By Patrick Balbierz and Evan Gottesman
On Monday, March 23, 2015, World Policy Institute hosted former Mexican President Vicente Fox for an intimate discussion about his historic presidency, how it shaped his nation’s economic strategy, and his current quest to make his country a hub for technology.
Speaking before a distinguished assembly of individuals from the private and public sectors, Fox reaffirmed his belief that the 1994 North American Free Trade Agreement (NAFTA) not only dramatically improved the well-being of Mexicans, particularly in the north, but the fortunes of Americans as well. In the 20 years since the treaty was signed, trade between the U.S. and Mexico has increased by over 500 percent, creating an intricate web of supply chains across North America.
Fox further highlighted the impressive strength of the Mexican economy. The country’s GDP is predicted to grow by 3.08 percent this year, making Mexico a more appealing market for production. Firms from a diverse array of industries, including manufacturing and IT, are now seeking the benefits Mexico offers in terms of quality, affordability, and proximity to the United States.
While expressing his confidence in Mexico’s economic success, Fox also listed two major challenges the country will have to overcome in order to stay on a prosperous course. First, Mexico serves as a critical transit point between drug-producing countries to the south and consumer countries to the north—a scenario that threatens Mexican civilians and government alike. Second, Mexico needs to improve its educational system. A well-educated population will undoubtedly fuel economic growth and foster cross sector collaboration, involving public, private, and academic partnerships. To address the later challenge, Fox has created Centro Fox, which works to provide better educational opportunities to children across Mexico.
In addition to the state of the general economy, Fox specifically addressed the growing energy sector. Energy comprises 9 percent of Mexico’s GDP. Fox believes Mexico should implement recent reforms in the energy sector, incorporating greater private guidance, to accelerate job growth in the industry. In fact, projections estimate that the energy sector could add 2 million jobs by 2025 if the implementation of the new energy reforms takes immediate effect.
After the former Mexican president’s concluded his initial statements, guests had the opportunity to pose questions to Fox on issues ranging from economic disparity and education reform to the privatization of the energy sector in Mexico.
One attendee asked Fox for his thoughts on a political and economic arrangement in North America similar to the European Union. Fox previously supported such proposals, but on Monday he noted that conditions have changed. The EU no longer presents a united front. In fact, Europe’s experience demonstrates that the success of a single currency hinges on flexibility. Despite the issues faced by supranational arrangements like the EU, Fox indicated his support for a North American infrastructure initiative featuring significant American private investment, from which Mexico stands to significantly benefit.
With the entry of new businesses, primarily in the telecommunications, energy, and software sectors, Fox explained how small and large companies would collectively drive Mexico’s success. He believes Mexico will continue to enjoy economic gains given the government’s recent success in procuring 43 trade agreements with 43 different countries. Mexico has, in effect, created a global marketplace for its good and services.
Fox concluded by juxtaposing the pace and extent of Mexico’s success against the youth of its democracy. As a member of the National Action Party (PAN), Fox broke the Institutional Revolutionary Party’s (PRI) 71-year monopoly on power in Mexico when he was elected president in 2000. Fox lauded government reforms and cooperation between the PRI and PAN, despite old rivalries and the presence of 11 distinct political parties.
In short, Fox painted a portrait of Mexico that is both decidedly complicated and particularly promising. Though the country faces significant challenges, it has emerged as one of the most attractive investments in Latin America. Fox’s optimistic vision demonstrates that Mexico, and young democracies like it, can achieve prosperity amidst great diversity.
Patrick Balbierz and Evan Gottesman are editorial assistants at World Policy Journal.
[Photos courtesy of Matthew Breitel and Alyssa Stein]