Mexico is no longer the backward, economically retrograde country that many people may still believe it to be. The Mexican economy has made many advances that have changed face of the country in significant ways since the signing of the NAFTA in 1994.
The time has come to update the old vision of Mexico as the land of tequila and siestas. The Mexican economy, more and more, is one that is driven by a skilled, hard working labor base that, because of its diligence, is the beneficiary of the country’s steadily growing prosperity.
The well-research firm, Boston Consulting Group (BCG), projects that within the next half a decade increased exports from Mexican producers and foreign-based companies operating in Mexico will add somewhere between twenty billion and sixty billion dollars in additional export value to the Mexican economy.
The leadership of Mexico has also pursued a visionary course of negotiating free trade agreements with forty-four separate nations since it signed its first accord with the United States and Canada just about two decades ago. Mexico is increasingly becoming successful in attracting non-North American capital investment in Mexican manufacturing due to its proximity to the United States, and due to its position as the hemisphere’s foremost export platform. Although almost three-quarters of the three hundred and seventy-one dollars worth of exports that Mexico shipped from its shores in 2012 had the U.S. as their destination, the free trade agreements that are in place will enable the Mexican economy to diversify its client base.
The Boston Consulting Group firms asserts that the Mexican economy is “joined to the hip of our own (the USA’s)” This is demonstrated by the fact that U.S. factories and workers send four times the material inputs incorporated in Mexico’s finished goods than they did to China for items produced there.
Although Mexico is not without its problems, BCG, believes that Mexico will continue to grow its middle class (forty percent of Mexico’s population qualifies as such today). As the Mexican economy and its population’s purchasing power grows so will its appetite for American brands. This in turn, will benefit the U.S. and its workers.
If the country’s leadership continues to make the right moves, the Mexican economy will be open or business for quite some time.
The full original article can be read at Bloomberg Businessweek.