Mexico: Export Growth Failure?
Fidel Aroche Reyes
PhD and Professor of Economics
UNAM
The discussion on the state of the Mexican economy has ceased to matter in general policy discussions within the country and is not the subject of international conferences. There is a tacit agreement among academia, different actors, and political sectors that maintaining an inflation rate and fiscal deficit at "acceptable" levels matters. Nothing more. The private sector does its business as best it can, and public spending goes to pay current expenses and maintain the various cash transfer programmes to multiple population groups to support consumption. The state develops isolated projects to build infrastructure and meet energy demand. Still, they are not contemplated within any economic dimension, because a free-market vision prevails, i.e. it would be better if they did not affect anything or anyone. The figures for growth or employment generation have ceased to matter, yet they have been terrible for years. The general perception is that Mexico has no economic problems. The data, on the other hand, are dramatic. The World Bank's GDP per capita measured in LCU shows that between 1981 and 2023 GDP per capita has grown by 15%, an average of just over 0.1% per year. It explains the massive emigration. On the other hand, exports of goods and services increased from 9.9% of GDP in 1981 to 36% in 2023.
Some mention facts such as the poverty that afflicts half of the population or emigration, but these phenomena do not have an economic dimension or explanation either; they are isolated issues for which there is no solution because, in reality, they are not problems (and even less economic problems). Recently, analysts have debated whether the policies of Mexico's largest trading partner will impact the country. Still, no one identifies the national economy as the source of current or potential events. They are all facts of life, without explanation or solution or relation to anything.
Policymakers view migration from a monetary perspective as support for the balance of payments and exchange rate stability. The human misery and precariousness of migrants, the racism, violence and gunshot deaths in the hands of white supremacists and poor whites are not an issue because it is family support that matters. The other side of financing the balance of payments is support for low-income families in this analysis. The problem has worsened since 1994 (see graph).
Source: https://www.gob.mx/cms/uploads/attachment/file/979526/Anuario_Migracion_...
Looking at Mexico from another perspective, the current state of affairs is not a permanent condition, but the historical result of a set of decisions taken by society as a whole in the face of specific circumstances. Therefore, our circumstances are not natural and are susceptible to change. In other words, the economic system functions on a daily basis that clearly does not meet the needs of the population. However, this also means that change is possible, and there seems to be no connection between one and the other.
The Mexican economy has hardly grown in the last 43 years, which is no small period in terms of a human lifetime. In 1982, the year that inaugurated the period of stagnation, the economy was still underdeveloped and had all sorts of problems. In 1982, policymakers saw such issues as solvable. If an underdeveloped economy has not grown for 43 years, this condition will continue and worsen. In short, Mexico is an underdeveloped country whose economy is not growing, but this is neither natural nor the only solution.
In the 1950s, underdevelopment was characterised as a syndrome, a set of interrelated ills, of which low incomes were only a symptom. However, it was theoretically possible to solve underdevelopment and allow the economic system to provide the population with high levels of well-being. There are recent and distant examples of countries that have emerged from underdevelopment. In all these examples, society took the initiative, and the state was active. This highlights the crucial role of societal initiative in economic development, empowering us to take responsibility for our economic future.
For at least ten decades before 1982, the Mexican economy grew and overcame some features and symptoms of underdevelopment. During those ten decades of growth, Mexican society was convinced that widespread welfare for the population, along with technological, financial, economic, and political autonomy, was possible. Society recognised itself as capable of achieving common goals because achieving development benefits each individual. Over the last 43 years, Mexican society has abandoned its vocation for the general welfare of the population.
