|
Mexico
by the Numbers - Latin America's Powerhouse
By Louis Nevaer, Pacific News Service, April 24, 2001
Free
trade has been a boon for Mexico, according to the country's
official figures, giving it unprecedented strength in the
region and making it the real star of the just- completed
hemispheric summit. PNS commentator Louis Nevaer is a business
consultant in Merida, Mexico, and has authored several books
on Mexico's economy.
MEXICO
CITY -- Leaders from the Western Hemisphere who came to Quebec
City for the Third Summit of the Americas clearly wanted to
meet new U.S. president George W. Bush, but many also looked
forward to consulting with Mexico's Vicente Fox.
Less
than seven years after the North American Free Trade Agreement
(NAFTA), joining the United States, Canada and Mexico, it
is Mexico that has emerged as the economic powerhouse of Latin
America.
A
widely-anticipated report from Mexico's Ministry of the Economy,
issued 48 hours before the Summit opened, documented what
everyone in Latin America has been whispering for almost two
years: Mexico is the "leading commercial power" in Latin America.
It
accounts for "46 percent of all exports from the region,"
the Ministry reported, reflecting an increase from` $41 billion
in 1990 to over $166 billion last year.
Mexico
now exports more than Brazil, Argentina, Chile and Venezuela
combined. This is an incredible success story, given that
in 1994 the peso collapsed days before NAFTA was implemented
and in early 1995 an emergency $50 billion rescue package
was necessary to bail out Mexico and prevent a default.
The
Ministry credits NAFTA with this arresting turnaround, citing
the 12,355 American companies that have expanded their business
in Mexico -- from McDonald's to IBM -- and spent $43 billion
dollars in setting up shop.
In
addition, $84.9 billion has flowed into the economy in the
form of investment capital during the same time. This in turn
has contributed to internal economic growth that is so robust
-- and sustainable -- that Mexico is expected to export over
$200 billion to the U.S. in 2001.
On
the border, the U.S. Immigration and Naturalization Service
reports that the numbers of undocumented aliens crossing the
border has dropped by more than 50% since 1998.
Jobs
at home means fewer Mexicans leave for the U.S. And the Mexican
Migration Project reports that Mexican workers in the U.S.
are beginning to return to Mexico. "In the course of their
working life, more than 80% of Mexicans who go to the United
States to work, return to Mexico," Jorge Durand said
The
Mexican Migration Project reveals, in fact, that Mexicans
go to the U.S. to work, save as much as they can, then return
to open their own small businesses, with little desire to
remain in the U.S. That Mexico's birth rate continues to fall
means that the population level is expected to level off later
this decade, at approximately 110 million people in Mexico
(and 12-15 million Mexicans in the U.S.).
At
a time when Brazil and Argentina are experiencing economic
difficulties, the emergence of Mexico as an economic powerhouse
of Latin America is the buzz of the Summit.
"There
is a vital link between freedom of people and freedom of commerce,"
George W. Bush said before embarking to Canada. "Democratic
freedoms cannot flourish unless our hemisphere also builds
a prosperity whose benefits are widely shared. Open trade
is an essential foundation for that prosperity and that possibility."
Mexico's
Vicente Fox could not be in more agreement. "Economic integration
throughout the hemisphere is the soundest way of avoiding
misguided development policies that have held so many back,"
he said in a news conference shortly after meeting with Senator
Jesse Helms. "That is our message that we will deliver in
Quebec: Mexico is the role model."
Mexico
is being scrutinized closely throughout the hemisphere. Chile,
in particular, believes it will be the next nation granted
hemispheric free trade status with the U.S., Canada and Mexico.
Canadians, on the other hand, have mixed emotions. Foreign
minister John Manley told reporters Mexico "could become the
largest trading partner of the United States within this decade."
Pointing out that Mexico had already displaced Japan, Manley
conceded that Canada's "competitive advantage over Mexico
for quality will diminish" as the decade proceeds. Including
oil, Mexico's total trade with the U.S. in 2000 exceed $200
billion, compared with $350 billion between the U.S. and Canada.
Economics
and politics go hand in hand, and many were shocked at the
recent announcement from Foreign Affairs Minister Jorge Castaneda.
Castaneda simply said Mexico sought a more "proactive role
in world events," -- not only increasing foreign aid to Latin
American nations -- including Cuba -- but increasing its presence
around the globe.
For
the first time ever, Mexico announced it would send troops
on United Nations peacekeeping missions. And some policymakers
are contemplating Mexico in 2010, when the country is expected
to experience a labor shortage.
The
hemisphere's leaders may have gathered in Quebec City, but
what's on their minds is Mexico City.
|
U.S.
- Latin America: Economic Ties