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Jessica Rachel Nancoo
Dr. Zhen He
GBDA 305
28 January 2015
Mexico: The Battle for Development
Mexico is internationally known for being one of the most dangerous countries in the
world to date. With an abundance of illegal activities, abductions and murders by massive drug
cartels, the battle for national development proves especially difficult. However, despite the drug
problem, costing 60,000 lives over the past 5 years, Mexico shows opportunity for change by
gaining global growth – with an increasing economy now amongst the top 20 worldwide (Grant).
This is largely due to the implementation of industrial and intercontinental trade initiatives that
have allowed Mexico to radically change its face over a short period of time. However, numbers
of inequality and violence still remain high from the lack of more robust economic and social
policies, hindering Mexico’s ability to ascertain to their greatest potential. This paper will seek to
analyze how Mexico has achieved its current state and uncover the obstacles in their path to
allude to how the country can finally become a developed nation.
Mexico today has one of the world’s most open economies, ranking 16th in the volume of
global trade (O’Neil). The significance placed in trading and exportation began with North
American Free Trade agreement, which marks as an important characteristic that has shaped the
country’s economic progress. This has created both positive and negative consequences as while
being a major player in the global market has allowed the country to generate income, Mexico
has fallen behind on broader measures of competitiveness. As Mexico focused on developing
their industrial sector, neighboring countries reformed their institutions and labor markets while
investing in education, infrastructure and innovation (O’Neil). The problem now lies in Mexico’s
less advanced regulatory frameworks that are contributing to the high levels of poverty,
inequality and crime. Despite its free trade and pro-business credentials Mexico’s own markets
are much less free due to the oligopolies and state monopolies that exert considerable influence
over crucial sectors of the Mexican economy (O’Neil). This leaves only a handful of people
producing large amounts of money while the lack of competition also thwarts innovation and
growth. Local entrepreneurs are also limited, being unable to receive loans as banks are more
interested in lending to easy borrowers, “companies well known in domestic or international
markets” (O’Neil). The lack of small and medium sized companies is impactful, as these
businesses tend to provide the most jobs and stimulate the local economy.
Employment opportunities are not only low within Mexico but employees are also given
large workloads with small wages that are not enough to cover employer lifestyles. In most
cases, workers must attend 2-3 jobs in order to provide for themselves and their families (Grant).
The importance of establishing labor laws or rather its lack of has had tremendous control over
Mexico’s development status as inequality leads to a tyrant of unhappy, unproductive and
unlawful citizens. The lack of opportunities and fair wages disable average Mexicans from
making a living, leaving them no option but to turn to illegal methods such as drug dealing,
selling pirated produce, starting unauthorized businesses etc. (Grant). This leads to the high rate
of criminal activities and corruption, which continue to impede on the productivity of the
country. The lack of ethical employee working standards also distracts potential foreign investors
who do not want to associate their business in an unmoral environment (Grant). These foreign
enterprises are a large loss to Mexico as they could provide a large change to the economy and
considerably reduce the amount of inequality by offering places of employment (Grant).
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Mexico has a population of well over 120 million people with most citizens in in the age
of 27, giving them the characteristic of having a large working demographic (The World
Factbook). In recent years, Mexico’s middle class has also shown growth, as now “nearly 40
million strong, middle-class familiars are the pillars of open market and democratic stability”
(O’Neil). This group has largely grown due to the investments of foreign companies like Coca
Cola, who have open production plants in certain areas of Mexico (Grant). This income bracket
can only continue to grow with the opening of small and medium enterprises, fostering citizens
with stable earnings who can then become reliable consumers. Walmart opened nearly 300 stores
in 2010 with supermarkets aimed at this middle-income bracket, believing that this middle class
will have a large part in determining the economic future of Mexico (O’Neil). While Mexico has
proven to have hardworking citizens, raising living standards with more money being allocated
to education, infrastructures and local start up business will attract international companies to do
more business in Mexico. The reformation of labor laws would also provide Mexicans with more
incentive to be productive and work with their country rather than participate in illegal activities
that oppose and hinder development.
The decisions made by Mexico have so far been in focus of obtaining country wealth
rather than national welfare and while some decisions were inevitable at the time there is now
room to make changes that are much needed. Mexico’s focus on privatizations in 1990 was an
unquestionable decision at the time; achieving over 900 sales in total this allowed the country to
turn things around in the aftermath of international debt (O’Neil). The effort in stopping illegal
activities through use of military forces is also another inevitable mission enacted by presidency
that was (and still is) required to ensure the protection of innocent citizens. The international
trade movements also allowed Mexico to generate income but without investment in country
developments and local entrepreneurs there is no capability of growth or opportunity for
economic stability in Mexico. The allowances of foreign companies have been a large help in
raising ethical working standards but without proper government laws there is no guaranteeing
worker protection (Grant). The country’s characteristic of low taxes has also provided
economical stimulus but at the same time the lack of social welfare and infrastructures hampers
efficiency and productivity, hindering Mexico’s industrial competitiveness (O’Neil).
The World Bank Organization classifies Mexico’s income level as being in the uppermiddle income bracket (“Mexico”). Yet according to the OECD, Mexico still has large amounts
of inequality and poverty rates (“Economic Survey of Mexico 2015"). This demonstrates that the
country has the means of providing for all its citizens but the way in which the wealth is
distributed is currently unpromising to their development initiatives. It is time for Mexico to
clean up their act and spread the riches with the rest of the nation if they hope to see
improvements in the country. With implementations of improved labor laws, regulatory
frameworks and bigger investments in human and physical capital, Mexico will be able to
provide a better environment for its citizens who will in turn become more productive (O’Neil).
The biggest obstacle would definitely in combating crime rate but through attaining economic
and social equality, there is a possibility of straying people away from illegal activities by
providing them with alternative means to achieving a desirable lifestyle.
My first recommendation includes giving local entrepreneurs the opportunity to receive
bank loans to start businesses, create more jobs and stimulate growth. Second is to develop laws
to control monopolies, worker rights and employee standards, so that profit is allocated fairly and
employees are making enough to spend on essential and non-essential items. Third, is to
implement tighter monitoring system of illegal activities and corruption to ensure that only
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productive employment is being pursued. A consideration in all these factors should allow for
more economic and social equality. Finally more investment should be made in infrastructures
and public services such as health care and education, to not only foster happier productivity but
also to enact patriotism. For at the end of the day, Mexican citizens need to feel proud of their
accomplishments and the country they have built up together so that they can keep joining efforts
in this battle to becoming a developed nation.
Works Cited
Grant, Will. "Mexico Rising." The Documentary. Prod. Sarah Parker. BBC World Service. N.d.
Web. 26 Jan. 2015.
O'Neil, Shannon K. "Mexico: Development and Democracy at a Crossroads." Council on
Foreign Relations. Council on Foreign Relations, n.d. Web. 26 Jan. 2015.
"Economic Survey of Mexico 2015." OECD. N.p., n.d. Web. 27 Jan. 2015.
"Mexico." The World Bank. N.p., n.d. Web. 25 Jan. 2015.
The World Factbook. Central Intelligence Agency, n.d. Web. 27 Jan. 2015.