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Mexico’s chiaroscuro: Big potential, but more poverty.

  • The current economic Mexican model does not diminish the inequality gap in the income distribution, this is completely the opposite.
  • Mexico has a big potential to achieve a fast economic recovery after the 2008-2009 crisis, but in order to make this possible, more attention should be paid to the population welfare.

  • It is reasonable to ask ourselves if a real economic solidity exists when most part of the Mexicans do not have the material ways to procure a dignified life.

Recently, the in vogue theme is the persistent inequality in the income distribution – especially in this complicated economic timesamong the population. Mexico has participated in national and international analysis and, even tough the information in these is different, the bottom line is that the current economic model does not diminish the inequality gap, but completely the opposite.

In this sense, it is important to say that the “failure” of this economic model is not determined by the impossibility of its strategies, but because of the implemented policies that looked for a 5% economic growth that has not been accomplished.

Involved in this indefinitely economic crisis period, Mexico has been qualified by international organisms as a country with a big potential to make possible a fast economic recovery after the finance deterioration of the period 200-2009. These declarations are based in the solidity of different macroeconomic variables and a responsible fiscal and debt policy.

Notwithstanding, the social equality results for Mexico in recent years are not good, there is a stagnation tendency in the economy as a result of the maintenance and approach of the disparities in the economy and the social state (these evaluations include information from the Organisation for Economic Co-operation and Development (OEDC), the International Monetary Fund (IMF), the CONEVAL and the Economic Commission for Latina America and the Caribbean (CEPAL)).

In accordance with the CONEVAL, the current crisis added 3.2 million people to the poverty level in Mexico, the CEPAL informs that, based in the study “Panorama social de América Latina 2011 (Social Panorama ofr Latin America)”, the poverty in Latin America reached in 2011 its lowest level in the last 20 years, thanks to the growth experienced in regional economies and more job opportunities.

In CEPAL’s inform it can be noticed that Honduras and Mexico were the only countries with significant increments in its poverty levels (1.7 and 1.5 percent respectively). In Mexico, during the year 2002, 39.4% of the population were in poverty conditions and 12.6 were indigents; in 2008, the poverty index was 34.8% and the indigence represented 11.2%; but in 2010 a significant increment in the poverty and indigence levels happened (36.3% and 13.3%). In both cases, the numbers are the highest in the analyzed periods.

The dependency of the Mexican economy with the United States plays an important roll in the poverty index difference with Latin America; this generated a major contagion in the 2008-2009 crisis periods.

Based on estimations in the mentioned studies, Mexico has a pending work to improve the employment quality, diversify the production and boost the chain values. Only five countries in Latin America (including Mexico,Colombia, Costa Rica, Ecuador, El Salvador) generate an annual deficit with reference to the social security, retirement and pension coverage levels.

In a strategic way, Mexico should procure to increase its productivity and adjust the salaries to reduce the income gap of the workers; that is, to take devoted care of the purchasing power of the salary; not the currency.

At this point it is reasonable to ask if there is a real strength in the economy when a big part of the population in the country do not have the minimum material resources for a dignified life.


Poverty in Latin America
Poverty and indigent evolution, 1980-2011


*Projection. Source: Consultores Internacionales, S.C.® with CEPAL information.