The double face of Mexico: the economy grows, poverty remains

The Mexican dictator Porfirio Díaz, who died in his Parisian exile in 1915, left behind a phrase that is still frequently uttered today: “Poor Mexico, so far from God and so close to the United States.” Through that border marked by the Rio Grande, migrants, weapons and drugs — some of the main problems of both countries — cross from one side to the other. But there are also good economic news. Data from 2023 have filled this new year with optimism. The neighbors sometimes lend you the corkscrew and other times deny you your bread and butter. This year, it’s time to uncork the bottle.

The poor relations between the United States and China have had an unequivocal beneficiary. Mexico, with data up to last November, has practically surpassed the Asian giant in exports to the United States, its main trading partner, registering 439,000 million transactions, compared to 393,000 for China. In the same period, remittances from migrants in the U.S. to their families in Mexico exceeded the best forecasts, reaching $57.7 billion, and it is expected that when full figures for 2023 become available, the total amount will be close to $64 billion, a new record. Up with consumer spending. And there is more.

There is no country in the world where the word nearshoring has been searched more times on Google. Businessmen have the term for the relocation of companies to nearby countries to obtain greater performance thanks to cheaper labor engraved in their hearts, but word is also out on the street, and the government talks about it with pride. Foreign investment (from the U.S., that is) set another record of $32.9 billion between January and September, and although not everything is due to new companies but also to new money funneled into existing ones, the immediate future is linked to nearshoring. And there is more.

Mexico’s economic strength, which international experts place above the rest of Latin America, has been very favorably received on Wall Street. The beginning of the year brought presents in the form of a $7.5 billion debt issue to which the U.S. stock market responded by demanding triple what was being offered. And the government has just made another $2 billion debt placement. The Mexican Treasury’s holiday wishes were not about peace and love, but about fiscal and economic strength. And yes, there is more.

The currency responded as expected, showing geological-strength solidity. The Mexican peso appreciated 13% against the dollar, the second best performance after the Colombian currency. The exchange rate has been below 17 pesos per dollar for several months, far from the more than 20 quoted in previous years. The economy, like coins, has its heads and its tails, or as they say in Mexico, eagles and suns. If the currency is strong, the remittances sent by migrants lose value. Even so, things are going well on that front.

2024 is an election year in Mexico. On June 2, one male candidate and two female candidates will face each other at the polls, and in all probability Mexico will have its first ever woman president. The economy will not be a recurring topic of the campaign, at least not by the opposition: why mention that the minimum wage has risen above the Consumer Price Index, which everyone considers a success? It is better to insist on other issues: migrants will continue to suffer along the border and weapons and drugs will keep circulating without the need to show a passport. Poor Mexico, a country so rich and still with so much poverty.

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