We Need A Change of Economic Paradigm in Mexico

moneyMexico is right now one of the most promising economies in the world. With a historical demographic bonus, natural resources and a stable economy, Mexico is on its way to a constant growth that will place us as one of the most attractive countries for foreign investment.  However, despite its attractive and potential, Mexico is still dealing with a huge economic inequality and has an enormous population still in poverty.

Mexico has been, for many years, a manufacturing country offering cheap but qualified labor force for foreign companies. Industry has been developed in such a way that Mexico’s manufacturing industry is in no way behind those in many developed countries. But do we want to continue being only the processing hub for someone else´s added value and continue to promote our qualified labor because of its low cost? Or is it perhaps time for us to have our own innovation market, focusing more on creating our own products and exporting value, instead of just relying on cheap labor force.

From automotive industry, to aeronautics, Mexico has grown in knowledge about the production of the latest technology. Along with industry, it has also grown into perfecting the legal framework needed for its rising external trade, and the barriers for Mexican business have decreased as entrepreneurs´ confidence increase to explore foreign markets. But when we look at what they are exporting, we see that the most popular products are things such as avocado (our agriculture) or refrigerators (our manufacture) but we don´t see much about our innovation and creativity or our own Research & Development. After all these years and the upgrade in our labor competitiveness, Mexico is still not exporting unique products nor finding ways to satisfy the new needs and markets.

At the same time, while having an industry with a potential to be as competitive as any other worldwide, we still have problems of the least developed countries. Poverty is not a small stone in our shoe, millions of individuals wonder everyday if they will have anything in their stomachs to make it for the day. With little access to education, this big population is far from escalating the economic ladder. Food security is still a daily concern in a country with abundant natural resources.

However, while other countries such as China start to create their own added value and increase some production costs, a country such as Mexico celebrates the return of foreign investment attracted by cheap labor only.

Statistics indicate that even though there has been more employment, workers are earning even less than in previous years. It seems as if the difference between economic growth and economic development wasn´t that significant for a country more concerned about positioning its market as an attractive destination for foreign companies than about granting its people a dignified life.

It is time to move from what we know and start exploring new ways for development. In a more inclusive society, it is up to the private sector to take the lead on breaking the current paradigm and build an economy based on social and economic responsibility where workers are no longer seen as just cheap labor but as individuals looking for their own way to transcendence.

By Jessica Baptista, Regional Director of World Youth Alliance Latin America.