Mexico has abundant resources, an industrious population and open doors to the most powerful economic locomotive on Earth. So why isn’t it doing better?
It’s a question I’ve spent two months looking at, and the result is a package of stories that you can see here. It’s a look at where Mexico is headed, not next month or next year but in a couple of decades.
Economists say there is no reason why Mexico couldn’t reach the level of a moderately well off European country (presuming there is no euro-meltdown) by mid-century. But it would take dramatic reforms to knock off the political and economic shackles that hold back the country.
My articles look at some of the structural root problems in the country, issues that have hardly emerged in the current campaign because they cut to the core of power and privilege in modern Mexico. One article examines the monopolies that control what we eat, drink and watch on TV in Mexico. Another looks at the sad shape of the educational system. Still another – perhaps of some controversy – looks at whether the ‘maquiladora’ model is in fact a good long-term strategy for Mexico or if it is just trapping workers in poverty.
That article generated a few comments on various newspaper websites, some of them quite thoughtful. Here’s one example:
“Would the author suggest that things would be better without the 1.9 million manufacturing jobs in these factories, and the US$1.5 billion (yes, with a 'B') that these same factories pay each month in salaries and benefits? What domestic industry in Mexico could be substituted and provide such jobs and wage levels (wages that are very often higher than other job opportunities for lower-skilled workers in Mexico)? The answer, unfortunately (and not a subject that this article addresses) is there is none. So, my opinion: don't cast maquiladoras as the source of the problem - as they are one of the only options nearly 2 million people in Mexico have for jobs.”
Those are good, deep philosophical questions, and one that anyone concerned about development should ponder. I recall living in Central America in the 1990s where my attitude shifted quite sharply on the role of the assembly plants popping up there. Yes, owners of the plants could easily pick up stakes and move production elsewhere around the globe. Many did. But jobs were so desperately needed that I figured these plants were far better than having no job at all.
I’ve also spent time visiting factories all across China, from northern Shenyang and Ningbo near Shanghai to the Pearl River Delta while covering China for six years.
What I saw there – in addition to tremendous industriousness – was an implicit guarantee from the Chinese state: Do these jobs and your children will have a better life. You will, too, because we’ll ensure that wages rise (and they have).
Mexico is different. I detect little commitment from the Mexican state that those employed in low-wage jobs can build a better life for their children. I’ve rarely heard the Ivy League-trained technocrats in Mexico City voice concern about the children of the maquiladora workers even though many belong to the six million “ni-nis” – they neither go to school nor work.
And that’s a flaw in the Mexican model. I can see a country asking for one generation to sacrifice itself in jobs that keep its members only barely out of poverty. But for the sake of future generations, a strong government would ensure that children stay in school and that housing and other subsidy programs are not riddled with corruption. School is emphatically not free in Mexico, despite what the constitution mandates. And subsidy programs often appear to be slush funds for corrupt politicians. If the government were to try to lift wages gradually as it educates workers and retools the economy, Mexico’s future would indeed be different.