Mexico's Economic Growth
By David Henderson
In the United States, the image of Mexico is abysmal and largely wrong. The average American seems to believe that Mexico is a destitute, quasi-socialist nation with rampant drug violence that is sending waves of illegal immigrants to the United States.
This is from Ivan Eland, “The U.S. Should Take Lessons from Mexico,” June 20, 2012.
I found that first paragraph arresting. I realized that I’m one of those average Americans. But Eland goes on:
More important, the bad publicity on the drug death toll has unnecessarily dispirited even Mexicans and eclipsed Mexico’s economic success story. Brazil, billed as an engine for Latin American economic growth, has also overshadowed the equally middle-income Mexico. Yet in 2011, the relatively open Mexican economy, which has increased competitiveness, outgrew its Brazilian counterpart, dominated by large state-owned industries, 3.9% to 2.7% and is expected to maintain that gap in 2012. Whereas Brazil, like the United States, has debt-burdened consumers, Mexico has had manageable debt, low inflation, 17 years of macroeconomic tranquility, and thus investors in the automobile, aerospace, and electronics sectors banging down the door to get into the country.
Mexico’s most-recent annual growth rate (the chart doesn’t make clear, but I think it’s in real terms) is 4.6 percent. Not bad.
Mexico’s rating on the Economic Freedom scale? 75th. That accords with my prior views. Which makes its growth rate somewhat surprising.