The American economy is expected by optimists to grow 2% during 2016 while to the south, Mexico’s economy is projected to grow 2.4%. During the first quarter of 2016, Arizona’s exporters shipped merchandise valued at $2.04 billion to Mexico. This amount is below the $2.40 billion that went to Mexico during the first quarter of 2015. If the export pace set in the first quarter holds for the entire year of 2016, Arizona’s exports to Mexico will fall far short of the $9.16 billion shipped in 2015.
The Tucson Sector of U.S. Customs and Border Protection covers the 262 miles from the New Mexico State line to the Yuma County line. It is one of the busiest border sectors with a staff of approximately 4,200 working customs, illicit drug interdiction and illegal alien apprehension. Although trending downward, apprehensions in the Tucson Sector are running at the rate of over 63,000 per year. In a sad commentary on conditions in Central America, unaccompanied migrant children are picked up at the rate of 600 per month, the majority coming from Guatemala, Honduras and El Salvador. Along the entire 1,989 mile U.S.-Mexico border, illegal border crossers are being apprehended at a yearly rate of over 331,000.
The Kino Border Initiative founded in 2008 is a charitable organization that provides humanartian services to the thousands of undocumented migrants deported through Nogales each year. The Kino organization can provide two meals per day, temporary lodging, clothing and personal items. It also operates a successful shelter program that provides a safe place to stay for deported women and children. Given the level of turbulence affecting Central America and Mexico’s ongoing struggle with drug wars, corruption and economic reform efforts, the Kino program will be in operation for many more years.
The Mexican Government’s Economic Productivity Unit says that the country’s economic output needs to increase. The problems of excessive informality (too many very small firms), insufficient financing, scanty worker training, anemic management, excessive regulation, crime and corruption are hindering development and contributing to a lag in productivity growth.
Mexico’s president, Enrique Pena Nieto, is being criticized for not doing enough to stem the country’s lawlessness and corruption. He is said to have mishandled the investigation into the murder of 43 college students in September 2014. The recent rise in the country’s homicide rate, the scandal involving the construction of a house owned by his wife and the failure of an anti-corruption bill to get approved by the Mexican Congress have severely damaged the president’s reputation.
More than 600,000 people signed the draft of the anti-corruption measure that was shaped by civic groups and presented to a somewhat reluctant Mexican Congress. When he did not exert enough effort to get the measure passed, the president’s approval rating took another dip. He is now seen as the unpopular leader of a nation that perceives itself plagued by drug violence, a sluggish economy and too many corruption scandals. A recent poll revealed that only 19% of Mexicans are satisfied with the course of the country’s democracy. Mexico had the lowest rating among the 18 Latin American nations surveyed.
Mexico ranks a poor sixth on the crony-capitalism index behind Ukraine (5th) and ahead of Indonesia (7th). Although President Nieto has taken steps to modernize Mexico’s economy, the structural reforms that he said would lead to improved economic conditions have been slow to produce results. Part of the problem may be due to overly complicated implementation procedures. Global economic conditions are another factor. Foreign investment in Mexico’s once closed oil sector has been slow in arriving due to low world oil prices. In the meantime, the approximately $24 billion in yearly remittances flowing to Mexico from the United States will continue to provide support for a sizable part of the country’s population.
With the amount of corruption, the drug-war’s high homicide rate and the level of poverty remaining mostly unchanged, over 60% of Mexicans believe the country is headed in the wrong direction. President Nieto was wrong to promise that his structural reforms would bring rapid results. Despite the blunder, the reforms will move Mexico’s economy in the right direction. Over time, that will prove to be beneficial to the expanding relationship between Arizona and the Mexican State of Sonora.