Friday, August 23, 2013

Mexico: More Than Borders and Beaches

The biggest surprise from my recent visit to Mexico was how wide the gap is between how most Americans perceive our neighbor to the south and the reality of what it is today.

The view of Mexico from t
he United States seems to either fixate on the struggles we have along the border or the attractiveness of their seemingly endless number of magnificent beaches. The truth is that in between that challenging border and inviting beaches lies a country of 116 million enterprising people on the move. The United States ignores that reality to its detriment.

Five experiences from my trip highlight aspects of Mexico that most Americans ignore:

Political Maturation: With the landmark election of Vicente Fox as president in 2000, Mexico's democracy has matured into a multi-party competition where the peaceful handover of power is commonplace. While dining with former President Fox, it was clear he is following the path of past American presidents by contributing to political discourse through educating future leaders, advancing ideas, and being available to support, not undermine, the current opposition party president.

Political Cohesion: Meetings with both Institutional Revolutionary Party (PRI) President César Camacho Quiroz and the National Action Party (PAN) President Gustavo Madero reinforced the sense of political maturation in Mexico through collaboration that is missing in current American politics.

After the 2012 Mexican presidential election of PRI candidate Enrique Peña Nieto, PRI, PAN, and the leftist PRD party agreed on an alliance, known as the Pact for Mexico, to work together to tackle seemingly intractable challenges that have vexed Mexico for decades. The trio has taken action to increase the effectiveness of education, streamline labor restrictions, and to facilitate competition in the telecommunications, media and banking industries. Freeing up the energy sector is next on the docket.

Sound Economics: Solid economic goals have buttressed political gains. While the Brazilian government has preoccupied itself with state-directed capitalism and intervention in currency markets, Mexican politics has largely been driven by efforts to free the economy from the inefficiencies caused by state control or private monopolies. The success Mexico has achieved has attracted reverse migration from the United States. During my meeting with Bank of Mexico Governor Agustin Carstens, I was struck by his focus on the benefits of providing the private sector long-term certainty, the kind of enlightened policy guidance that has greatly benefited Mexico.

Young, Industrious Workforce: The rise in Chinese manufacturing has received great attention. However, the "Hecho en Mexico" brand is prepared to take on all competitors. According to the latest census statistics, half of Mexico's population is age 26 or younger. While many other nations, including China, are facing demographic challenges, such a young, vibrant workforce is a real strength.

The Mexican economy is adept at designing and building products up and down the supply chain, unlike other emerging markets that only provide labor stock. Mexico excels at making large complex products, holding the titles of largest flat screen television exporter, the third largest computer manufacturer, and fourth largest vehicle exporter in the world. It is no slouch in white-collar occupations either, graduating more than 115 thousand young engineers every year, more than Canada, the United Kingdom, Germany, or emerging market rival Brazil. Its IT services industry is one of the five largest in the world. The United States' technological prowess and highly productive laborers collaborating with such a young and talented workforce creates a highly competitive duo.

Affinity with the United States: Canadians tend to bristle when reminded of how similar they are to Americans. Mexicans, however, have an amazingly warm view of the United States. Despite the heated rhetoric involving stereotypes and caricatures of Mexican society from some American politicians, Mexicans generally retain a positive spirit about their association with their northern neighbor. Many Mexican business and political leaders are pleased that their country's economic future is hitched to diversified integration with the United States' economy rather than simply providing resources to Asia, as is the situation for much of South America. Rather than despising Mexico's affinity towards the United States, we should embrace it.

While Mexico still has work to do to secure its border, free up its economy, and provide ample opportunities for its citizens, one must recognize that it is well on its way to joining the ranks of the world's great powers.

Rather than fixate only on its border and beaches, it is essential that Americans see the bigger picture: a cohesive, democratic, economically vibrant, and friendly neighbor that would be the envy of any great power.

Much ink has been spilled talking about how China might overtake the United States economically. Yet there have been no articles about China overtaking a North American economy. Indeed, the complementarity of the United States and Mexican economies make us a far more formidable competitor together than we are apart.

A core American strength has always been its alliances. Mexico was pulled into World War II when ships providing supplies to the United States were attacked. Its fighter pilots fought alongside America in the Philippines. A tighter embrace of Mexico could lead to a cornucopia of benefits for both nations.

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