Adriana Zehbrauskas for The New York Times
Mexico is attracting more
global investment in autos, aerospace and household goods. General
Electric has an office in Querétaro.
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 this 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, 2012.
“Chrysler, for example, is using
Mexico as a base to supply some of its Fiat 500s
to the Chinese market.” What struck me most here in Monterrey, though,
is the number of tech start-ups that are emerging from Mexico’s young
population — 50 percent 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 Web site 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 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 a win-win. It makes U.S. 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. We do $1.5
billion a day in trade with Mexico, and we spend $1 billion a day in
Afghanistan. Not smart.
We need a more nuanced view of Mexico. While touring the Center for
Agrobiotechnology at Monterrey Tech, Mexico’s M.I.T., its director, Guy
Cardineau, an American 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 U.S. military said he couldn’t come because of the [State
Department] travel advisory here. I thought that was very ironic.”
Especially when U.S. companies are expanding here, which is one
reason Mexico grew last year at 3.9 percent, and foreign direct
investment in Monterrey hit record highs.
“Twenty years ago, most Mexican companies were not global,” explained
Blanca Treviño, the president and founder of Softtek, one of Mexico’s
leading I.T. service providers. They focused on the domestic market and
cheap labor for the U.S. “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,” a k a “Pact for
Mexico,” under the new president, Enrique Peña 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 have 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 United States’ — no longer. We
always thought we should have the government work like the United
States’ — no longer.”
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