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06/19/2012

Why can't Mexico get ahead?

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.

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Jfmpastore

Mexico's problem is it's 'corporatist' (obsessively hegemonic) system of governance which, formally or informally, suppresses competition and dissent by co-opting or incorporating institutions and special interest groups, normally independent of government, into government.

Mostly achieved by the MxGov's brutal 'paracaidistism', where persons sanctioned by the MxGov literally squat within the special interest groups to control them; likewise squat in businesses to sack them.

Serenity Escapes

all good comments....how come I cannot comment on the fake son of El Chapo's arrest?...I would like to, but of course I cannot remember my password and the site gives me no option as to how to retrieve it...I do not want to enter via Face...

anyway, as I said, all the comments here today are good ones, simple and true...I would add under- education...Mexico often looks to foreign countries to do its planning, the over all education here is terrible, down there with Senegal and Iraq and other countries that are educationally challenged..also La Gorda, Ester Gordillo, head of the supposed "teachers'" union...no sirve, la vieja...

Angela

Why blame NAFTA? Like Mexico was so much better off before?

Why can't Mexico get ahead?
Just one word:

CORRUPTION

Dave Palmer

Mexico, like most of Latin America, is suffering under the weight of three mountains -- imperialism, feudalism, and bureaucrat capitalism. The Chinese have a story about this: http://www.chinapage.com/story/oldman.html

Gareth

The NAFTA free trade agreement which has facilitated the dumping of subsidized American corn and other agricultural products on the Mexican market has devastated small scale agriculture and that is very much a part of the problem.

Bummer

Mexico is a country where anyone who gets a position of authority thinks of only one thing: using their power to get "la mordida." Carlos Slim, the Salinas brothers, Felipe Calderon and all the other members of Mexico's kleptocracy are only good for looking out for number one and for leaving a wrecked Mexican economy in their rear view mirror. The high level looters in Mexico are just as greedy as the corrupt rulers like Robert Mugabe in African countries. You cannot expect much when a country's leaders use murder as a first resort when dealing with problems like drug trafficking.

Dave Palmer

If having abundant resources and an industrious population were the keys to success in the global market, Africa would be the most prosperous region by far. Instead, it is the least. That should tell you something about how the global economy works.

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Tim

This blog is written by Tim Johnson, the Mexico bureau chief for McClatchy Newspapers.

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