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Mexico’s Challenges and Opportunities

Mexico is plagued by a public perception problem due to media coverage of drug cartel violence. But the bad publicity belies the economic strength and growing cultural influence of our neighbors to the south.

For many of us in the United States it is difficult these days to find positive news about our neighbor to the south. With seemingly daily coverage of drug cartels and murders raging across Mexico, a casual observer of news and foreign affairs cannot help but view the country in a negative light. These stories infuse images of violence sweeping the country and cause Americans to think twice about travel to Mexico.

The drug trade is admittedly a huge problem for Mexico, but we at Atlanta Pacific Group feel that this is a small part of the story and is relegated to the periphery of the country. Mexico is a country with a long, storied history along with rich cultural traditions. It offers more than dusty border towns and beach resorts. On our latest excursion into the country, we discovered more of Mexico’s interior and explored Guadalajara. The city is Mexico’s 2nd largest and is a significant center of culture and industry.

While the cultural and historical aspects of Guadalajara are indeed spectacular, I was intrigued by the economic opportunities and prosperity that abound in the region. Since the passage of the North American Free Trade Agreement (NAFTA) in 1994, Guadalajara has witnessed the buildup of manufacturing facilities serving the software, telecom, electronic and digital components industries. In fact, the region has come to be known as the ‘Silicon Valley” of Mexico.

For many, NAFTA remains a contentious issue, and some argue that it has hurt Mexican farmers and U.S. industry. But one thing seems apparent—this buildup and investment in manufacturing is responsible for the growing middle class in Mexico and contributes to the 5-6 percent annual growth of their economy. This expansion of manufacturing and job growth in Mexico will only continue as multinational corporations shift their production from Asia. As China battles wage inflation and higher transportation cost, some are wondering if Mexico is the “new” China when it comes to global manufacturing.

What does this mean for us in the United States? The rising middle class and growing population of 112 million Mexicans presents continued economic opportunity for U.S.-based companies to export products and services south of the border. According to Mexican President Felipe Calderon in the interview posted below, “Millions of American jobs depend on the demand of Mexican people.” And certainly many more jobs could be created in our country by entrepreneurs and businesses that are able to serve the demand of this growing populace.

But this opportunity greatly depends on our ability as a nation to develop and educate young Americans to have the sensitivity and knowledge of cultures and foreign lands. At Atlanta Pacific Group, we believe this education is acquired through international work and study abroad opportunities. Inspiring future leaders of America through international education is a path for us as a nation to strengthen our country and restore our economic vigor.

For more discussion about Mexico and its challenges and opportunities, please check out this insightful Charlie Rose interview with Mexican President Felipe Calderon:

http://www.charlierose.com/view/interview/11664

Questions or comments? Please email Michael Fenton at mfenton@atlantapacificgroup.com

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