Mexico. He said it wasn’t happening and explained that despite the growing economy, Mexico is still run by 50 families and their relatives and that the wealth is just not trickling down. That’s one explanation.
So the debate in the media on whether or not Mexico is a rising star goes on, paralleled with familiar stories on whether or not NAFTA is a success, or a failure. Perhaps it is all just the latest chapter of wishful thinking but it is also a recognition, increasingly important, that whatever is happening in Mexico matters a great deal.