“What’s that Sound?” is a pretty good article written by Thomas L. Friedman about the Mexican economy.
It’s becoming a more and more apparent problem according to Friedman, that Mexico is losing it’s small corner of the American and world markets. “Will Rogers said it a long time ago: "Even if you're on the right track, you'll get run over if you just sit there." Mexico has put itself on the right track. But for the moment, it's just sitting there. If it doesn't start moving again, it's going to get run over by China, India, America — or all of the above.”
It seems Mexico hasn’t made the necessary upgrades to its country to be a formidable competitor in the world market. The Mexican Government has laid out a plan of action including five main “micro reforms” that will grease up the squeaky hinges of this country. In no particular order; Fix the Labor Markets, Tax Collection, the Judiciary System, the Constitution & Electoral System, and open the Energy & Electricity Markets to foreign markets. Sounds like the micro reforms aren’t so micro after all and what happened to education? Shouldn’t that be up there somewhere? I’ve talked to many friends that have lived in Mexico for years and according to them the education system is all but “Up-to-Par”.
The main reason that countries like China and India are working over Mexico is because of the highly educated human capital these countries are producing. Mexico has been trying however but not doing good enough to make the needed reforms. “While Mexico has upgraded its competitiveness, notes the analyst Daniel Rosen in the journal The International Economy, China upgraded worker education, infrastructure, management skills, technology and quality controls even faster.”
It sounds like Mexico needs to stop sitting on the track and start running full steam ahead or get run over!
3 comments:
I agree with C-Dizzle on the topic that Mexico needs to switch its reform priorities around. I feel that Mexico has placed very little emphasis on increasing its human capital. To me, human capital is the most important asset that a country and its economy can have. Even if they do accomplish all of their other tasks, without the people to keep the system going, it will be completely worthless. A country is only as good as the people that compose it.
I have heard the argument that Mexico has not capitalized on the great opportunity presented to it with NAFTA.
However, I also read something the other day that the Mexican government has figured this out and is going in the right direction according to the hard data (I'll see if I can remmeber where I saw this).
Keep in mind that China slso has an educational system which has huge problems at the bottom which will affect their economy in the future.
Spelling problems in MicahNay's comment.
Mexico definitely has problems with education and the accumulation of human capital. But, so does China.
WRT Rolf Tiblin's comment, the U.S. does not have the highest per capita real GDP. But, that depends a lot on how you deflate nominal GDP. Purchasing power parity methods put us closer to the top (but still behind places like Kuwait). One problem with this measure is that it is an average - which can be inflated by a few rich people at the top. A median would work better, but to my knowledge has never been calculated.
Post a Comment