IXMIQUILPAN, Mexico – At a time when countless Mexicans risk their lives to illegally emigrate to the United States and shootouts among drug lords continue to dominate the news, it’s understandable why Mexico might be perceived as a place with little hope.
Yet in places such as this tourist town that caters to the burgeoning middle class outside Mexico City, many Mexicans say their future looks brighter than it has in generations.
On weekends, a line of Chevrolet hatchbacks and other inexpensive new cars snakes into parking lots at the town’s waterslide parks. There, tourists munch on $2 corn dogs, snap pictures with digital cameras and spend some of their modest incomes. Every year their numbers grow, the town’s tourism department said. And every year they have a little more cash to spend.
“The last five or six years have been good for Mexico,” said Crescenciano Montiel, 34, manager of the Valle Paraiso water park. “Little by little, things have improved.”
Such stories abound, encompassing Mexicans of all income levels in many aspects of life. The economy is posting steady growth, more jobs are being created, and poverty rates have declined significantly in recent years. Crime is down, public health and education levels are improving, and Mexican democracy is more robust than at any time in history.
“The country is stronger than ever,” said Leon Krauze, a political author and television host. “We have managed to overcome many of the political and economic tempests that used to threaten us.”
As the debate over illegal immigration percolates in the United States, there are hopes on both sides of the border that Mexico’s improving economy eventually will provide enough jobs to encourage significant numbers of Mexicans to stay and prosper in their country.
There could be other benefits for the United States. Mexico bought $126 billion in U.S. goods between January and November last year, up 25 percent since 2004. Mexico would likely buy even more as its economy improves, said Eduardo Loría, an economist at the National Autonomous University of Mexico.
The brighter economic outlook in Mexico is one reason that the number of migrants apprehended by the U.S. border patrol has declined 20 percent during the past year or so, although tighter border enforcement and the slowing U.S. economy are also factors, said Wayne Cornelius, an expert on Mexican migration at the University of California-San Diego.
Many problems remain. Corruption and a feeble legal system are constraints on growth, and there is still an acute shortage of well-paying jobs. Mexico’s dependence on the United States for exports and cash remittances also could leave it especially vulnerable to a U.S. recession.
Even so, Mexicans such as Montiel cite increasing examples of how their country is undergoing a slow but dramatic transformation. Born into a farming family of 14 siblings in Ixmiquilpan, 70 miles north of Mexico City, Montiel said he could have headed to the United States like many of his relatives and neighbors.
Instead he went to college with a small scholarship, got a business degree and worked at a bank and insurance company. He and his wife have just one child, a 2-year-old daughter, a reflection of how Mexican families have grown smaller in recent years, thanks in part to better planning. The fertility rate is now 2.1 children per woman, on a par with the United States and just enough to keep population levels stable.
In 2003, Montiel persuaded his family to build a water park on a corner of their 25-acre farm, using water from a thermal spring formerly used for irrigation. The park now has five swimming pools, three water slides, a restaurant and a nine-room inn, and is visited by 800-1,500 people a month.
“We’ve been subsidizing it with our crops, but I think this year we’re going to break even,” Montiel said as he supervised workers installing a new faux-rock fountain topped with a fiberglass dolphin. “This is going to be the new family business.”
A stabilizing economy
Such displays of entrepreneurship and optimism were in short supply a decade ago, when Mexico was reeling from an economic meltdown and an armed uprising in the southern state of Chiapas. Banks were collapsing nationwide under a mountain of debt.
Politically, the country was monopolized by the Institutional Revolutionary Party, or PRI, which had used payoffs, intimidation and election fraud to rule the country under a virtual one-party system since 1929.
But change was in the air. The 1994 North American Free Trade Agreement had opened a huge new market for Mexican-made goods, spurring the construction of factories along the U.S. border.
In 2000, the conservative Vicente Fox became the first president from outside the PRI in seven decades. Under Fox and his successor, Felipe Calderón, inflation has averaged about 4 percent a year, and there have been no major financial meltdowns.
“The stability of the past decade-plus has allowed financial markets and banks to grow up. There has been a birth of a middle class in Mexico,” said Gray Newman, head economist for Latin America at Morgan Stanley investment bank in New York.
Economic growth has been modest, averaging about 3 percent a year, but the greatest improvement in living standards among Mexico’s 103 million people has been seen among those of humble means – surprising, perhaps, given the historic gap between rich and poor.
Mexico’s economy created roughly 950,000 new jobs last year, according to the government. That is a major improvement from a decade ago, when job growth was nearly flat, but still not quite enough to absorb the 1.1 million Mexicans who entered the workforce in 2007. That disparity, plus the fact that U.S. jobs often pay five times as much as those in Mexico, is a major reason why migrants continue crossing into the United States, Newman said.
However, if Mexico’s economy keeps growing at similar or slightly better rates, and if population growth continues to level out, then within a generation there might not be enough working-age people to fill its labor force, said Leonardo Martinez-Diaz, a Mexico specialist at the Brookings Institution, a Washington-based think tank.
Mexico “could go over the next 20 years from being an exporter of people to an importer of people,” Martinez-Diaz said. “That would be a pretty remarkable change.”
The emerging suburbs
Perhaps nothing is more emblematic of Mexico’s transformation than the rows of identical, low-cost houses that are growing like corn on the dusty plain in places such as Zumpango and Tecamac, north of Mexico City.
At the 7,000-home Paseos de San Juan subdivision, the construction workers move in waves across the ground, seemingly unable to meet demand fast enough.
At the sales office, former schoolteacher Manuel Navarro waited to pick up the keys to his new retirement home.
Navarro built his first house the traditional Mexican way: He saved a little money, bought some blocks and mortar and built it himself, one room at a time, over 15 years. Mexican cities are full of such half-finished homes bristling with exposed rebar.
Navarro’s new home – a two-bedroom, two-story concrete town house – is ready to go. It cost him $41,200 with financing through a housing fund for government employees.
“Who wants to wait 15 years for a house anymore?” Navarro said.
In all, 1.2 million homes were purchased using mortgages in 2007, up from 476,788 in 2000. Most of the mortgages were arranged through Infonavit, a government-backed fund that has doubled its lending in the past seven years.
Navarro credits Mexico’s move to a multi-party democracy for the change.
“When the PRI was in power, you could get housing credit from the government, but only if you were a party member or from a PRI town,” he said. “Things are more transparent now, more open to everybody.”
After decades in which big-ticket items had to be purchased with cash, credit is available for other purchases at terms more typical of developed countries.
At Abamex Chevrolet in Mexico City, 20-year-old supermarket clerk David Galvez and his girlfriend, Priscilla Torres, were shopping for their first new car.
“I’ve pretty much decided on that one,” he said, pointing to a burgundy hatchback called the C2, which sells for $7,300. Chevrolet was offering interest-free, 30-month financing to any buyer who put down a 35 percent down payment.
As lenders loosen the purse strings, carmakers have flooded Mexico with C2s and other autos aimed at the middle class: the $7,550 Dodge Atos, the $8,000 Ford Ikon, the $8,300 Volkswagen Pointer and the $8,700 Nissan Tsuru, which has replaced the once-ubiquitous Volkswagen Beetle as the choice of Mexican taxi drivers.
This year, Mexico’s Elektra appliance stores will begin selling the Chinese-made F1 hatchback. The price, $6,400, is aimed at first-time buyers.
A rapid transformation
At places such as the Las Americas shopping mall, which opened two years ago on the site of an old chemical factory in the suburb of Ecatepec, many of the shoppers are just a generation or two removed from peasants who lived the same way for centuries.
The theater buzzes with people lining up to see the latest Will Smith movie, and the food court is full of shoppers eating McDonald’s and Chinese fast food. The transformation has been so rapid, in fact, that some people – particularly those who lived through economic meltdowns in 1982 and 1994 – fear the prosperity could vanish just as quickly.
“People have houses and cars and things, but they’re in debt,” said Susana Hernández, 34, between bites of an ice cream cone in the food court. “I’m afraid a lot of people are going to be out on the street because they don’t know how to manage credit.”
Part of the concern is because of Mexico’s high cost of living, said Ricardo Pérez Navarro, head of the economics department at the Autonomous University of Guadalajara. Electricity and phone rates are high compared with those in the U.S., and basic foods like milk and meat cost about the same.
Some Mexicans are cynical about progress because of their country’s long history of high hopes followed by devastating crisis, Krauze said.
“We are a country that loves its historical scars,” Krauze said. “People don’t listen to the good side of the story.”
Crime may be an example of how public perceptions haven’t caught up with reality. The nationwide crime rate has been dropping steadily since 2001, according to surveys by the independent Citizens’ Institute for Studies on Insecurity. The murder rate has fallen 23 percent during the past decade.
However, the good news has been largely overshadowed by the drug war in cities along the U.S. border. Beheadings, shootouts in broad daylight and a wave of police killings have convinced many Mexicans their country is more unsafe.
“The middle class has grown, and the political situation is a little better,” said César Sumano, whose wife was carjacked outside a grocery store last year. “But it’s still a hard country to live in. We’ve got a long way to go.”