Mexico’s economy is booming only because of NAFTA and foreign-owned enterprises operating in its export sector. John Paul Rathbone, the Financial Times‘ Latin American editor, explains that the country’s domestic economy is not doing well at all.
[Mexico's] domestic economy remains stifled by tycoon capitalists and their oligopolies. Mexico’s business chieftains of today, such as Carlos Slim, the world’s richest man, are simply the corporate caciques, or tribal chiefs, of old. The institutional fragility of Mexico’s fledging democracy helps explain why organised crime gained such a grip. ….
Mexico is now reaping the bloody cost of its weak institutions. The corrosive effect of drug trafficking exacerbates the situation. Each year organised crime steals some 6m barrels of petrol from Pemex, the state oil company. That haul is worth about $500m – what the RAND corporation estimates the drug cartels make each year from exporting heroin to the US, of total drugs exports worth about $6.5bn.
Narco-trafficking explains only half of Mexico’s “drugs war”; corruption is the other half.
John Paul Rathbone, “Insecurity fails to stem Mexico’s growth“, Global Insight (FT blog), 27 June 2012.
Mr Rathbone is author of The Sugar King of Havana: The Rise and Fall of Julio Lobo, Cuba’s Last Tycoon (Penguin, 2010).
Tags: Mexico
