Mexico: A Glass Half Full

Mexico: A Glass Half Full

This piece was created in collaboration with the Wilson Center. Andrew Selee is the Executive Vice President of the Woodrow Wilson Center and was the founding director of the Center’s Mexico Institute. Pablo Parás is the founding President of OPM, one of Mexico’s leading public opinion firms, and a frequent collaborator of the Wilson Center. The views expressed here are the authors’ own.

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Rethinking U.S. relations with Mexico has become a surprisingly popular theme in this year's presidential and congressional elections. Arguments about whether to build a wall on the border, revise trade deals, or deport unauthorized immigrants back to the country next door have inflamed passions and led to heated arguments between candidates and among the general public. Mexico was even the scene of perhaps the most improbable international visit by a presidential candidate in modern history, when Republican presidential contender Donald Trump made a surprise trip there in early September after roundly criticizing Mexico during much of his campaign.

In the debate over Mexico's relationship to the United States, two opposing ideas of the country next door frame candidates' and citizens' concerns. One sees Mexico as a weak neighbor, chronically poor, expelling its population northward in large numbers. The other sees Mexico as an increasingly successful country that has gradually claimed more and more American jobs by building increasingly modern manufacturing facilities and besting the United States in trade negotiations. It turns out that neither of these frameworks is completely right, simply because both are partial.

Priorities on the bilateral agenda also illustrate differences in how Mexico is perceived or how it wants to be positioned. While the north is preoccupied with job relocation, violence, and the rule of law, the south wants to talk about tourism and trade-related job creation; when one promotes beaches, the other responds with travel warnings. So the question lingers: Where does Mexico stand?

One way to tackle the question is to see where Mexico ranks in the global arena across a wide variety of topics. Such an overview gives us a holistic look at countries’ strengths and weaknesses. The chart above shows where Mexico ranks in 21 global indexes that cover several political, economic, and social indicators. For comparison, each value was adjusted to use a common scale (0 to 100 in this case). We believe that Mexico's story over the past two decades is one of a glass half full (or of a glass filling), rather than half empty, but clearly there are both impressive advances and persistent problems in the picture.

Advances

To begin with, Mexico is a country that has taken huge strides to overcome sluggish economic growth and build new sources of economic competitiveness. People are living longer, staying healthier, and learning more. Happiness indices usually show that Mexicans are among the happiest people in the world, perhaps enjoying the expanded opportunities they have today. But further progress will depend on dealing with poor educational quality, persistent inequality, and, perhaps most of all, weakness in the law enforcement, judicial, and regulatory institutions that give people certainty and protection.

The changes in Mexico over the past 20 years have given an important boost to the American economy. Economic development has slowed the flow of unauthorized immigrants crossing the border and has created an expanding consumer market south of the border that now receives almost 1 in every 6 U.S. exports (16 percent), making Mexico the second largest U.S. export market, following only Canada. Mexico's manufacturing base, rather than competing with America's, has become deeply integrated with that of the United States. Instead of manufacturing operations relocating overseas, companies that build cars, airplanes, refrigerators, and technological products have remained competitive in the global economy by building seamless production chains that span the two countries.

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The number of unauthorized Mexicans in the United States has actually dropped as more Mexicans return to their home country -- around 1 million from 2009 to 2014 according to the Pew Center -- than come to the United States each year, a sign of the country next door's increased vibrancy and economic health. Few Mexicans want to illegally cross the U.S. border these days, despite the intensity of the arguments around illegal immigration in this country. Even among legal immigrants, Mexicans have been surpassed by Chinese and Indian visa-seekers.

Problems

Yet not all is well south of the border. While educational attainment has expanded, the quality of instruction lags far behind, with Mexico ranked in the bottom quarter of the 65 countries surveyed annually by the Program for International Student Assessment (number 53 in the mean score for mathematics). While Mexico produces tens of thousands of highly qualified engineers each year -- and no shortage of highly trained scientists, business leaders, and medical doctors -- many Mexicans have limited access to high-quality education.

Inequality also stunts growth in Mexico. With a Gini Score of 48.2, Mexico remains among the most unequal countries in the distribution of wealth in the world -- though a bit below Brazil and not far above the United States (51.5 and 41.1 respectively). The very real gains in access to education and income have not been shared equitably throughout the population. Parts of Mexico, especially those areas linked to the global economy, increasingly resemble developed economies like the United States, with modern infrastructure, good schools, top-notch health care, and significant cell phone penetration and broadband access. Other parts of the country remain isolated from these trends. In these areas, people have few opportunities to advance other than to migrate -- even though they may now be migrating inside Mexico rather than to the United States.

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Perhaps of greatest concern, institutions supporting the rule of law remain weak -- everything from police, prosecutors, and courts, to regulatory agencies designed to ensure competition in key sectors of the economy. The most dramatic result of this weakness has been the spike in violence, most of it tied to organized crime and drug trafficking, that has shocked the country over the past decade. Mexico's homicide rate tripled between 2007 and 2011 before dropping noticeably over the past five years. It still remains far higher than it was two decades ago and shows no signs of dropping any further.

Corruption too remains endemic, with payoffs to individual public authorities for favors replacing fees and taxes that could benefit the public good. In this environment of weak institutions, businesses often hold off investments because they worry about corruption, about enforcing contracts, and about protecting their workers from crime. Many of these challenges pose a real threat to the quality of democracy as well as to Mexico's hope to become an economic powerhouse.

At the beginning of the current government in Mexico, all of the principal political parties agreed to move ahead on major reforms to tackle the country's biggest challenges. Several major pieces of legislation were passed and signed into law in 2013 and 2014. These included a constitutional change to allow private investment in energy; new standards to improve teaching; regulations to encourage competition in telecommunications; the establishment of an independent prosecutor's office; and an expansive transparency law to make government documents public. These were welcome developments, but it's too early to know how effective the reforms will be and whether they will be implemented as intended.

A more strategic dialogue

If Mexico does manage to tackle its remaining challenges over the next two decades and dramatically expands its growth rates, the benefits for the United States would be significant. As Mexico's economy grows, its citizens buy more U.S. products, and the two economies work even better together as a common production platform to export to the rest of the world. Now we are seeing the beginning of a new trend, as Mexican companies have begun to expand their manufacturing operations north of the border, making everything from auto parts and cement to bread, yogurt, and snack foods, in factories that employ American workers. Far from the vision of two competing economies -- or two completely dissimilar ones -- Mexico and the United States are increasingly similar and complementary countries, and they are likely to only grow closer in the coming years. The border region is a clear example of how interrelated both societies and economies are; a microcosm where some of the most important success stories and challenges to the relationship coexist.

Yes, Mexico should be a popular theme in everyday conversations and public debates in the United States, but the tone needs to change from threat to opportunity, from problematic neighbor to strategic partner. It is in the interest of the United States that Mexico experiences sustained and significant growth in the years to come and that both countries pursue a common agenda that takes full advantage of the opportunities of a better understanding and greater integration. Isn’t it time to change the narrative about our neighbor to the south? Viewing it as a glass half full can be a first step.

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