Placing Blame for Mexico's Ills

Yet the so-called Washington consensus has done little to spur economic growth, reduce income disparity, create jobs and stem migration to the U.S.

Consider the landmark NAFTA agreement.

Proponents point to the nearly threefold leap in trade between the United States and Mexico as proof of the pact's success. NAFTA has vaulted Mexico into Latin America's premier exporter and given it a fat trade surplus with the United States. Yet the agreement has yielded little in the way of net job creation or in helping to build the vibrant Mexican middle class that supporters promised.

U.S. and Mexican officials touted the deal as a way to stanch the flow of illegal immigrants by creating jobs in Mexico. The tide of undocumented Mexicans in the U.S. surged after the pact was implemented. Fully two-thirds of undocumented immigrants currently living in the United States have been there 10 years or less, according to the Pew Hispanic Center.

Many of those people are Mexicans from hard-hit rural areas, the predictable casualties, NAFTA critics say, of a trade deal that forced Mexico to wrench open its farm sector without a viable transition strategy for millions of subsistence farmers.

Adjusted for inflation, Mexico's growth in gross domestic product has been flat for more than two decades. The cost to Mexico's people for this dismal performance is staggering. If Mexico's economy had grown at the same pace from 1980 to the present as it did in the period from 1960 to 1980, today it would have the same standard of living as Spain, said economist Mark Weisbrot, co-director of the Center for Economic Policy and Research in Washington. Instead, nearly half of Mexico's 106 million people live in poverty.

"It's hard to reduce poverty and create employment when you don't have growth," Weisbrot said. "To have 25 years of this rotten economic performance, you'd have to conclude something is wrong."

Some analysts contend that Mexico simply hasn't moved far enough and fast enough down the free-market path, while botching earlier reforms. Privatizations such as the 1990 sale of the state-owned telephone company essentially replaced public monopolies with private ones. Mexico's inefficient state-owned energy companies are harming its competitiveness. Red tape and corruption are strangling innovation.

But Weisbrot and others contend that some free-market policies simply haven't delivered and are contributing to the immigration friction that has become a major sore point in U.S.-Mexico relations.