If you’re looking for in-depth and level-headed news coverage, it’s hard to beat the Economist. There was a great article in the August 27 issue on Mexico’s economy, with a look at what’s going right there and how their roller coaster ride compares to that of red-hot Brazil. Read the full article here online.
There are all kinds of interesting tidbits about Mexico in there, from its overpriced monopoly telephone system (see the graph here) to its current trend of stealing manufacturing business back from China as wages in the latter keep rising. What’s most interesting to me is its comparison to Brazil, the current poster child for developing economy growth, but a country plagued with very serious problems. Here are some examples.
- Brazil, which is less dependent on business with the United States, has grown to double the size in GDP of Mexico (now #2) in just 10 years.
- Mexico did $400 billion of business with the U.S. last year, behind only Canada and China.
- The World Bank says Mexico is the easiest place to do business in Latin America (and is ahead of Spain). Their schools are also ranked the highest in Latin America.
- Despite all the attention on the drug war in Mexico, Brazil actually has a higher murder rate and the violence is less concentrated in one region. In Mexico’s Yucatan state, the homicide rate is on par with Belgium.
- The richest man in the world, Carlos Slim, is Mexican. Last year his worth rose by $20.5 billion. (A monopoly knows no recession, apparently.)
So what does the future hold? From a tourism standpoint, Mexico is in better shape than Brazil, despite all the bad publicity. There’s no reciprocal visa fee, it’s cheaper than Canada and the U.S. for hotels and restaurants, whereas Brazil is now more expensive, and flight connections are both easy and reasonably priced. The World Cup and Olympics are coming to Brazil though, so all bets are off then. Price sensitivity will fly out the window.