Believe It or Not — Mexico Is Flying
November 19th, 2012
The news from Mexico is bleak — that is, the news reported to U.S. newspaper and website readers. Drug murders, beheadings and kidnappings rule the headlines. Occasionally, an earthquake sneaks through, just for variety. But Mexico’s economy deserves a few stories, too. Mexico’s GDP has been galloping along at an enviable 3.5 percent growth pace, and its budget deficit is just 2.4 percent of GDP (that includes massive infrastructure investment in oil producer Pemex.) Mexico, unlike the U.S., has been smart enough to issue 100-year bonds to lock in low rates.
Mexico has also recovered from a terrible fright– the fear that low-wage China would steal away all of its manufacturing, As Chinese wages have jumped, Mexico’s fear has receded. Global companies like Bombardier, GE, and Cessna have committed to expand factories. The new Learjet 85 will be built in “Aerospace Valley,” outside of Mexico City.
Economic policy has been prudent and bold. Mexico has been more aggressive than the U.S. in signing free-trade agreements, from Japan to the EU to Israel. The Congress just passed a crucial labor reform bill making it easier for employers to hire and fire workers, rather than keeping them locked in limbo. Mexico means business in a way it hasn’t for decades.
I recently spoke at the 10th Annual Mexican Business Congress in Queretaro, sharing a sofa for a panel discussion with entrepreneur and corporate titan Ricardo Salinas. I told the audience that I fully understood why we were together on the sofa. He’s on the Forbes list of wealthiest men in the world ($17.5 billion). And I’m on the Forbes list of subscribers.