FINANCE: Mexico Seeks Path to Globalisation with a Caring Face

By Marwaan Macan-Markar Reprint | | Print |

Marwaan Macan-Markar

CANCUN, Mexico, Feb 27 2001 (IPS) - The World Economic Forum’s meeting to discuss the investment opportunities in Mexico got under way Monday in this resort city by the Caribbean coast with a call for business leaders to recognise the need for a social agenda if globalisation is to benefit all Mexicans.

That tone was struck by Guillermo Ortiz, governor of Mexico’s Central Bank, in his address during the opening session of this regional gathering of the WEF. Five hundred participants from 22 countries are meeting here over two days amid tight security.

“The challenge of economic policy-makers is to meet the needs of the marginalised people,” said Ortiz. “We have to recognise that globalisation has led to marginalisation.”

And he supported that view with evidence about the distribution of wealth across Latin America, where close to 40 percent of the people live in poverty. “There is a 12-fold difference in wealth between the richest 20 percent and the poorest 20 percent in Latin America,” he said.

For Ortiz, the only way to “legitimise” economic growth in Mexico and the region as a result of the economic agenda being pursued under globalisation, is to absorb into the process those who have been left out. That, he felt was true, even in the case of the North American Free Trade Agreement (NAFTA), which includes Mexico, the United States and Canada.

This view was echoed by Luis Ernesto Derbez, the economics minister of Mexico, when he participated in a later discussion, which had as its theme ‘The New Administration, New NAFTA?’

According to Derbez, the dynamic manner in which investments through NAFTA have helped Mexico emerges in the economic indicators of the country’s northern states, where most of the ventures have been set up.

The northern states have achieved 5.9 percent annual growth rates, he said. And the manufacturing industry located in that region has played a significant role, given that it helped double employment after NAFTA came into effect, in 1994.

In contrast, the southern states have registered a 0.4 percent growth rate. “This regional disparity has to be addressed,” said Derbez. “There is a need for the most vulnerable groups to benefit from NAFTA.”

And for that, he called on the leaders of finance, trade and commerce at the meeting to endorse the idea of “widening NAFTA” by investing in the southern states “for the whole population to benefit”.

The investment envisioned is in the manufacturing sector which is booming in this country.

“The weight of manufacturing within the economy is substantial,” notes a background paper on the Mexican economy distributed at the conference venue. “It represents around 20 percent of gross domestic product … Its weight in the external sector is even more overwhelming: last year it exported merchandise worth 145.3 billion dollars.”

Furthermore, manufacturing exports account for 87.3 percent of all goods sold abroad, while oil, agricultural goods and mining products make up the rest, the report, published by Oxford Analytica, a consultancy based in Oxford, England, points out.

Consequently, it has made Mexico heavily dependent on the US market, since its northern neighbour buys close to 88 percent of what Mexico exports. “The Mexican economy is extremely dependent on the United States, because of the strong trade links that have developed since NAFTA came into existence in 1994,” observes Oxford Analytica’s paper.

But that economic vision based on a neo-liberal policy of growth was questioned by Mexico’s anti-globalisation activists, who are conducting a parallel two-day session, the ‘Alternative Social Forum’, in a less-affluent part of this town.

“We know what NAFTA has done, the way it has destroyed our rights, denied labour rights and women’s rights,” argued Hector Rodriguez, of Youth United Against Neoliberalism, a Cancun-based non-governmental organisation (NGO).

“How can a few rich people make a decision for all Mexicans?” questioned a female activist of a Mexican group called the F-26 Network of Autonomous Collectives.

Later Monday, some 150 anti-globalisation activists, most of them from Mexico City, left the venue of the alternative forum to express their disenchantment with NAFTA and other pressing concerns arising out of globalisation.

But their plan to demonstrate outside the hotel where the WEF is meeting was killed by security teams in riot gear, including troops from the federal police.