Calhoun upbeat about reforms

Tuesday, 25 February 2014 00:10
THE NEWS


Mexico is at a crucial moment in its history, according to Craig Calhoun, director of the prestigious London School of Economics.

If the country plays its cards right and acts wisely in implementing a series of reforms, it can catapult itself into the ranks of a world leader, he said. If not, he warned, Mexico will lose out on what would have been a great opportunity.

“Mexico is in a position to be one of a small number of countries that are essentially global leaders,” Calhoun said recently in an interview with the newspaper Capital de México, a sister publication of The News.

In Calhoun’s view, a series of structural reforms passed last year in key areas such as energy, education and the telecommunications industry have given Mexico a more solid economic and social foothold.
But the benefits from the reforms won’t come automatically.

“Mexico will need to be inventive and creative over the next few years to develop new ways of working,” Calhoun said.

For example, he said, lawmakers have yet to pass the secondary laws that will implement the reforms. And after that, the country will have to put the laws and reforms into practice, no easy task.

Calhoun, an Oxford-educated historian and sociologist who was in the country as part of a delegation led by UK Deputy Prime Minister Nick Clegg, addressed a variety of factors that Mexico must work on, such as improving its infrastructure, especially transportation and communications, and organizing its public and private financing schemes for projects that create conditions that are favorable to development.

“People didn’t pay much attention to (infrastructure) before, but now it’s come to the forefront,” he said.
To make the country’s infrastructure more effective, is to remove obstacles to development. “Mexico still suffers from some regulatory difficulties and difficult bureaucratic processes, so to get things done can take longer,” he said. “The government’s reforms begin to speak to this.”

Security is also essential, Calhoun said.

“Mexico has suffered from the U.S. demand for drugs and it has created some of the occasions for drugs and violence in Mexico and the United States,” he said. “The U.S. is not wrong to say Mexico has a security problem, but the U.S. is wrong to fail to recognize that it helped to create the security problem.”

But Calhoun also recognized that the United States has helped Mexico’s cause in other areas. “The American economy has created opportunities for manufacturing jobs and some benefits so it’s not completely a one-sided story,” he said.

But in Calhoun’s view, inequality threatens Mexico’s progress.

“Mexico has had many exciting moments before,” he said, mentioning the early 20th century and the 1960s as examples. “But development was blocked in part due to the severe inequalities in society.”

The informal sector, he said, is a result of existing inequality, with people forced to resort to the underground economy in order to make any kind of living. “When that happens you create problems and lose the energy, the creativity of many of its people,” he said. “Everybody has to benefit from the economy.”