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Blame Mexico

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Many U.S. media are ignoring the real story - that Mexico is changing for the better despite drug wars and the swine flu.

BY DIANE LINDQUIST
Mexbiznews.com

Mexico’s media image in the United States has taken a beating lately.

Coverage of the outbreak of the deadly strain of swine flu and its focus on the country’s raging narco-trafficking war in conjunction with the visit of President Barak Obama and members of his administration were presented as threats that were spreading across the border into the United States.

CNN and ABC underscored the possible danger to U.S. citizens, going so far as to seek out a San Diego County family that had been abducted and robbed on a Baja California toll road more than two years earlier. But they didn’t include when the incident happened or that the alleged perpetrators were caught and security on the highway has been heightened.

Reports often reflected little understanding or knowledge of the country. One CNN anchor, for instance, identified the industrial city of Monterrey 300 miles from Texas as a border community.

Blame Mexico seems to be the theme as media outlets mostly limit their attention to three topics: politics, migration and narco-trafficking.

Poor Mexico, as the oft-repeated saying goes. So far from God, so close to the United States.

Less attention has been devoted stories reflecting the economic transformation that Mexico has experienced in the past three decades. A policy of import substitutions was replaced by one in which the country has embraced a free-market system and foreign trade, especially with the United States.

Business, propelled by the North American Free Trade Agreement, increasingly spans the U.S.-Mexico border.

This close association has pulled the country into recession as factories manufacturing products sold in the United States have seen their business contract severely.

Foreign investment, the bulk of it from U.S. sources, is expected to shrink to $15 billion to $17 billion from the $21 billion reached a few years ago.

Mexico’s embrace of free-market economics has made the country the darling of global capitalism. It is one of the most envied and emulated models of development.

Still, the country’s new business and economic realm deserves the amount of scrutiny that mainstream media gives to politics, migration and narco-trafficking – although one might hope for higher quality reporting overall.

Under Mexico’s new economic order, those who benefited most were tied to a new “dollar economy” linked mainly to the United States. Wealth remains concentrated at the top. Poverty is rampant, and the gap between rich and poor has widened.

Mexico has been identified as one of the worst countries in the world in terms of competitiveness. A 2007 World Bank report noted that monopolies, both public and private, are the country’s main obstacles to economic growth and business development.

Privatizations of hundreds of state-owned companies created, if not monopolies, “islands of privilege,” as former President Carlos Salinas de Gortari admits.

Crony capitalism is the engine that drives the economy. Carlos Slim, whose purchase of the government telephone company Telmex propelled him to the top ranks of the world’s richest entrepreneurs, is considered the most conspicuous example.

Along with taking on the narco cartels, however, President Felipe Calderon is trying to address the failings of the country’s economy. He has waged a campaign to get Slim to slash Telmex’s interconnection rates for landline and mobile calls. He pushed for new laws in which the notoriously inefficient and corrupt Pemex can use foreign investment to bolster its dwindling oil resources. He is assisting entrepreneurship among small- and medium-sized businesses. And, as part of Mexico’s recovery package, he is promoting infrastructure development that will diminish trade bottlenecks.

Like the technocrat presidents before him, Calderon is getting monetary support for his efforts from the United States and global financial institutions.

While the U.S. Merida Initiative might be providing $400 million to Mexico to combat drug trafficking, transnational crime and money laundering, the World Bank is giving $1.4 billion to combat poverty, the International Monetary Fund has extended a $47 billion credit line to help the country survive the economic crisis, and a further $3 billion in loans has been approved by the International Development Bank to help Mexico deal with the effects of the crisis and the swine flu.

Mexico’s economy is so closely tied to the United States that any recovery north of the border will propel recovery south of the border as well.

It’s time that familiar saying becomes: How fortunate is Mexico. So far from God, so close to the United States.

Diane Lindquist is the publisher of Mexbiznews. Lindquist, a former reporter for The San Diego Union-Tribune, has written for Business Week, Chief Executive, EcoAmericas, Coast and Ocean, and Industry Week. Republished with permission.

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