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Economic Freedom Remains Elusive to Our Neighbors to the South

Posted By Israel Ortega On May 19, 2010 @ 6:00 pm In International | Comments Disabled

Mexican President Felipe Calderon [1]

Mexican President, Felipe Calderon, is set to address a joint session of Congress today to address issues of mutual interest on both sides of our almost two thousand mile border.  Among the issues that will likely dominate Calderon’s prepared remarks will include the ongoing drug violence engulfing Mexico and threatening to spill over to our border states even more.

But beyond this critical issue of mutual concern, rest assured that Mr. Calderon will use this opportunity to speak about immigration.  Mr. Calderon will likely talk about the thousands of men, women and even children that die every year in the US-Mexico border yearning for an opportunity to live in our country.  But what Mr. Calderon will likely not tell us is how true economic freedom remains elusive for the vast majority of his citizens.

This claim is validated in our most recent Index of Economic Freedom that pegs Mexico in the 41st position.  Despite modest improvements in many of the ten key economic indicators in our Index, economic underdevelopment continues to plague Mexico. As the authors of the Index write, “Mexico’s overall economic freedom remains limited by lingering institutional weaknesses that include considerable corruption and a rigid labor market.  The judicial system is slow to resolve cases and vulnerable to corruption.  The rule of law is undermined by drug cartels and kidnapping.”

Additionally, as reported in this Heritage Foundation research paper [2], monopolies and duopolies in various key industries hamper economic freedom – stifling innovation and entrepreneurship.

Under this light, it is not surprising that many of Mexico’s citizens look to the north for economic opportunity and a higher quality of life.  To be fair, Mexican President Felipe Calderon has spoke about the need for Mexico to retain more its citizens and curtail the seemingly endless exodus to the United States.  Nonetheless, it is clear that more is needed than lofty rhetoric if Mexico is to be successful stemming the flow of undocumented workers to our shores.

Of course, we too have an obligation to strengthen cooperation by reaffirming our commitment to trade and shunning protectionist policies.  Unfortunately, this Administration has shown a willingness to placate the demands of the labor unions in the past as seen in last summer’s decision to pull funding for the Mexican truck program – aimed at facilitating trade between the two countries.

President Calderon no doubt faces a number of challenges, none more than reducing drug violence, but if he is serious about reducing the number of Mexicans looking to the United States for economic opportunities, he will need to take on the entrenched interests in Mexico.  The energy and telecommunications industries are in serious need of competition, and if opened to increased competition could prove vital in creating jobs in Mexico for thousands of well qualified Mexican professionals.

In short, only by empowering the Mexican people with increased economic opportunities, while resisting the lure of failed statist economic policies, will Calderon be able to provide his citizens the chance for a better life at home.  Unfortunately, for all too many Mexicans, that seems possible now only in their neighbor to the north.


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URL to article: http://blog.heritage.org/2010/05/19/economic-freedom-remains-elusive-to-our-neighbors-to-the-south/

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[1] Image: http://www.foundry.org/wp-content/uploads/calderon100519.jpg

[2] this Heritage Foundation research paper: http://www.heritage.org/Research/Commentary/2008/06/Mexico-Needs-Reforms

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