Thomas Friedman: Mexico gets with times

February 26, 2013 

In India, people ask you about China, and, in China, people ask you about India: Which country will become the more dominant economic power in the 21st century?

I know the answer: Mexico.

Impossible? Well, yes, Mexico with only about 110 million people could never rival China or India in economic clout. But here's what I learned from a visit to Mexico's industrial/innovation center in Monterrey. Everything you've read about Mexico is true: drug cartels, crime syndicates, government corruption and weak rule-of-law hobble the nation. But that's only half the story. The Mexico of today is like a crazy blend of the movies "No Country for Old Men" and "The Social Network." Something happened here.

It's as if Mexicans subconsciously decided that their drug-related violence is a condition to be lived with and combatted but not something to define them. Mexico has signed 44 free-trade agreements -- more than any country in the world -- which, says The Financial Times, is more than twice as many as China and four times more than Brazil. Mexico has greatly increased the number of engineers and skilled laborers graduating from its schools. With its massive natural gas finds, and rising wage and transportation costs in China, it is no surprise that Mexico is taking back manufacturing market share from Asia and attracting global investment in aerospace, household goods and cars.

"Today, Mexico exports more manufactured products than the rest of Latin America put together," The Financial Times reported in September. "Chrysler, for example, is using Mexico as a base to supply some of its Fiat 500s to the Chinese market."

What struck me most in Monterrey is the number of tech start-ups emerging from Mexico's young population -- 50 percent of the country is under 29 -- thanks to cheap, open-source innovation tools and cloud computing.

"Mexico did not waste its crisis," said Patrick Zambrano, director of the Center for Citizen Integration. In the 1990s, Mexican companies lost out to China and were forced to become more productive.

Zambrano's website embodies the youthful zest for using technology to both innovate and stimulate social activism. The center aggregates Twitter messages about everything from broken streetlights to "situations of risk" and plots them in real time on a phone app map of Monterrey that warns residents what streets to avoid, alerts the police to shootings and counts in days or hours how quickly public officials fix the problems.

"It sets pressure points to force change," the center's president, Bernardo Bichara, said. "Once a citizen feels he is not powerless, he can aspire for more change. ... First, the Web democratized commerce, and then it democratized media, and now it is democratizing democracy."

If Secretary of State John Kerry is looking for a new agenda, he might focus on forging closer integration with Mexico rather than beating his head against the rocks of Israel, Palestine, Afghanistan or Syria. Better integration of Mexico's manufacturing and innovation prowess into America's is win-win. It makes U.S. companies more profitable and competitive, so they can expand at home and abroad, and it gives Mexicans a reason to stay home. The United States does $1.5 billion a day in trade with Mexico, and spends $1 billion a day in Afghanistan. Not smart.

We need a more nuanced view of Mexico. While touring the Center for Agrobiotechnology at Monterrey Tech, Mexico's MIT, its director, Guy Cardineau, a scientist from Arizona, said that, in 2011, "my son-in-law returned from a tour of duty in Afghanistan and we talked about having him come down and visit for Christmas. But he told me the U.S. military said he couldn't come because of the travel advisory here. I thought that was very ironic." Especially when U.S. companies are expanding in Monterrey, which is one reason Mexico grew last year at 3.9 percent and foreign investment hit record highs.

"Twenty years ago, most Mexican companies were not global," said Blanca Trevino, president and founder of Softtek, a Mexican IT service provider. They focused on the domestic market and cheap labor for the United States. "Today, we understand that we have to compete globally" and that means "becoming efficient."

Mexico still has huge governance problems, but after 15 years of political paralysis, Mexico's three major political parties have signed the "Pact for Mexico," under President Enrique Peña Nieto, to work together to fight the big energy, telecom and teacher monopolies that have held Mexico back. If they succeed, maybe Mexico will teach us something about democracy.

Mexicans have started to wonder about America lately, said Bichara. "We always thought we should have our parties behave like the United States'. No longer. We always thought we should have the government work like the United States'. No longer."


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