Navigating Mexico: In a World of 8 Billion

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Supposedly, sometime in July 2022, a baby was born and became the eighth billion member of the living human family.

The planet’s population has doubled in 48 years. Quite an accomplishment.

So the question might be, what is Mexico’s place in a global community of 8 billion people?

The answer is tricky because there are many Mexicos, each very much alive in its own current society.

Pre-Columbian proud Aztec Mexico is about 10,000 years old.

Dating from the arrival of Hernán Cortés, colonial Mexico, with taints of Europe, is about 500 years old.

If we look as Mexico, independent of Spain, we are talking about a country that is roughly 215 years old.

The begrudged Mexico, having lost about half of its territory to the United States, is
about 175 years old.

And then there is “modern” Mexico, born after its revolution, reducing the power of the Catholic Church, creating a public school system, secular cemeteries and birth certificates. That Mexico is only 110 years old.

Mexico’s first civilian president was only 80 years ago, making it a “young” democracy in the world of its current leftist National Regeneration Movement (Morena) party government, only four years in power.

As Mexico and its people continue to define who they are, certain realities superimpose themselves, independent of which party holds or maintains office.

Every six years, there is an illusion of or almost tangible new-things-on-
the-horizon mentality in Mexico and the country fires itself up for its presidential elections.

Those realities are the statistical data points, the ones to which candidates never seem to come to grips.

Mexico’s federal government funds the National Institute of Statistics and Geography (Inegi) to the tune of 7.7 billion pesos a year, which, for its population of 129 million
inhabitants, would be about 60 pesos for each Mexican — not a bad amount to have accurate statistics. The Inegi carefully chronicles the country’s past and future.

That said, many people in Mexico consider the Inegi’s statistics to be overly conservative, favoring current federal positions and priorities. As the old expression by economist Ronald Coarse warns, “Torture the data and it will confess to anything.”

Luckily, in a global world, outside statistics from the World Bank and the International Monetary Fund provide for some counterbalance.

These statistical realities seem to take the upper hand in the yes of most international and national analysts, as much as government authorities or slick consumer marketing spinners try to paint a different picture.

Over the last three decades, Mexico has underperformed in terms of growth, inclusion and poverty reduction compared to similar countries. Its economic growth averaged just above 2 percent a year between 1980 and 2018, limiting progress, independent of the many political parties in power during what would constitute about seven Mexican presidencies.

Currently, the “post-covid” economy shows Mexico with nearly a 10 percent inflation rate and negative overall growth by the end of this year.

And extreme poverty has actually increased under the current left-leaning government.

In 2020, Mexico suffered its worst economic contraction since the Great Depression.

Aggregate output has shrunk by 8.5 percent.

Between 2018 and 2020, at least 3.8 million people fell into poverty. That brought the
poverty rate to almost 44 percent by March, 2022.

And under the current administration, poverty in Mexico has no government safety nets, unemployment insurance, food stamps for needy families or head-start programs.

Debt per-person remains extremely high, due to loans from international development banks, whose annual interest payments alone eat away nearly 20 percent of Mexico’s annual operating budget.

While Mexico defaulted on its international debt once, in 1982, Venezuela has done so 10 times, leading to inflation levels that reached the million percentage point.

Obviously, then, defaulting is not the path forward to economic prosperity, even if the administration occasionally threatened to do so.

Fertility is down to two births per woman, but is coupled with staggering teenage pregnancy rates.

In terms of murder rates, Mexico hovers around the 12thplace worldwide, right up there with South Africa, El Salvador and Nigeria.

The list could go on.

So what is the good news, or what is disguised as good news, in Mexico?

Mexico has changed, especially in terms of how it is typically viewed in the world.

A full 80 percent of the Mexican population now lives in urban areas, compared to 50 to 60 years ago, when the comparable figure was barely 20 percent.

Access to education, health care, internet are now the norm, rather than the exception.

Also, the median age is much older, at 29, with life expectancy to 75.

Population growth has tanked to a 1-percent annual level.

And then we must remember Mexico’s love-hate relationship with its neighbor to the north.  Some 11 million Mexican citizens — a full 8.5 percent of the total population — live in the United States, and while Mexico’s GDP has contracted, remittances from abroad are at a record high, a whopping 4 percent of the GDP of Mexico’s economy, (To provide some context to this massive dimension, that is actually higher than all of agriculture in Mexico, contributing 3.2 percent of the GDP in 2020.)

So where will Mexico be in this new world order of 8 billion people? And more importantly, will Mexico plan for its new reality?

This “new” Mexico will be older, decidedly urban, less associated with traditional religions, with fewer long-term marriages, a zero-growth population, and it may actually need “cheap labor” from migrants from its southern borders.

Mexico’s economy, as a dichotomy among the 15 largest in the world, unfortunately, will be a de facto zero-growth one for the next few years, due to many factors, one being that in the fourth quarter of 2021, its informal work force was a dreg on the overall economy. Informal workers who do not pay taxes, do not access health care, are not contributing to any retirement programs, are not accumulating credits for home constructions or mortgages. And in the last few years, Mexico’s informal economy increased to 56 percent of the country’s labor force.

While Mexico prefers not be considered a third world country, it definitely has certain
technical indicators that would designate it as such.

This “new” Mexico will look much like the old Mexico: a country of haves and have-nots, and the have-nots have been growing. The have-nots get a few very well-crafted and publicized scraps from federal social programs, and are paid another token sum of pesos every three years for their vote to keep whatever political party happens to be in vogue in power.

On a more positive note, in the past 30 years, Mexico has emerged as a manufacturing economy through a series of free-trade agreements and renegotiations with the United States, Canada and 44 other countries.

Many major U.S. manufacturers have integrated supply chains with counterparts or operations in Mexico.

Mexico’s level of industry and manufacturing is now at 32 percent of its GDP, and covid-related supply chain interruptions have pushed the United States and Canada to see Mexico as a viable partner.

A clear danger of the future is greater access to information, as well as misinformation, pushing the country to be decidedly more polarized, into a sometimes shrill-volume level us-versus-them mindset and contest, often using a false sense of nationalism and a fractured national-ego as the catalyst for these media cycles and tirades.

As some other countries seem to progress, or so it seems looking out, coupled with the strong messages from media and marketing that Mexico is on the same course, the numbers seem to paint a very different picture.

Maybe this final thought will help: Mexicans have had to be chameleons to survive.

Science teaches that adaptability is the strongest evolutionary trait. So even if the statistical forecast is bleak, Mexico will no doubt survive, adapt and magically flourish as it has done for the past 5,000 years, as well as the last 100 years. This is something that is somehow buried deep in Mexico’s DNA.

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