Letter From Mexico: Amid the Drug Wars, a Stunning Economic Boom

Letter From Mexico: Amid the Drug Wars, a Stunning Economic Boom

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MERIDA, Mexico— At a time when the United States is confronting the possibility of a “double dip” recession, Mexico’s economy is expanding at the fastest pace in a decade.

For most of the 20th century, Mexicans lamented that when the U.S. economy slowed down, Mexico, ever so dependent on its neighbor to the north, suffered a recession. “When the U.S. gets a cold, Mexico gets pneumonia,” was a familiar saying among officials and executives on both sides of the border.

When the global recession hit in 2008, it seemed the same pattern would hold true again: In 2009, Mexico’s economy contracted 6.1 percent. Mexican officials feared that draconian immigration laws would result in the deportation of hundreds of thousands of Mexicans back to Mexico, where they would face certain unemployment. They also feared a collapse in demand for Mexican exports by recession-hit American consumers.

But the opposite has occurred. Mexico’s economy is enjoying a period of robust growth as a direct result of internal migrations away from the U.S.-Mexico border to mid-size Mexican cities, and the repatriation of investment capital from Mexicans living overseas, primarily in the U.S.

The Central Bank's Key Role


As the global recession unfolded, Mexican President Felipe Calderon relied on Agustin Carstens, director of the central bank, to steer a financial policy for the nation. The result has been stunning.

Mexico’s gross domestic product (GDP) expanded 5.5 percent in 2010, and it is on track to grow 4.5 percent this year. Carstens is now being mentioned as a leading candidate to take over the International Monetary Fund after Dominique Strauss Kahn’s abrupt resignation. Other equally competent Mexican officials have worked to spur internal economic development. Finance Minister Ernesto Cordero, for instance, has made a point of focusing on internal growth rather than exports.

“It’s much more balanced growth with a much more dynamic domestic sector,” Cordero told reporters in Mexico City recently, emphasizing the Calderon administration’s emphasis on fueling domestic demand.

Middle-Class Resilience


The result has been an invigoration of Mexico’s middle class. Given the sluggishness of the U.S. economy, Mexicans professionals—once lured to the U.S. by Fortune 500 companies— are seeking opportunities in mid-size Mexican cities. This, in turn, is fueling new economic activity and encouraging domestic demand.

In the decade since 9/11, when U.S. officials made it more difficult for Mexican citizens to secure tourist and work visas, Mexicans have opted for alternatives. A case in point is the rapid economic development taking place in Mexico’s Yucatan peninsula. Unable to send their kids to Orlando, Mexicans have sent them to Cancun. Unable to seek medical care in Miami, they have traveled to Merida. Prevented from purchasing vacation homes in Palm Springs, they have invested in Playa de Carmen.

Where Americans can't find the money to fill in potholes, Mexico is accepting bids for a new, world-class airport along the 65-mile Cancun-Tulum corridor that is expected to serve 700,000 passengers its first year. While the U.S. had to abandon plans for fast trains that would have linked Tampa-Orlando and New York-Washington, Mexico plans a bullet train that will link Merida’s one million residents to Cancun.

American homes languish unsold for years, while half-million dollar homes are going up in fancy Mexican communities such as the Yucatan Country Club, which boasts a Jack Nicklaus golf course and a Mark Spitz Swimming Academy. This economic vitality is seen in many areas of the country, far removed from the drug-related violence that plagues the border region.

The strength of Mexico’s middle class can also be measured by the maturity of its democratic institutions. In 2000, for instance, Mexico was governed by an authoritarian regime, a single-party state that controlled or co-opted the nation’s socioeconomic and political organizations. In less than a decade it has become a true democracy, one in which the president is from a conservative party (PAN), most of the governors are from a centrist party (PRI) and the country’s largest city—Mexico City—is run by a mayor from a leftist party (PRD). Had anyone predicted in 2000 that this would be political reality in Mexico by 2010, it would have seemed like a fantasy.

Internal Population Shifts

The sluggish U.S. economy and stricter immigration controls are two of the key factors driving the boom. The number of illegal immigrants to the U.S. fell from roughly 850,000 a year in the years before the recession to 300,000 a year from 2007 to 2009, according to a report from the Pew Hispanic Center.

True, many of Mexico’s poorest people still risk their lives to find menial labor in the U.S., but the semi-skilled are finding more opportunities at home. The result has been an internal migration to where the jobs are. Mexico’s Census Bureau, known as INEGI, for instance, reported a 16 percent increase in Yucatan State’s population—almost all of it from people moving in from other parts of Mexico, and not from higher birth rates.

Mexican sociologist M. Bianet Castellanos chronicles the vast influx of Maya migration to the resorts along the Maya Riviera—people who, a generation ago, would have made their way to the agricultural fields of California and the bodegas of New York. They are finding better jobs in Mexico than they would in the U.S.—and without risking their lives at the hands of human traffickers, U.S. law enforcement agents, drug warlords, or American racists who subject Mexicans in the U.S. to hate crimes.

At the same time, Mexico’s economy is being energized and diversified by the arrival of working-age Americans. A generation ago, it was not uncommon to see entire communities of American expatriates—senior citizens living on Social Security, enjoying retirements of leisure, spending the afternoons playing golf, beach-combing and sipping margaritas. Now, younger Americans are also coming to Mexico to start families and open businesses. American officials estimate that there are more Americans living in Mexico than in any other country and who are fiercely loyal to Mexico.

Drug Violence in Perspective

This economic growth, unprecedented in its strength in more than a generation, is taking place at a time when the country is facing a wave of drug war violence.

But one reason the violence is so shocking is that it is out of the norm. “In a country of more than 100 million people, the odds of being killed in a drug-related homicide in 2010 were one in 6,667, about the same as the odds of being killed in an automobile accident in the United States (about one in 6,500). The odds of being killed in Mexico’s drug violence decrease dramatically if a person is not a drug trafficker, mayor, or police officer in a disputed trafficking region,” Viridiana Rios and David Shirk write in “Drug-Related Killings in Mexico, 2008-2010,” published by the Trans-Border Institute at the University of San Diego.

Fear-mongering by American writers is hardly new. “This is an attempt to understand Mexico's steep descent into turmoil,” wrote one alarmed reviewer of Andres Oppenheimer’s 1998 book, Bordering on Chaos, which lamented that Mexico was becoming a “failed state.”

Thirty years before that, Barry Goldwater was among those calling Mexico, then hosting the Summer Olympic Games, a “failed state.” Decades from now, Americans will no doubt still be uttering the same clichés. Fast forward a dozen years after Oppenheimer’s failed book, and Mexico, despite its “out of control” image, is flourishing.

Now when the U.S. catches a cold, Mexico can say, “Bless you,” and go about its business.
 

Comments

 
Anonymous

Posted Jun 6 2011

BE CARFULL MEXICO DON'T BITE THE HAND THAT FED YOU.

Anonymous

Posted Jun 6 2011

Wow! Don't I wish everybody were this optimistic! Where did they get their information? Business is down, tourism is WAY down...

Anonymous

Posted Jun 6 2011

Great article, and you can see the truth of it if you live in Mexico.
B. Gorbman

Anonymous

Posted Jun 6 2011

The world is changing and tables are turning!

Anonymous

Posted Jun 6 2011

What a bunch of crap...
Rodolfo Soriano-Núñez
México City

Anonymous

Posted Jun 6 2011

Don't bite the hand that fed you? Did this fool really type that in and hit send? Amazing.

Anonymous

Posted Jun 7 2011

Yes, and wait when Mexico recaptures the billions of dollars the United States Social Security has held in its suspense fund rather than pay to the undocumented forced to work under Social Security Numbers not their own because migration has not been reformed

Anonymous

Posted Jun 7 2011

and no word in the strong peso for the last 12 years. the dollar on the other hand is worth less every day.
I visit Mexico more than 20 times a year to go shopping for meds food and good time. drug war?
my problem is to get back to the USA border patrol think everybody is osama bin laden. thank you MEXICO where the fredom is a live

Anonymous

Posted Jun 8 2011

Excellent article although I found two aspects missing that would have helped give a more complete picture:

One is the disturbing trend toward narcos actively destabilizing businesses in Monterrey, the engine of Mexico's industrial growth. If this trend were to continue and spread, it would represent a serious drag on Mexico's economy and undermining the positive developments that the article highlights. The second is the U.S.'s role in the drug wars, and the effect that legalization north of the border could have on abating the problem.

Otherwise, it was refreshing to read a more optimistic view than one normally gets in the media, and one very accurate based on my experience of living and traveling extensively in Mexico.

Anonymous

Posted Jun 8 2011


You correct....drug thing blown out of proportion.
News has become shock and disaster news.

some clarification:

Planning does not mean done deal>

Cancun/Tulum world class airport on hold.
Ferry from yucatan to fort myers on hold.
Train Cancun- Merida is planning, not a done deal.
Undocumented workers with stolen SS #'s to be payed. Not going to happen.
Too bad though...It's their money they are putting in.

I love Mexico and the wonderful Mexican people.

I'm glad they are finding good jobs in their home country
and that the economy of Mexico is thriving. I may go and try to get a job there,
although it has not worked that well for poor Honduran's and Guatemalan's.

Anonymous

Posted Jun 8 2011

Finally, an article that states the good things happening in Mexico! :)

Anonymous

Posted Jun 8 2011

We love Mexico, and are glad we have a small property down there. Cost of living is good, health care is certainly better than in the U.S., and the people seem generally happier. A positive option for us, especially if the angry, aggressive climate in the US doesn't improve.

Anonymous

Posted Jun 9 2011

Business is down, at least in advertising, What helps Mexico is oil prices. When oil goes up, the peso gets strong and that always helps, look at the exchange rates predictions were that the dollar would hit 12.50 last year, and it's still under 12. But what about all the deaths of innocent people by drug cartels, kidnap victims and so on. A lot of people not related to either police or drug trafficking have disappeared or been killed, I doubt that anybody wants to buy vacation homes in Mexico right now. People is still trying to get away from Mexico and I mean people from all socioeconomic levels, not only the very poor.

Anonymous

Posted Jun 9 2011

IS the proof in the pudding ? Where are the people in downtown Ensenada, and other large cities? There are empty restaurants, empty hotels, empty beaches? I only wish the information was correct, and not optimistic rhetoric!!

Anonymous

Posted Jun 9 2011

Nice counterbalance to the American screaming media. The author showed quite some restraint in not mentioning America's insatiable appetite for illegal drugs and eager willingness to sell automatic weapons to criminals.

Anonymous

Posted Jun 10 2011

"without risking their lives at the hands of human traffickers, U.S. law enforcement agents, drug warlords, or American racists who subject Mexicans in the U.S. to hate crimes."

Would the author please cite some examples of these hate crimes? I see far more violent crimes being committed by these illegal Mexicans here than by 'American racists' toward them.

Anonymous

Posted Jun 10 2011

"without risking their lives at the hands of human traffickers, U.S. law enforcement agents, drug warlords, or American racists who subject Mexicans in the U.S. to hate crimes."

Would the author please cite some examples of these hate crimes? I see far more violent crimes being committed by these illegal Mexicans here than by 'American racists' toward them.

But then, us Americans are definitely to blame for the drug violence in Mexico, because of our ridiculously futile war on drugs.

Anonymous

Posted Jun 13 2011

Wiki -
In 2006, Time magazine reported that the number of hate groups in the United States increased by 33 percent since 2000, primarily due to anti-illegal immigrant and anti-Mexican sentiment.[54] According to the annual Federal Bureau of Investigation (FBI) Hate Crimes Statistics Report,[55] in 2007, Hispanics comprised 61.7 percent of victims of crimes motivated by a bias toward the victims’ ethnicity or national origin. Since 2003 the number of both victims of anti-Hispanic crimes and incidents increased by nearly 40 percent. In 2004, the comparable figure was 51.5 percent. In California, the state with the largest Mexican American population, the number of hate crimes committed against Latinos has almost doubled.[56][57]
[edit]

Anonymous

Posted Jun 13 2011

I live in Mexico and things are on the rise.

Anonymous

Posted Jun 14 2011

if there is a boom it is a drug boom.wikipedia does not mention this boom.the claim is rediculous.

Anonymous

Posted Jun 15 2011

To the "Be Careful Mexico" commenter ... rather, be careful U.S., as Mexico has been feeding YOU for decades ... by working in your fields for slave labor, and building your homes, and taking care of your sick, and so many other things that you were "too proud" to do ... and this is how you treat Mexicans? Who is feeding whom?

Anonymous

Posted Jun 15 2011

Ensenada suffers because of its proximity to the border where much of the drug related violence is concentrated. It's true that foreign tourism is down, but the article was about internal growth, including internal tourism. Having lived in Puerto Vallarta for many years I can confirm that while the "high season" is suffering due to bad press outside the country, the "low season" (the summer vacation season for many Mexicans) is not nearly as low as it was years ago. Lots of "nationals" now bring their families to the beach, take tours and buy vacation homes. Something has changed.

Anonymous

Posted Jun 15 2011

Ensenada suffers because of its proximity to the border where much of the drug related violence is concentrated. It's true that foreign tourism is down, but the article was about internal growth, including internal tourism. Having lived in Puerto Vallarta for many years I can confirm that while the "high season" is suffering due to bad press outside the country, the "low season" (the summer vacation season for many Mexicans) is not nearly as low as it was years ago. Lots of "nationals" now bring their families to the beach, take tours and buy vacation homes. Something has changed.

Anonymous

Posted Jun 15 2011

Ensenada suffers because of its proximity to the border where much of the drug related violence is concentrated. It's true that foreign tourism is down, but the article was about internal growth, including internal tourism. Having lived in Puerto Vallarta for many years I can confirm that while the "high season" is suffering due to bad press outside the country, the "low season" (the summer vacation season for many Mexicans) is not nearly as low as it was years ago. Lots of "nationals" now bring their families to the beach, take tours and buy vacation homes. Something has changed.

Anonymous

Posted Jun 16 2011

Some refreshing news for a change. I am happy to say that I am one of the expats with a thriving business in Mexico and I do fiercely protect my adopted home. Thank you for such an uplifting article.

Marlyse Lafleur (Cdn) living in Puerto Vallarta

Anonymous

Posted Jun 16 2011

Tourism of the Mexican National is in good numbers, the people who live in the USA and to a point Canada are not showing up in Mexico as years past. The bad economy up there, along with the media working hard scaring people away for crossing the boarder is the main cause I think.
Mexico took the destruction of the US economy like a tope on the road, slow down for a short time but back at full speed after a couple quarters. The building of infrastructure is non-stop, people building houses, new business opening.

Anonymous

Posted Jun 17 2011

Thank you for a decent and articulate piece that is not the usual "psuedo" journalistic scar mongering.

A refreshing change, I chose to move my home from the US to Mexico after 20 years , it is a wonderful country with very warm and pleasant people. If I could figure out how to solve my shipping needs I would move my small business here as well.

San Carlos, Sonora.

Anonymous

Posted Jun 17 2011

What bs. Monterrey is Mexico's industrial giant. The war is far from over. As goes Monterrey, so will go Mexico. This writer is a dreamer, and obviously does not live in Mexico. Or anywhere near it.

I can't believe he said, without risking their lives at the hands of human traffickers, U.S. law enforcement agents, drug warlords, or American racists who subject Mexicans in the U.S. to hate crimes.

I have never heard of a single Mexican killed by USA hate criminals, at least in this century.

Anonymous

Posted Jun 18 2011

i live in mexico the drug problem is real though i have never seen or had any interaction with it here i know the us demand for drugs is rampant and i see the real arrests in the news daily.
on the positive side i see the kind of construction in this country that remember seeing in the 90's and the beginning of the new millennium if. i have said for the last two years that mexico is on the leading edge of a boom. I like the optimism of this article, we need more of it in the world.

Anonymous

Posted Jun 18 2011

Yeah I agree with you on the optimistic adjective, I am a mexican (born, raised and living in Mexico) it's nice to hear all those sweet words but I think it's a bit exagerated, although some other things are true from what I have heard and read on the news. It's too bad some times journalists and reporters exagerate too much on pointless things to attract interest or make the whole note sound shocking, but it actually makes you wonder if it's a worth trusting source or just some tabloid or gutter press note.

Also, if you have an income, a stable, legal and legitim job and proof that you live in Mexico (obviously I am referring to middle and hight class) it's not hard to get a tourist , student or what ever US visa, and let's not even mention if u can afford to send your children to school there or to get a propety, that was just bluff.

Anonymous

Posted Jun 19 2011

If the U. S. could reduce its population by 20% by sending its residents to other countries to be cared for, then maybe the U. S. economy would also thrive. The difference is we are caring for 12,000,000, or more Mexican citizens that Mexico no longer has to worry about, at the same time those 12,000,000 or more are sending baskets of money back to Mexico to their relatives, so that they can keep the Mexican economy thriving, while Mexico avoids having to spend a dime to care for them or find jobs for them.

I have friends from a village in Mexico that has been totally taken over by drug lords, after they ran everyone out of their long-owned homes. Would there be a fear factor here??

The author of this article is not only brainless, but clueless,

TK

Anonymous

Posted Jun 20 2011

No mention of the fact that laundered drug money is the main driving force in the economic expansion, with drug profits far outweighing those of legitimate industry, as this STRATFOR report makes clear: http://tinyurl.com/ydjmt9q .
Nor any hint of the corrosive force that extortion, protection rackets and kidnapping have on the business climate. The article is a bit vague on documentation and some of the claims border on the preposterous, like a decline in Palm Springs purchases.
Finally, the author seems to have severe psychological problems, causing me to have doubts about his facts and motives. As this website documents, he's a stalker who has had restraining orders and judgments filed against him in California.
http://www.yucatanliving.com/editorial/about-louis-nevaer.htm

Anonymous

Posted Jun 20 2011

No mention of the fact that laundered drug money is the main driving force in the economic expansion, with drug profits far outweighing those of legitimate industry, as this STRATFOR report makes clear: http://tinyurl.com/ydjmt9q .
Nor any hint of the corrosive force that extortion, protection rackets and kidnapping have on the business climate. The article is a bit vague on documentation and some of the claims border on the preposterous, like a decline in Palm Springs purchases.
Finally, the author seems to have severe psychological problems, causing me to have doubts about his facts and motives. As this website documents, he's a stalker who has had restraining orders and judgments filed against him in California.
http://www.yucatanliving.com/editorial/about-louis-nevaer.htm

Anonymous

Posted Jun 20 2011

No mention of the fact that laundered drug money is the main driving force in the economic expansion, with drug profits far outweighing those of legitimate industry, as this STRATFOR report makes clear: http://tinyurl.com/ydjmt9q .
Nor any hint of the corrosive force that extortion, protection rackets and kidnapping have on the business climate. The article is a bit vague on documentation and some of the claims border on the preposterous, like a decline in Palm Springs purchases.
Finally, the author seems to have severe psychological problems, causing me to have doubts about his facts and motives. As this website documents, he's a stalker who has had restraining orders and judgments filed against him in California.
http://www.yucatanliving.com/editorial/about-louis-nevaer.htm

Anonymous

Posted Jul 30 2011

I am absoluely delighted to read this positive article on Mexico. This country is an extremely wealthy country, is far more relaxed than the U.S., has doctors. good ones, who pay attention and will give a patient more than 10 minutes of his/her time, and has a marvelous diverse culture. I live in San Carlos but own land outside of Patzcuaro. I would love to be able to move South. I hope that the people of Mexico will understand the importance of clean beaches. I know there are many clean beaches in Mexico. Just not here.
Aside from the beaches, Mexico is my home, I have many Mexican friends and intend to live out my life here.
Thank you for this fine article!!!

Anonymous

Posted Sep 7 2011

FUCK your commentary, U.S. will fall and you know it, Mexico will se in hard times but will recover, and why knot the roles will turn and the GREAT Nation will become a fail state, You know that the U.S. is lacking of engineers and other important workers while you say the mexican the poor country, know its when the justice come a GREAT nation builded by GREAT lies, will fall U.S the countdown is coming so better take care be prepaared the suffernig ones would be others... YOU coul avoid this if we work like a it was suppoused that the nations will....like both nations helping each other not as know that u.s. laughs about Mexico. Also Mexico doesnt search conflicts in other nations making wars and that stuff.....

Anonymous

Posted Jul 20 2012

this is true.the mexican people are doing very well.i know i live in mexico.but it is not a good idea to buy propery even mexicans have problems with that one.

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