NY Times' Thomas Friedman's Surprising New Column On Mexico

Robert:



Thomas Friedman, New York Times columnist, on Mexico's macro-economic future:


In India, people ask you about China, and in China, people ask you about
India: which country will become the more dominant economic power in the
21st century? I now have the answer: Mexico.

Impossible, you say? Well, yes, Mexico with only about 110 million people
could never rival China or India in total economic clout. But here's what
I've learned from a visit to Mexico's industrial/innovation center in
Monterrey. Everything you've read about Mexico is true: drug cartels, crime
syndicates, government corruption and weak rule of law hobble the nation.
But that's half the story.

The reality is that Mexico today is more like a crazy blend of the movies
No Country for Old Men and The Social Network.

Something happened here. It's as if Mexicans subconsciously decided that
their drug-related violence is a condition to be lived with and combated,
but not something to define them any longer.

Mexico has signed 44 free-trade agreements -- more than any country in the
world -- which, according to The Financial Times, is more than twice as
many as China and four times more than Brazil. Mexico has also greatly
increased the number of engineers and skilled laborers graduating from its
schools.

Put all that together with massive cheap natural gas finds and rising wage
and transportation costs in China, and it is no surprise that Mexico now is
taking manufacturing market share back from Asia and attracting more global
investment than ever in autos, aerospace and household goods.

"Today, Mexico exports more manufactured products than the rest of Latin
America put together," The Financial Times reported on Sept 19 last year.

"Chrysler is using Mexico as a base to supply some of its Fiat 500s to the
Chinese market."

What struck me most in Monterrey, though, is the number of tech start-ups
that are emerging from Mexico's young population -- 50 per cent of the
country is under 29 -- thanks to cheap, open source innovation tools and
cloud computing.

"Mexico did not waste its crisis," remarked Patrick Kane Zambrano, director
of the Center for Citizen Integration, referring to the fact that when
Mexican companies lost out to China in the 1990s, they had no choice but to
get more productive.

Zambrano's website embodies the youthful zest here for using technology to
both innovate and stimulate social activism. The center aggregates Twitter
messages from citizens about everything from broken streetlights to
"situations of risk" and plots them in real-time on a phone app map of
Monterrey that warns residents what streets to avoid, alerts the police to
shootings and counts in days or hours how quickly public officials fix the
problems.

"It sets pressure points to force change," the center's president, Bernardo
Bichara, told me. "Once a citizen feels he is not powerless, he can aspire
for more change. First, the Web democratized commerce, and then it
democratized media, and now it is democratizing democracy."

If United States Secretary of State John Kerry is looking for a new agenda,
he might want to focus on forging closer integration with Mexico rather
than beating his head against the rocks of Israel, Palestine, Afghanistan
or Syria.

Better integration of Mexico's manufacturing and innovation prowess into
America's is win-win. It makes US companies more profitable and
competitive, so they can expand at home and abroad, and it gives Mexicans a
reason to stay home and reduces violence. The US does US$1.5 billion
(RM4.65 billion) a day in trade with Mexico, and spends US$1 billion a day
in Afghanistan. Not smart.

We need a more nuanced view of Mexico. While touring the Center for
Agrobio technology at Monterrey Tech, Mexico's Massachusetts Institute of
Technology, its director, Guy Cardineau, a scientist from Arizona, remarked
to me that, in 2011, "my son-in-law returned from a tour of duty in
Afghanistan and we talked about having him come down and visit for
Christmas.

But he told me the US military said he couldn't come because of the (State
Department) travel advisory here. I thought that was very ironic".

Especially when US companies are expanding here, which is one reason Mexico
grew last year at 3.9 per cent and foreign direct investment hit record
highs.

"Twenty years ago, most Mexican companies were not global," explained
Blanca Trevino, the president and founder of Softtek, one of Mexico's
leading IT service providers. They focused on the domestic market and cheap
labour for the US. "Today, we understand that we have to compete globally"
and that means "becoming efficient.

"We have a (software) development center in Wuxi, China. But we are more
efficient now in doing the same business from our center in Aguascalientes
(Mexico) than we are from our center in Wuxi."

  Mexico still has huge governance problems to fix, but what's interesting
is that, after 15 years of political paralysis, Mexico's three major
political parties have just signed "a grand bargain", aka "Pact for
Mexico", under the new president, Enrique Pena Nieto, to work together to
fight the big energy, telecom and teacher monopolies that have held Mexico
back. If they succeed, maybe Mexico will teach us something about
democracy.

Mexicans had started to wonder about America lately, said Bichara from the
Center for Citizen Integration.

"We always thought we should have our parties behave like the US'  -- no
longer. We always thought we should have the government work like the
S'  -- no longer."  NYT