Not too many decades ago, geography imposed limits in the capacity of the development of nations. Distances and lack of infrastructure determined whether poor countries would remain poor, with few possibilities of progressing. However, technological advances have transformed the planet on permitting it to escape from the “prison of geography”, as it is called by Nobel Prize winner Angus Deaton: “Billions of people have joined the global marketplace by building connectivity despite ‘bad’ geography and institutions”*. Technology opens colossal opportunities because it permits access to new ideas, business practices and technologies to the most recondite spot of Earth. In spite of the opportunity, Mexico has not taken advantage of these more than marginally. Not everything is about elections or NAFTA.
According to Parag Khanna in his book Connectography, the future of the world will be determined by the supply chains that are established within and among nations. The capacity to bring products to markets and raw materials to production centers is what will determine the wealth of nations in the connectivity era. The key to success in these ambiences lies in connectivity and this is determined by the infrastructure and the adoption of technologies that permit connectivity.
It has always been known that infrastructure is crucial for development, but not just any infrastructure is relevant: only that which allows breaking with the limits of geography and poverty. “There is no worse corruption than the oppressive inefficiency of societies where the most basic mobility is hampered by nonexistent infrastructure. It’s like life without the wheel”. And Khanna goes on: “So desperate is their lack of physical and institutional foundations that we should seriously consider that the biggest problem with state building is the state itself… It is not foreordained that all states achieve territorial sovereignty and political stability. In many postcolonial regions, the supply chain world is taking root far more quickly than competent governance. Instead of taking today’s political geography as sacred, therefore we should get the functional geography right first, stabilizing and connecting urban areas inside and beyond their national boundaries to better align people, resources, and markets. This means that city building should be seen as the path to state building ─ not a by-product of it…”.
Khanna’s point is that infrastructure should be conceived as a means for promoting proximity among persons, resources and markets, so that this becomes a springboard to development. In this respect, it is critical that the infrastructure projects promoted serve to raise connectivity because resources are scarce and not all contribute to development. It is imperative, says the author, to understand the map of a country, of a region and of the world as an ensemble of productive hubs that, on linking directly, sanction the surmounting of the limitations of weak States and compass-less governments. From this viewpoint, there is no investment more important than that of the infrastructure that countenances that connectivity.
Instead of the empires of the past devoted to riding roughshod over great expanses of territory and wellsprings of resources, notes Khanna, the true dispute at present concerns the generation of value by means of connectivity as a means of accelerating the growth of economies. On studying China, the author asserts that that country does not have the intention of controlling vast regions of Africa and Asia (like previous empires did), but instead on acquiring access to their markets as fountainheads of resources or as destinations for their products. That is, the leading theme of the future is logistic in nature.
In that future world the companies are essential actors because they will be in charge of providing goods, resources and jobs; acting beyond their borders will recast the dynamic among businesses, governments and unions, which will demand novel forms of the rendering of accounts not only for the government but also for the enterprises. In fact, states Khanna, “As states come to depend more and more on corporations, the distinction between public and private, consumer and citizen, melts away. When the national citizenship provides little benefit, supply chain citizenship can matter much more”.
From this perspective, enticing supply chains constitutes the fastest way to raise the growth rate. But this is not only about attracting investment, but also chains of suppliers that feed them, so that employment opportunities and generation of wealth are broadened. As an additional benefit, the integral incorporation of the worldwide economy (something that in Mexico is only partial because a sizeable segment of the industrial plant continues to be -relatively- isolated from global trade), has become a vehicle for social transformation, of worker rights and, in general, of the rights of individuals.
“Connectivity is the platform for fuller societal development”. Even more so, “the opportunity to advance one’s own dignity through access to information -has become a fundamental right both for personal empowerment and for economic productivity…”. Connectivity has another benefit: as Deirdre McCloskey argues in her most recent book,** it is ideas and their dissemination that make development possible, ideas for electric motors and free elections, but above all the liberal ideals of equality, freedom and dignity for ordinary people.
It is not the capital or the institutions that made it possible for some nations to become wealthy, but rather the ideas that dignified the innovator and gave flight to his imagination. The supply chains would allow for the dissemination of all of what has been impossible for centuries in Mexico, including development and wealth.
*The Great Escape
** Bourgeois Equality