Is Mexico a Failed Narco State on The Verge of Economic Collapse or an Emerging Economic Power ? Mexico being the 11th world economy in nominal terms and 15th in purchasing power, it is evident that it is a country that can't be ignored as a third world country anymore. Even after being struck during the 1994 crisis, low blows in the 2001 crisis, and then again facing significant drawbacks in the 2008 recession Mexico still remains a stable macroeconomic country. Though the extent of influence of the South American Crisis was not much, during the 2008 recession, the Gross Domestic Product contracted by more than 6%.
Till the new president took office in December 2018, Mexico had an envious economic position in Latin America and other emerging markets. Its economic growth for the last 30 years has averaged roughly 2.1%. Mexico has reduced its growth forecast for 2019: from 2% to 0.2%. It seems the country is on the brink of a crisis: investors are running away from the country, and the rating agencies are drawing a wrong forecast for the country. Why?
One of the main reasons might be the new president: Andres Manuel Lopez Obrador, also known as AMLO. But wait a minute! By the time we make this video, AMLO has been in power for precisely one year.
Is this long enough to dismantle the whole Mexican economy?
The truth is AMLO’s first months have been anything but quiet. This political leader promised radical changes, and he is delivering!
Unfortunately for the Mexican economy, their new president, Andres Manuel Lopez Obrador, who, with a totalitarian control in both houses, is transitioning the country into an authoritarian communist regime. And as history has shown in Latin America(Cuba, Venezuela, Nicaragua), these types of regimes are not great for their economies.
Mexican economy in 2019.
Data up until October; has shown economic stagnation at 0% growth. And Mexico's outlook from most financial rating agencies is negative.
Mexico depends on the Remittances of its immigrants in the US. Mexico depends on the US Dollar. Mexico's economy depends on the USA.
Mexico fell into the neoliberalism trap 35 years ago and became 80% dependant on the US economy. Mexico has all the potential to be a 1st world powerful country alongside Indonesia, Brazil, India, etc. But in order to do that, they need to step up, end economic dependency with the US, diversify the economy entirely, and to get people out of poverty.
Another 3% of Mexico's GDP is made up of PEMEX, the national petroleum company.
PEMEX provides the funding for the social programs in Mexico (which have been pretty generous)- at this point, PEMEX is losing money - those programs will have to either find another funding source - go away - or a combination of the 2.
AMLO appointed a personal friend with NO experience in oil or international business to run PEMEX, and AMLO is now prosecuting the country's experts on oil and international business on "corruption" charges.
Doubling the wages in border towns from 5 dollars a day to 10 dollars a day, lowering prices, and reducing taxes for businesses. They’re all part of a new economic plan to curb mass migration to the United States. Mexico’s newly elected president says he’s responded aggressively to pressure from U.S. President Donald Trump to stop undocumented immigrants from crossing into the United States.
The Future is not looking bright for Mexico.
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