Located between 3rd and 16th in remittances, tourism, population, territory and economy, Mexico finishes in 163rd in equality for income distribution and with a rule of law without justice, security, peace, or strong citizen democracy.
According to the 2020 Population and Housing Census, 126 million 014 thousand 024 people live in Mexico. Compared to other countries, Mexico is installed in 11th place among the most populous nations in the world (right between Japan and Ethiopia).
Mexico ceased to be one of the fifteen largest economies in the world at some point in 2021. This fact deserves attention and has gone almost unnoticed. We were the 12th largest economy in the first decade of this century. We moved to 13 and 14 in the second decade and now we are at number 16 (2022), as well as ranked among the 25 most insecure countries.
Tourism, incentive and strength
To a great extent, we Mexicans live off foreigners visiting us. In tourism, we are seventh in the world (7% of GDP), but we also support ourselves from emigrating abroad and working where they pay us more for our services.
We are the third place in the world in receiving remittances (4% of GDP). We make a living thanks to unpaid work, basically female, which provides: domestic work, food preparation, various care, and other services. Added together they represent 20% of GDP.
Mexico contains a territory close to two million km2 of surface, which gives it the fourteenth place among all nations: enough space to contain within itself up to 23 of the 48 European countries.
Quality of life, competitiveness and other indicators
But then we drop to 34th place on the Quality of Life index. The eleven factors analyzed by the Organization for Economic Cooperation and Development (OECD) to qualify all its member countries to end up questioning our well-being, along with countries like Turkey.
A similar situation occurs with the calculation to measure the quality of death in which we are in position 43. Unlike the quality of life index, its complement classifies nations based on their provision of palliative care, access to treatment analgesics, public policies and funds for the terminally ill, as well as individual and community perceptions about death.
The country goes down another rung to rank 51st to 55th in the 2021 Global Competitiveness Index and Global Innovation Index. Innovation ranks just below that of Serbia, in 54th place, above Costa Rica (in 56th place), and Brazil (57th). In 2020, Mexico was ranked 55 out of 131 while in 2018 it was 56 out of 126.
The Social Progress Imperative initiative presented the results of the 2020 Social Progress Index. In this edition, Mexico was ranked 62 out of 163 countries, with a score of 73.52 points, a number slightly higher than the one obtained in 2019 (73.14 points). Social Progress, without a doubt, represents a pending agenda to be addressed in order to level the living conditions of Mexicans, particularly among the southern states.
Now, if we order the countries according to their environmental performance, Mexico is number 72. In the Human Development Index, it is in 76th place in the world ranking (with an HDI of 0.751).
We are down further and still not bottoming out in the 2021 Democratic Index. The democratic development index in its specialized magazine placed Mexico in seat 86 of 167; determined that the country’s democratic index has fallen year after year since 2010, going from 6.93 to 5.57, and entering the category of hybrid regime. Within the country, we have the best examples of democracy in the states of Yucatan, Baja California Sur, and Aguascalientes.
Rule of law
While the rule of law weakened globally for the fourth year in a row, according to the World Justice Project’s (WJP) Rule of Law Index 2021, the dimensions with the greatest declines included limits on government power, civic space, speed of justice, and non-discrimination.
Unfortunately, Mexico is in 27th place out of 32 countries in the Latin American and Caribbean region, as well as in the 113th position out of 139 countries worldwide. It ranks 140th out of 163 countries in Peace and Security ( Global Peace Index 2021).
Finally, Mexico exhibits the worst of its faces in terms of equity. The Gini coefficient is the most widely used method for measuring wage inequality. This analytical tool is usually used to measure the concentration of income among the inhabitants of a region, in a given period of time.
The lower the coefficient, the better the distribution of income, as is the case of Ukraine with 0.25 (it is number 1) as opposed to South Africa with 0.63 (place 163). Mexico presents 0.48 points, which places it as a highly unequal country (138th place in equality).
Mexico is a country of contrasts: located between 3rd and 16th in remittances, tourism, population, territory and economy, it finishes in 163rd in equality for income distribution and with a rule of law without justice, security, peace or strengthened citizen democracy.
Dangers for the rule of law in the region
The report indicates that, beyond the pandemic, AML presents structural conditions that hinder the flow of capital from abroad: Mexico is one of the emblematic cases, with its president Andrés Manuel López Obrador at odds with key institutions; episodes of political instability in Peru or Ecuador; Argentina, with price controls and default on debts; problems with drug trafficking and security in Honduras and Guatemala, among others.
Similarly, a new electoral cycle is looming in a polarized Brazil; in Colombia, the polls are led by a former guerrilla. Uncertainty remains at high levels and the rule of law is not going through its best moment in the region.
Likewise, the International Monetary Fund (IMF) has estimated that the region will be the hardest hit by inflation in 2021 — which would reach an average of 9.3%, the highest globally — .
A higher price rise will introduce new complexities to the performance of economies and the management of governments in 2022. For example, Argentina, Brazil, Mexico, Peru and Chile face the highest inflation in ten years. By affecting, among others, food and basic services, this constitutes a new source of social unrest.
10 risks for Mexico
In this context, the ten main political risks that Integralia Consultores perceives for Mexico are:
- The president intensifies his policy of mobilization and polarization.
- Attacks against the National Electoral Institute are intensifying.
- Organized crime actively interferes in the 2022 electoral process.
- The risk of concentration of power increases due to Morena’s victory in most of the governorships in dispute in 2022.
- The discussion of the electrical reform is extended.
- High rates of homicide, extortion and robbery remain; organized crime groups are strengthened.
- The increase in the number of powers, responsibilities and budgets (unrelated to national security) assigned to the Armed Forces continues.
- Fragile public finances prevail.
- The inexperience of the new head of the Bank of Mexico calls into question the institution’s ability to respond.
- The probability of cooptation of members of the SCJN is increased; pressure and attacks on the Judiciary are increasing.
The democratic development of Mexico was seriously affected in 2021, caused by the pandemic (and its consequences, such as poverty), but also by violence, impunity, corruption, and social polarization, according to the results of the Index of Democratic Development of Mexico 2021 (IDD-Mex).
The report, carried out by the National Electoral Institute (INE) in collaboration with the Center for Political and Social Studies (CEPOS ), the Social Union of Entrepreneurs of Mexico (USEM) , the Konrad Adenauer Stiftung Foundation (KAS) Mexico and PoliLat, highlighted that the national average of the index in this edition was 4,138 points, on a scale of zero to 10,000 points. This figure represents a drop of 24% compared to the previous year (when the value was 5,434 points).
States versus the Democratic Index
According to the study, in Mexico social and economic development regressed, citizen democracy fell. In the northern and central regions of the country, the negative results were concentrated and the COVID-19 pandemic showed how weakened institutional quality is.
The results of the 2021 Index, in its state variations, showed that only seven entities in our country improved their score compared to the previous year. Only two (Yucatán and Hidalgo) qualified with a high level of development.
The IDD 2021 referred that our country is between two extreme realities: that of Yucatan, which has obtained the highest average of the index for five consecutive years, and, on the other hand, Guerrero, an entity with the minimum development for six consecutive years.
« Renovate with Growth, some Latin American and Caribbean countries «
The World Bank recognizes the importance of non-economic measures of prosperity, including access to electricity, clean water, health, education, and nutrition; protection of the environment, biodiversity, and resilience to climate change; and connectivity with people, information, and financial services.
In his recent report, “Renovate with Growth, some Latin American and Caribbean countries” , he argues that some LAC countries have solid capacities in this area, but also shortcomings (particularly in the areas of political effectiveness and infrastructure).
For long-term growth, LAC needs an enabling environment for entrepreneurship to spread. In many countries, it is important to address distortions induced by state ownership.
Foreign direct investment can play an important role in improving competition and productivity. The LAC region has a great opportunity after the pandemic to expand trade through more dynamic global value chains. In general, and to a large extent, political efficacy is lacking in Mexico.
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Source: liderempresarial.com, elceo.com