Mexico's historic economic opportunity

utsandiego.com
By Sandra Dibble 
6 A.M.OCT. 21, 2014

TIJUANA — Mexico has undergone vast transformations in recent decades, and the country “is experiencing a historic opportunity that has not been seen for many years,” a leading Mexican banker said on Monday. But the country’s large informal sector is holding back progress, said Luis Robles Miaja, head of BBVA Bancomer, one of the country’s largest financial institutions.

“We have been losing productivity in the most brutal manner,” he said.

Robles, who recently assumed the leadership of the Association of Mexican Banks, spoke at Tijuana Innovadora, a 10-day conference that features prominent speakers in a variety of fields, including medicine, sports, government and business.

Also speaking Monday was Josefina Vazquez Mota, a politician with Mexico’s National Action Party who lost the 2012 presidential election. Her topic was her country's Dreamers — undocumented Mexicans brought to the United States at a young age who now face deportation to their native country.

Robles came armed with graphs and numbers to make his point that Mexico has emerged as a stable economy following the economic crises of 1988 and 1995. The middle class is growing — from over 38 percent of households in 2000 to more than 42 percent in 2010, Robles said, citing Mexico’s National Institute of Statistics and Geography. Forty-five percent of households own a car, he said. Nearly all Mexicans now have access to electricity, running water and television. Nearly half of females contribute to household income, compared with just more than 20 percent in 1980.

Mexico has become increasingly open to international trade, and there is a growing sense of the need for Mexico to participate in the integration of North America, he said.

“A revolution has taken place without our noticing,” Robles said.

While major reforms in the tax, energy and education sectors are key to boosting the productivity of Mexico’s economy, Robles said, the large informal sector that lies outside government regulation and taxation “translates into a lack of productivity.”

In counterpoint to his message of Mexico's overall progress was mention of the recent disappearance of 43 students in the state of Guerrero following an encounter with police. “It is deplorable, unacceptable, and although I do not think it will inhibit foreign investment, Mexico cannot live with this,” Robles said.