Lesson about development from Mexico

A more realistic development model is Mexico, a country that has turned its significant advantages into several modern areas but failed miserably in eradicating poverty across the country. Many people are disappointed with the mistake of some specific policies. However, this also shows the difficulties that emerging countries face.

Mexico has a lot of advantages. The economy is more closely related to the United States than to China: the country’s one-week export turnover to the world’s largest consumer market is greater than the export turnover to China in a year.

Once dependent on oil, Mexico now has a larger and more sophisticated industrial base than any Latin American country, exporting cars behind Germany, Japan and South Korea. In the past two decades, the Mexican macroeconomic management has been perfect.

Recently, the country has opened the oil and gas industry for private investment and sought to solve a private monopoly. Mexico also has an increasingly wealthy middle class and an industrial corridor that runs from the border with the US to Mexico City. The political system is also basically stable.

The third lesson from Mexico is the need to bring the informal economy to light. Small and unregistered companies are groups that provide work for most of the workforce, but are estranged by banks and looking for ways to evade taxes. This drains the raw plastics of the economy.

In the past decade and a half, while the productivity of the largest companies in Mexico increased by 5.8 percent a year, the productivity of the smallest companies fell by 6.5 percent a year. This is very common in small grocery stores in Mexico, where tacos are made and sold at all bus stops, as well as in restaurants in India, where only 2 percent of sales are Retail food and groceries are in the formal sector.

Electronic invoices, which create electronic traces for the tax department, and mobile banking services, which bring the poor out of the cash economy, are promising measures.