Gerardo Esquivel, Professor of Economics at El Colegio de México, argued that basic elements of the Mexican economy need to change in order for Mexico to improve its financial standing in his talk “Why isn’t Mexico rich? Why should it be?”, delivered on Tuesday in the Social Sciences building.
Esquivel said the problem was the result of a combination of significant factors. He said Mexico’s credit markets hinder competition and its government institutions aren’t strong enough to lead the country.
According to Esquivel, the majority of middle-aged Mexicans never completed high school. He said that although access is increasing, the numbers pale in comparison to other developing countries.
Esquivel also said more public investments in infrastructure and increased access to education would improve the country’s economic situation. “If Mexico doesn’t do any of this, or does not discuss this seriously, why should Mexico be rich? How can we expect to be rich?”
Esquivel said the country’s economic downturn is a recent development, following a 30-year per capita income growth of 3 percent, which collapsed during the administration of President Miguel de Madrid.
He explained that despite aggressive reforms that have opened Mexico to foreign trade and investment, helped them to achieve fiscal discipline, and allowed the country to establish privatized state-owned enterprises, the country’s economic growth continues to trail behind many other developing nations, such as Thailand, Turkey, and Chile.
“What you see is rapid growth of over 3 percent per year, the collapse of the economy, and then a period of growth at a smaller rate than before, and now, for the past 10 years, almost no growth at all,” Esquivel said.