Mexico in recent years has made great strides forward in terms of economic performance. There are still a number of hurdles though the country must overcome before becoming a first-tier developed nation, according to new report a nongovernmental organization specializing in inter-American affairs.
The Washington, D.C.-based Council on Hemispheric Affairs (COHA) notes that by certain statistics Mexico’s middle class is growing, improving the quality of life for the average Mexican.
One key indicator that often differentiates developed nations, fertility rate, is also now consistent with many Western countries. In the 1960s, the fertility rate in Mexico was 7.1 children per woman. In fifty years that figure has plummeted to 2.3 children per woman, only slightly above the United States.
At the same time, the country’s education system has improved dramatically. For example Mexico now graduates more than 100,000 engineers each year. In 1950, according to a paper for the National Autonomous University of Mexico, there were fewer 30,000 students across the whole country enrolled at the bachelor level.
The number of capital- and human-resource-intensive infrastructure projects that Mexico undertakes is also on the upswing.
Looking at these measures, COHA author Manuel Corrales says we can expect this growth pattern to continue, with Mexico’s economy reaching that of Spain or Russia by the end of the decade, and surpassing Italy by 2030.
Despite the positive indicators, Corrales notes a number of mitigating negative trends that mean Mexico hasn’t graduated to being a developed nation just yet.
Security is a major preoccupation in Mexico, namely the costly and deadly drug war that has killed over 50,000 people since 2006 when President Felipe Calderon directed the army to take down drug cartels.
“Security arguably remains the most important concern for the majority of Mexicans,” the COHA report states. “Mexico has been entirely unsuccessful at controlling violence within its borders, failing repeatedly to combat the cartels.” Not only is the drug war a security concern, but it is also estimated to drain between $30 billion and $50 billion from the economy each year.
Compounding the security issue is another major hurdle—rampant corruption. Corruption is widespread in business as well as numerous public sectors, including the police and government.
“In Mexico, government and corruption seem to be synonymous,” the report states, noting that in 2010, $2.5 billion was paid out in bribes to police officials across the country.
Mexican businesses are “taking advantage of rampant corruption at the highest levels” and have blocked workers from collective-bargaining agreements and forming unions. This type of corruption flourishes because Mexico lacks laws and regulations that balance the interests of workers, writes Corrales.
In terms of education, despite great strides over the last four or five decades, Mexico lags considerably behind developed countries. Only around 45 percent of secondary students in Mexico go on to graduate, compared to 75 percent in the United States.
“A skilled labor force is imperative to sustain Mexico’s economic growth, and while post-secondary education in Mexico looks to be on the rise, primary and secondary education still requires vast improvements,” the report concludes.Mexico’s income inequality is also among the worst in the world, being ranked second on the 34-nation Organization for Economic Co-operation and Development’s list of nations with the worst inequality among the rich and the poor. On average, the top 10 percent of wealthiest Mexicans made 27 times more than the poorest 10 percent, the report noted. The average for OECD countries is a ration of nine to one.
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