Recently Mexico hosted the G-20 meeting while Brazil hosted the UN´s sustainable growth conference. I´ve posted something on this before, but there´s more. From David Henderson´s blog I read:
This is from Ivan Eland, “The U.S. Should Take Lessons from Mexico,” June 20, 2012.
I found that first paragraph arresting. I realized that I’m one of those average Americans. But Eland goes on:
More important, the bad publicity on the drug death toll has unnecessarily dispirited even Mexicans and eclipsed Mexico’s economic success story. Brazil, billed as an engine for Latin American economic growth, has also overshadowed the equally middle-income Mexico. Yet in 2011, the relatively open Mexican economy, which has increased competitiveness, outgrew its Brazilian counterpart, dominated by large state-owned industries, 3.9% to 2.7% and is expected to maintain that gap in 2012. Whereas Brazil, like the United States, has debt-burdened consumers, Mexico has had manageable debt, low inflation, 17 years of macroeconomic tranquility, and thus investors in the automobile, aerospace, and electronics sectors banging down the door to get into the country.
Mexico’s most-recent annual growth rate (the chart doesn’t make clear, but I think it’s in real terms) is 4.6 percent. Not bad.
Mexico’s rating on the Economic Freedom scale? 75th. That accords with my prior views. Which makes its growth rate somewhat surprising.
And Brazil is ranked 102ond, which makes any growth even more surprising.
But if you look closer, there´s not much growth to be seen over the last 30 years. The charts illustrate. In the first chart, Brazil and Mexico are compared with Korea on the basis of output per employed person.
No contest there. The arrows indicate that in 1980 Mexico´s productivity was higher than Brazil´s, which was about the same as Korea´s. Thirty years on Korea´s productivity is higher than Mexico´s by an amount almost identical to Mexico´s advantage in 1980, while the difference between Mexico and Brazil has remained almost exactly the same, with both having essentially stagnated during that time!
The next chart indicates there are not many lessons the US should take from Mexico. It´s exactly the opposite!
HT Saturos
I thought so. US taking lessons from Mexico fails the laugh test.