Mexico’s challenge: inclusion

Mexico Today –  April  15 , 2021
Luis Rubio

 Inequality is a structural feature of Mexico: social background, geographical location, and the environment have built an uneven playing field since ancestral times. Mexico is not unique in having inherited a social structure and an orography that create unequal sociopolitical and economic conditions. Where Mexico does stand out (among countries with similar GDP per capita levels) is in having failed, or not even tried, to create conditions to improve the entire population’s odds of success, without distinction. In fact, the problem lies elsewhere: many Mexican politicians have gigantic, maximalist visions that turn into impossible dreams. Other politicians simply prefer for poverty to continue prevailing in Mexico.

The political discourse on inequality is generous in rhetoric, but lacking in solutions. Of course, there is no shortage of proposals to level down wealth via a radical redistribution of income. However, this would involve having many more poor, when what Mexican society demands is having many more rich. Other proposals focus on easing the symptoms of poverty or of those who lack access to social benefits. Usually, this involves subsidies in the form of conditional cash transfers to poor families while requiring them to fulfill specific commitments (like taking children to school and to health centers). This was the basis of social programs in Mexico such as Progresa (1997) Oportunidades (2002), and the like. Then, there are those who propose generalizing this principle through approaches like universal basic income which have the effect of erasing incentives for individual progress. Still, others seek magical solutions through more public spending (and its corresponding taxes) without changing either government expenditure goals or execution.

As German-born physicist Albert Einstein said, there is no reason to expect different results when doing the same thing over and over again.

On the other side of the Pacific Ocean, China has demonstrated that reducing inequality in a couple of generations is possible. What is required is a roaring economy that develops an education process focus in generating human capital in the form of capable individuals able to join the labor force. China’s success is so obvious that we should be ashamed because it is not the only country having achieved it. The Asian behemoth created incentives for private companies (national and foreign) to open and thrive, and devoted enormous resources to turn education into a means through which everyone, regardless of background, could join the 21st century labor market. With this strategy (pioneered by South Korea, Taiwan and others back in the 20th century), China managed to get more than 300 million citizens to join the job market, raise their living standards, and become taxpayers. A social mobility virtuous circle.

The challenge for Mexico is social inclusion: how to create conditions so that all Mexicans, without distinction, have equal access to the opportunities that the world offers. It involves changing the logic of Mexican public spending, the education system, and the development strategy overall. When the concept of social inclusion is embraced, the only thing that matters is that the economy grows rapidly and that the population is capable of joining it. That, in turn, sheds new light on the role of the mafia-like groups at the helm of Mexico’s teachers’ unions, other political bosses, and elected officials who have no greater goal than political control. They all know that a poor population is always easier to manipulate, which doesn’t prevent them from playing up inequality rather than taking action to eliminate it.

In the very different context of the 20th century, Mexico achieved accelerated social mobility thanks to the combination of political stability and public and private investment. In the 21st century of technology and knowledge, this is not enough. Success hinges on the ability of individuals’ to add value. Education, infrastructure and healthcare become critical assets in achieving that goal. Mexico’s progress requires creative social inclusion strategies, but the current government officially stuck in the 20th century.

The obvious question is why Mexico’s productivity grows so little -and, consequently, income levels- despite the success of economic sectors linked to the export markets. Again, when one looks at South Korea or China, the answer is obvious. Both countries have wagered on adding value, which is what has risen living standards in this century. You don’t have to be a genius to see that Mexican president Andrés Manuel López Obrador’s daily press conferences are a mere spectacle that distracts from the more relevant goal of implementing a proven economic development strategy.

Increasing social mobility is the only formula to reduce and eventually end inequality. Greater social mobility is the result of a government’s concerted action to create conditions for accelerated economic growth and for equalized opportunities -through human capital creation via education and healthcare- for the most disadvantaged members of society. Everything is based on leaders having economic development and social inclusion as their main goals, rather than political control and impoverishment.

* Luis Rubio is chairman of México Evalúa-CIDAC and former chairman of the Mexican Council on Foreign Relations (COMEXI).  A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. 

Twitter: @lrubio