As Mexico finds itself in the midst of high political polarization, economic uncertainties, and different social tensions, it is tempting to venture into predictions. “Reading the tea leaves” on Mexico’s political and economic future, however, is not an easy task. Perhaps we can begin to map things out by looking at some of the most relevant data points. Here is a helpful list of them to consider:
•PRESIDENT’S APPROVAL.- President Andrés Manuel López Obrador remains popular and broadly approved after three and a half years in office. According to a “poll of polls” produced by Oraculus, Mexico as of May 8, 63 percent of Mexicans approved his performance. Moreover, he has consistently maintained his approval rating above 50 percent. Reforma newspaper’s most recent poll puts MORENA (the President’s party) with 47 percent of voting intention for the 2024 Presidential election. In the recent presidential recall referendum, Mexican voters voted overwhelmingly for him to remain in office (92 percent), even if participation was very low (17 percent).
•THE MEXICAN ECONOMY.- The Mexican economy is struggling to reach high and sustainable growth rates in the post-Covid19 environment. Mexico’s national statistics agency (INEGI) reported an annual GDP growth of 1.6 percent during this year’s first quarter. In this same vein, the Organization Economic Cooperation and Development (OECD) recently updated its GDP per capita estimate for member countries. Unfortunately, Mexico lies at the bottom of the 38-member list with a dip of 7.0 percent between Q4 2018 and Q1 2022. The OECD average stood at a 2.5 percent increase for that period. Moreover, according to INEGI’s latest figures (February) investment in physical capital, a commonly used indicator of future economic growth potential, was 6.1 percent below its January 2020 level. David Kaplan, a specialist on Latin American labor markets for the Inter-American Development Bank (IADB) suggests –as does the government– that employment has recovered, but he estimates that it remains with a deficit of around 872,000 job positions from its pre-Covid19 level. It is commonly held notion that Mexico must create around 1 million jobs a year to deal with demographics as young Mexican enter the labor market. Finally, inflation reached an annual rate of 7.68 percent in April, the highest level in 21 years.
•CRIME & INSECURITY: Most Mexicans consider insecurity the country’s main problem. According to Reforma’s last poll, 67 percent of the population believes that violent crime has increased during the last 12 months, while 66 percent say the same thing about overall insecurity. A recent study produced by T Research International, based on the government’s own numbers, reports that during the present administration there have been 117, 587 homicides, a figure way above that of the any previous government. With increasing protests against violence towards women, femicides have captured the attention of public opinion with the federal government reporting 997 cases during 2021. In the Global Organized Crime Index, Mexico was ranked number four out 193 countries and second in the Americas.
•FOREIGN TRADE & REMITTANCES: As the United States, Mexico and Canada Agreement (USMCA) reaches its second anniversary next July, bilateral trade and investment disputes have become more evident, while Mexico remains the United States top trading partner, during 2021, Mexican exports to the United States reached US $384.7 billion according to the U.S. Census Bureau. In all but four years since 1985 (2020, 2009, 2001 and 1986), Mexican exports have increased from the previous year. U.S. exports to Mexico reached US $276.5 billion. At the same time, from April 2021 to March 2022, Mexico received US $53.5 billion in migrants remittances -a record figure- mainly from Mexican nationals living in the U.S.
•POVERTY: According to 2020 figures by Mexico’s independent development agency (CONEVAL), 43 percent of Mexicans live in poverty and 8.5 percent in extreme poverty. For 2022, the Mexican federal government will spend around US $14.5 billion in social programs intended to alleviate poverty.
•MIGRATION.- Next month the ninth edition of Summit of the Americas will be held in Los Angeles California. Dealing with regional migration is expected to be an important and highly debated topic, with Mexico right in the middle as a country of origin, transit, and destiny of migrants, and as it works with the U.S. to address the challenge in their shared border. The U.N.’s High Commissioner for Refugees (UNCHR) states that Mexico received 131,414 asylum requests in 2021. Five years ago, the number of asylum requests was less than 15,000. The U.S. government reported 221,000 migrant encounters in the U.S./Mexico border last March, the highest level in two decades. During FY2021, the total number of migrant encounters was 1.7 million. The number of encounters with Mexican nationals in March was 87,338 as compared to 18,603 in March 2019.
As the 2024 presidential elections nears, there will be a fierce debate about Mexico’s future, one that hopefully is not only based perception and narrative but also by reality. So far what we see is at best a mixed bag results over the last three years, and at worst, a significant of deterioration of Mexico’s future.
