Is Mexico trailblazing a new development model for the world?

The uncomfortable truth experts and leaders are facing in these unprecedented times is that the theories and approaches we have been taught at school and in universities have become inadequate to address the challenges of our times. Established ways of doing things, from manufacturing and farming to building and planning our cities and towns, have given rise to a world that is not fit for future generations. Trust in our governments and financial institutions is at an all-time low and we find ourselves divided geo-politically, racially and socially. Our environment is choking on plastic and pollution, as we witness the degradation of our forests, oceans, rivers and soils.

Globalization has failed to deliver on its promises of peace and prosperity for all. While a billion people have been raised out of absolute poverty (moving from under a dollar per day to just over a dollar per day), poverty continues to grip the lives of billions of people around the world, in both high and low-income countries, and inequality and social injustice are at an all-time high. Right now, inflation is further deepening the inequality as assets prices rise while the average working person must choose between heat and food.

Since the Second World War we have arguably done three things wrong that led us to where we find ourselves today: First, we allowed our politicians to put corporations and finance at the center of their political attention because their success, we were told, meant the success of society at large. Second, we created a linear economy whereby all the material we produced is dumped or incinerated. Third, we exploited the environment with modern farming practices that benefit large-scale investors at the expense of soil health, biodiversity and ordinary farmers. Extractive mining practices have polluted towns and rivers and destroyed forests and eco-systems.

By focusing on the success of finance and corporations above all else, our politicians have created an extremely uneven playing-field. Ordinary citizens, farmers and investors find themselves competing with fund managers in Hong Kong, London and New York and the deep pockets of large multinational corporations in all lucrative markets: food & beverages, apparel & footwear, textiles and other fast-moving consumer goods, leaving the crumbs to ordinary business-owners while MBA graduates scramble to grow the next unicorn. Take tomatoes for example: A large investor double-clicking their way into the tomato business will look to buy the largest possible piece of land, maximize their yield with toxic chemicals designed to kill everything on the land except tomatoes, and sell tomatoes wrapped in plastic to supermarkets all over the world. This makes the tomato business unfeasible for most farmers, except the few who are targeting a tiny but growing niche in organic and ecological produce.

A similar story of taking lucrative markets away from ordinary people (micro-small and medium-sized, independently owned businesses) can be told for all the products we consume. A fund manager looking to enter the apparel and footwear market (as well as ordinary investors) will most likely manufacture in countries with cheap labor and lax environmental protection, leaving tiny niche artisanal markets for small independent manufacturers such as the handful of manufacturers left in the Scottish Highlands and in Nepal.

This does create opportunities for global entrepreneurs, but these so-called success stories are few and far between compared to the billions of people unable to produce or grow anything profitably in their regions, for their regions.

We are in the midst of a great reset to transform our cities and all sectors of our economy into low-carbon, zero-waste and environmentally friendly manufacturing plants and value chains, with a focus on NetZero. The danger however is that the response is driven by the same political agenda that created the problem in the first place: export-led development that allows large multinational corporations to dominate all markets, leaving few business opportunities for billions of people worldwide and further pushing farmers into debt, poverty, and bankruptcy, eventually pushing them to leave their land and move into cities that lack opportunities and/or public services.

Instead, we need to re-think our development model. Luckily an emerging solution goes with the grain of regional development, which seems to be popular today: developing inclusive, ecological, and circular regional economies. International trade and global interconnectedness can emerge from a regional focus rather than the other way round. Let’s take the food and beverage sector as an example.

Small entrepreneurs are developing applications and platforms that connect ordinary independent farmers with urban markets. Luckily (for the planet) the most profitable markets for smallholder farmers are organic and regional. This is because in these small but growing niche markets consumers are choosing organic, plastic-free, regional produce over globalized agricultural produce. Prices remain high, which makes these markets attractive to farmers, but prices and costs will fall as the market expands. But this cannot happen without two things: Consumer demand and government support.

Governments have been supporting large-scale monoculture agriculture since the mid 1900s. Today they must shift their attention to regenerative agriculture and the revival of small-scale organic and ecological farmers. The technologies for such a transition are accessible in sharing economies and lead to higher yields if managed well. Transition, however, is risky and takes time. This is exactly where industrial policy can support farmers in learning what works where and in accessing niche but growing regional organic markets.

While governments in most countries are turning their attention to greening energy and mobility on the road to NetZero, Mexico is taking a different approach.

The Mexican government led by its first progressive president, Lopez Obrador is transforming farming and markets in the Yucatán peninsula through its Sembrando Vida (Sowing Life) Program and the Tren Maya project, the iconic train connecting 19 stops around the peninsula with passenger (tourist and subsidized local prices) and freight trains.

Sembrando Vida invites smallholder farmers (with about six acres of land) to join the program and offers each farmer the equivalent of about US$250 per month basic income, capacity building and technical support for transitioning to regenerative, organic and ecological agriculture. This program includes one of the world’s largest and most ambitious reforestation programs, aiming to plant about 500 million trees, with a focus on farmers planting fruit trees for the short and medium term and high-value cedar and mahogany for long-term prosperity.

Sembrando Vida offers ordinary independent farmers and food & beverage manufacturers a shared brand which they can leverage to grow regional, ecological and organic markets in the peninsula. Tren Maya will facilitate the distribution of this agricultural produce around the region, while allowing migrant workers in tourist hot-spots to more frequently visit family back home elsewhere in the peninsula (a land the size of the UK). Hopefully tourists will choose to buy local organic produce rather than imported food and beverages as they do in Cancún.

The president’s approach to a great reset, what he calls the Cuarta Transformación (fourth transformation), is extremely popular amongst voters. On April 10th more than 90% of voters confirmed their approval for Lopez Obrador to complete his presidential term (which ends in 2024), and recently four out of six states voted for Lopez Obrador’s party in regional elections, further cementing his popularity.

Ask people who voted for Lopez Obrador why they want him to remain in power and a stream of policies rolls off the tongues of ordinary Mexicans, all pointing to policies that increase national self-sufficiency and support ordinary citizens: his public takeover of Mexico City’s new airport and deploying the army to get it built on time and under budget, the universal pension scheme, the rise in the minimum wage, the public sector construction of the Refinería Dos Bocas to cut dependence on imports of refined Mexican oil and of course, Sembrando Vida and the iconic Tren Maya in the Yucatán Peninsula; all this without turning to the International Monetary Fund or World Bank for loans.

There are contrasting opinions on the development of the Tren Maya including very legitimate concerns from indigenous peoples. The government however is adamant that the project will bring a different kind of development to the region, one that is inclusive, socially just and environmentally sustainable, respectful of Mayan culture and heritage, preserving and regenerating the vast and beautiful natural environment. Some sectors of civil society however are critical of the Tren Maya and some Mayan community leaders are deeply concerned that the train will perpetuate business-as-usual (spreading the Cancún-model of development to the rest of the peninsula.)

The vast majority of ordinary citizens, however, including indigenous Mayans, say they support the project because it will allow migrant workers to visit family elsewhere in the peninsula more often, it will increase demand for their small businesses (thanks to a projected increase in tourism) and facilitate moving their produce and products around the peninsula.

Amongst the most vocal critics is a campaign led by environmental activist groups and artists under the banner of #selvamedeltren, claiming that the train risks destroying the entire system of cenotes and caves as it crosses the path of underground rivers flowing to the coast in the section between Cancún and Tulum. Yet this apocalyptical perspective is not widely shared by ecological scientists and has been contested by members of Ejidos (community lands) who benefit from tourists visiting the caves (cenotes) on land where the train will pass through.

At the time of writing an Environmental Impact Assessment for this controversial segment of the train, Tramo 5 Sur, was released by the National Fund for Tourism (FONATUR), which directs the Tren Maya project, and has been under public consultation between May 23 and June 17. A public meeting on the EIA where diverse voices were heard was held on June 8.

A more legitimate concern is that the Cancún model of investment and development and associated poorly-managed urban sprawl will spread around the peninsula, allowing large multinational corporate and financial interests to extract a disproportionate share of value generated from tourism while causing pollution, environmental degradation and social segregation as it has done in Cancún. Tulum is a case in point.

Since 2008, land speculation has been endangering natural and protected areas. Despite large scale urban development programs, a great part of tourist-led developments is not in line with municipal planning laws and very few have environmental assessment plans. Even more concerning is that the predatory hotel development in the region brings enormous problems of water scarcity for Tulum residents while overloading urban infrastructure which cannot cope with the amount of solid waste and untreated wastewater produced and polluting the environment.

These issues will only get worse if the Tren Maya attracts more tourists to Tulum without careful planning and socially responsible investing. The risk is that these issues will plague many more towns and villages around the peninsula after the train is built. Municipalities like Tulum must use the opportunity of the train to capitalize on the imminent growth of their local economies in a way that resolves their challenges (such as access to water and basic services) and live up to their potential as beautiful places to live, work and visit.

The president and his government promise that the Tren Maya will unleash a new era of inclusive and sustainable development in the peninsula. But if this government wants to deliver on that promise, they need to enable municipal governments and local stakeholders to develop their own plans for dealing with the challenges of urban expansion in line with their own values and aspirations, consistent with a national shared vision for inclusive and sustainable development.

The good news for residents and their municipal governments is that for the first time in their lives they have a progressive government that intends to radically transform and reshape the future of Mexico through what the president calls the Cuarta Transformación (fourth transformation).

As the world focuses on climate change and the road to NetZero, with less attention on developing more resilient and regenerative food systems, Mexico seems to have developed its own innovative approach focusing primarily on food security and regenerative agriculture through its Sembrando Vida programme. The programme is ambitious and has a budget to match, $1.2 billion per year, again without the need to extend the begging bowl to the IMF or the World Bank.

Sembrando Vida is arguably what the whole world needs, support for ordinary farmers to transition to regenerative agriculture and import-substitution of food and beverages with locally produced organic produce to create food security in an increasingly fragile global marketplace that benefits the few and forces farmers off their land.

Mexico’s innovative approach is contagious. Mexico has pledged to support and part-fund the expansion of this program to its neighbors such as Guatemala. This is an exciting time for Latin America, with Mexico and its presidency playing a leadership role.

To be sure, this alternative development model is fraught with challenges. There is a huge risk that local governments will adopt or pursue their short-term business-as-usual approach to international capital, allowing investments in large-scale extraction projects such as megahotels in Cancún and the Vulcan Materials Company site (referred to as Calica) near Tulum which continues to devastate the forest for road construction material in Texas.

Mexican federal government and its agencies FONATUR, SEMARNAT, SEDATU, SEDENA (army engineers) and BIENESTAR (ministry of well-being) are determined to make it happen. It is perhaps time for the long-standing opposition to the Mexican state to engage rather than attack the Cuarta Transformación.

More people across organizations around the world are learning to align business models and practices with the needs of people and the environment. What is needed is an enabling regulatory environment and government policies to transition to a distinctly different type of economy that puts people and the environment first. The intention of the Mexican government and its numerous agencies is to do just that.

A new era of governance has emerged in Mexico. The road ahead is fraught with challenges and requires that all segments of Mexican society engage with a well-intentioned government and a very popular president. This is a space to watch for people all over the world who are deeply concerned about the future of our planet; how noteworthy that the transition to inclusive and ecological regional development is being led not by Western developed countries but by a developing country which until recently was considered as a lost cause. All eyes on Mexico leading the way to the great reset!

@najimakarem