Memo to Nieto: Mexicans are already richer than the Chinese

Memo to Nieto: Mexicans are already richer than the Chinese

Presumptive Mexican Presidential Elect Enrique Pena Nieto has an op-ed in today’s New York Times on his upcoming agenda for both the economy and security situation. None of it’s too surprising, but I did find this passage a bit odd: 

My generation’s objective is not ideology or patronage, but measurable success at liberating Mexicans from poverty. That is how I governed the State of Mexico, the country’s most populous, from 2005 to 2011.

I will govern with pragmatic realism and a clear, long-term strategy. Developing countries like India, China and Brazil have shown the way to significant and lasting poverty alleviation through institutional reforms and economic policies focused on growth. It’s time for these improvements to come to Mexico.

The countries he mentions do indeed have impressive economic growth rates compared with Mexico, but their citizens are still much poorer than Mexicans. Mexico’s per capital GDP in 2011 was $15,100, compared to $8,400 in China, $3,700 in India, and $11,600 in Brazil. According to the World Bank’s most recent statistics, 5.2 percent of Mexicans live on less than $2 per day, compared to 29.8 percent in China, 10.8 percent in Brazil, and 68.7 percent in India.

In an article for the print magazine last year, I discussed some recent research by economists from the U.S. Federal Reserve suggesting that China’s strong growth relative to Mexico may actually be because it’s relatively poor:

The authors hypothesize that countries with inefficient financial systems and weak rule of law can grow rapidly while they’re much poorer than the market leader — the United States — but will eventually plateau when, like Mexico, they reach a certain level of wealth. 

That’s not to say that Nieto doesn’t have his work cut out for him in reducing Mexico’s poverty rate and keeping the country’s still relatively robust economic growth going so it can break past that plateau, but it’s a little odd to look to China and India as models. Those countries are working furiously to reach the level of prosperity enjoyed by Mexicans.