State

FRIEDMAN: 3-way fight for future of Mexico

MEXICO CITY — This is a strange time for U.S.-Mexico relations.

The Mexican government just issued a travel advisory warning Mexicans about going to Arizona — where they could get arrested by the police for no reason — and the U.S. government just issued a travel advisory warning Americans about going to northern Mexico — where they could get shot by drug dealers for no reason.

Meanwhile, Wal-Mart de Mexico is expected to open 300 new stores in Mexico this year, thanks to growing Mexican demand for consumer goods. And Mexico's drug cartels will probably open just as many new smuggling routes into America thanks to our growing demand for marijuana, cocaine and crystal meth.

We take the Mexican-American relationship for granted. But what's happening in Mexico has become much more critical to American foreign policy and merits more of our attention. Mexico is not Afghanistan, but it also has not become all that it hoped to be by now.

Three groups are wrestling to shape Mexico's future. I'd call them "the Narcos," "the No's" and "the NAFTAs." Root for the NAFTAs.

The Narcos are the drug cartels. The success of U.S. and Colombian efforts to interdict drug trafficking through the Caribbean and north from Colombia have pushed the cartels to relocate their main smuggling through Mexico. President Felipe Calderón is bravely trying to take them on, but the Narcos have bigger guns than the Mexican Army — most smuggled in from U.S. gun stores.

While the Narcos are the rising bad-news story here, the rising good-news story is Mexico's burgeoning middle class — sort of.

Mexico has two middle classes. One lives off the oil exported by the state oil company Pemex, which funds 40 percent of the government's budget. That budget sustains a web of salaries and subsidies to teachers unions, national electricity company workers, farmers unions, state employees and Pemex workers.

I call this group the No's because they are the primary force opposing any reform that would involve privatizing state-owned companies, opening the oil or electricity sectors to foreign investors or domestic competition, or bringing best-practices and accountability to Mexican schools, where union control has kept Mexico's public education among the worst in the world.

Fortunately, though, there is another rising middle class here, which the Mexican economist Luis de la Calle describes as the "meritocratic middle class." It's people who came from the countryside to work in new industries spawned by NAFTA. This rising middle class has a powerful aspiration to dig out of poverty.

Mexico has standardized school achievement tests. Some of the best results, said de la Calle, can now be found in small private schools in poor Mexico City neighborhoods where the NAFTAs reside.

What is also striking, he added, are the names of the private schools in some of these poor Mexico City districts — like Iztapalapa: "They are called John F. Kennedy, Abraham Lincoln, Isaac Newton, Winston Churchill, Carlos Marx, Van Gogh and Instituto Wisdom." Such names appeal to the aspirations of Mexicans, about 40 percent of whom live below the poverty line but 75 percent of whom call themselves "middle class" in polls.

"We have two middle classes," de la Calle said. "One comes from teachers' unions and Pemex and power companies, who milk the Mexican government. These are the middle-class conservatives, and they want to preserve the status quo. But there is a rising and far larger Mexican middle class coming up from the bottom who send their kids to the Instituto Wisdom and who have a meritocratic view of the world."

So here's my prediction: When Mexico's steadily falling oil production meets its rising meritocratic middle class, you will see real reform here. The No's will no longer have the resources to maintain the status quo, and that is when the NAFTAs from the Instituto Wisdom will demand the reforms that will enable them to realize their full potential.

THE NEW YORK TIMES

  Comments