In 2005, the two state airlines – Mexicana and Aeroméxico – were hived off for privatisation and permits were granted for five new low-cost carriers. The following year, the number of air passengers grew by almost 12 per cent, more than in all the previous five years combined. Flights from Mexico City to Cancún now can be had for less than $100. Previously it had been cheaper to fly to Cancún from New York.
…huge swathes of the economy – beer, oil, soft drinks, cement, television, electricity and telephony to name a few – are still dominated by one or at most two big companies.
Legally protected companies for the most part, I might add. If you are listing the major problems of Mexico, we have:
1. Drug trade and corruption and crime, all rolled into one big package.
2. Bad educational system for most of the country, and bad cultural norms for education. Most people are literate but you don’t see many people reading.
3. State-sponsored monopolies.
Going back to the bright side, the numbers of the Mexican middle class continue to grow, grow, and grow. The shopping malls in Puebla and Veracruz are excellent, and they are not just for a fair-skinned minority elite. They are packed with middle class people, shopping, and turning Mexico into a middle class country. It really is happening, and I see it more and more each time I visit.
The real problem of immigration from Mexico is the screwed up Mexican economy. If they had reasonable economic policy and a reasonable growth rate the Mexicans would have to build a fence to keep the Yankees out. They have good weather, oil, a hard-working population, and proximity to the world’s largest market. The reason to build a fence at the border is to make Mexico treat its own citizens better and not make them travel to the US to find work.
I was at a fairly upscale resort in Cancun last weeek, and was a bit surprised to discover that about half the people staying there were middle class Mexicans.
TC:
“2. Bad educational system for most of the country, and bad cultural norms for education. Most people are literate but you don’t see many people reading.”
Wow, an economist admits that culture plays some role!
What’s next, admitting that IQ may be connected to economics success?
How can it be a middle class country if you don’t see people reading?
Well, Italy is a middle class country and few people seem to read anything other than Gazzetta dello Sport. The Spanish aren’t particularly big readers either. Even in London on the Tube I rarely see people reading novels, just newspapers – in other more literate cities like Moscow or Boston people on public transport are often reading actual books.
As far as I can tell, auto dealers in Mexico announce a fixed price, set by the manufacturer, and won’t budge from it. I’m not sure how this is enforced. I’ve also observed one dealer at least who pays a beautiful young woman to stand by the door and open it for anyone who walks in.
Mexico suffers from oligopoly and bad education, true. But what did we really expect from 150 million Catholics?
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