Mexico’s economy is facing a historic opportunity due to nearshoring, experts and authorities inside and outside the country agree.
But it is not the first time that an opportunity has arisen for the country to grow more rapidly. In addition to preparing, Mexico should also remember and put on the table the errors committed in other times that prevented Mexico from consolidating itself as a power, for example those that were recorded between the years 1977-1982 and that prevented the country from “managing abundance.” ”, just as they promised.
Just last Tuesday, the Secretary of Foreign Affairs, Alicia Bárcena, warned that in our country we are not understanding the depth of nearshoring.
“We are not understanding this window of opportunity… I say this from where I am, which is the Mexican Foreign Ministry, but I think we are not understanding the depth that nearshoring implies,” the official said in a public forum.
“We need to build one of the most powerful regions in the world, because there are many regions that are in trouble, such as the Middle East or Asia Pacific, which will not allow them to develop their full potential. We need to transform the current dynamics, so that businessmen and the government can do powerful work,” said Bárcena.
These words and warnings remind us that throughout its history Mexico has had several opportunities to transcend and boost its economy and get out of underdevelopment once and for all, but it has not been able to, it has not wanted to, or both.
These were the mistakes of the past
The mistakes that prevented our country from consolidating itself as an economic power are widely studied, but rarely remembered.
In 1978, given the global boost in international oil prices, Mexico received a veritable “carload” of dollars that, apparently, would lead the country to prosperity and even to the so-called “first world,” so much so that the then president José López Portillo launched that phrase in which he warned Mexicans to prepare to “manage abundance.”
But, instead, 4 years later Mexico faced one of the most serious crises in its history, which led to an also historic error: the nationalization of the banks.
Mexico cannot and should not repeat the mistakes of the past and begin by understanding, as the Secretary of Foreign Affairs said, the opportunity of nearshoring to capitalize, now, on an opportunity that is not repeated very often.
Some blunders in the past were:
1. Lack of analysis to understand the context and historical moment
Exactly what Alicia Bárcena recently warned is what the government of that time did not do and judging by what was said, perhaps it is also necessary to do it in these times, both by the public sector and the private sector. In the years of the oil boom, there were no public or private voices that led the necessary actions to take advantage of the moment.
2) Lack of planning, projections and strategic plans.
In those years, citizens were asked to prepare to manage abundance, but it was not said how, no one designed a strategic plan or plans that included projections about the possible resources that would be received, the sectors or industries in which they could and/or or should be invested, as well as the expected benefits and how to enhance or multiply them. Today it seems that we are going in the same dynamic.
3. Not investing in infrastructure
One of the great benefits of investments is their potential to develop infrastructure, which always triggers greater growth in the long term. Between 1978 and 1982, Mexico recorded one of the lowest public investment rates in history. In said period, the average public spending on investment was 3.5 percent of GDP and of this spending, less than 50 percent corresponded directly to infrastructure, that is, it barely reached levels of 1.5 percent of GDP.
Currently, spending on infrastructure is declining, representing approximately 1.5 percent of GDP after declining up to 40 percent since 2020, according to the Center for Economic and Budgetary Research (CIEP), which considers the lack of necessary infrastructure as one of the great pending of this country.
In fact, with the exception of the major works, in this six-year period the generation of sufficient infrastructure was conspicuous by its absence.
4. Lack of adequate and quality education
Public education in Mexico has been a serious problem in the country for many years, this six-year term was no exception.
In those years of the “administration of abundance” the human capital necessary to carry out the tasks that would allow the country to move forward was not prepared. Today we see a similar scenario, in which doctrine is even preferred over education itself. A “humanistic” education is advocated, whatever that means, without considering the skills and competencies necessary for citizens and the country.
5. Public deficit, the great trigger of crisis
In 1978, with the supposed and almost unexpected oil wealth, governments began to abuse the fiscal deficit, that is, the government’s indebtedness to finance current spending.
This deficit subsequently led to serious and constant crises, thereby diluting the benefits of oil wealth and, instead of managing the abundance, the country had to face almost permanent macroeconomic crises.
Currently, the government had been very responsible in managing public finances and avoided fiscal deficit for 5 years. However, in what will be the last year of the administration, 2024, The government increased spending for social programs and had no choice but to fall into a fiscal deficitthis is an error that in other times led the country to periods of crisis.
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