Tom Keene Talks to Mexico Expert Shannon O'Neil
Why is Mexico doing so well economically despite the horror of the drug war?
We really don’t hear a lot about the good fundamentals that are happening in Mexico. According to the World Bank and others, it’s one of the best places to do business in Latin America and indeed around the world. It has a strong open market, it has good macroeconomic policies. And it has close ties to the U.S. through supply chains of big, international companies, as well as medium and small companies.
And this is separate from all the drug violence—50,000 killed over the past five years.
You have these two very different trends. One is worrisome security in particular areas of the country—not all over the country. But on the other side you’re seeing quite strong economic growth in manufacturing and services that are leading to 3½ to 4 percent growth.
How is the middle class doing?
The growth of Mexico’s middle class is one of the big untold stories of the last 15 or 20 years. You see much better-constructed houses that middle-class families are living in. And you’re also seeing just a huge growth in the diversity of jobs that they do. Before, say in the 1970s and 1980s, Mexico’s middle class were really public sector employees. Today they do all sorts of things that are really driven by the private sector.