Today's @bopinion post is about Mexico.
Mexico is doing a lot better economically than Americans might realize.
bloomberg.com/opinion/articl…
2/Economists usually think of growth as exponential. In Mexico, it looks more like a straight line.
That's not great...but it's not terrible either.
3/Mexico is what the World Bank calls an "upper middle class" country.
worldpopulationreview.com/countries/midd…
It's per capita GDP (PPP) is over $20,000, putting it ahead of Argentina, and over 4 times as rich as, say, Bangladesh.
4/And Mexico's inequality is pretty bad, but it's been getting less bad.
5/But here's why Mexico's recent performance is actually pretty impressive - it comes IN SPITE of the country's once-mighty oil industry being in a death spiral.
Mexico's oil production peaked and went into steep decline since 2006, thanks to its biggest oil field running out.
6/When oil runs out, you have to switch to manufacturing and services.
That's much easier said than done.
But Mexico has been doing it!!
7/Mexico has more than doubled the percent of its GDP that it spends on education since the 1990s. And its literacy rate has climbed to essentially universal literacy.
8/Thanks to productivity improvements in Mexico and cost increases elsewhere, Mexican manufacturing is now one of the world's most competitive.
bcg.com/publications/2…
9/And foreign direct investment is pouring in.
10/Meanwhile, even as oil production has fallen by half, Mexico's exports - 90% of which are now manufactured goods - have continued to soar.
11/And we're not talking about toys and clothing. We're talking about electronics and cars. High-tech, high-value stuff!
12/No wonder Mexicans are, on net, leaving the U.S. for Mexico.
13/Of course, I don't want to be unrealistic here. Mexico still has huge challenges, including:
1. the Drug War
2. building global brands
3. still-high inequality
14/But in general, Mexico is doing much better than Americans may realize. It's not a basket case - it's an up-and-coming industrial powerhouse.
(end)
bloomberg.com/opinion/articl…
(sorry, should be "upper middle income")
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