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Mexico’s president wants to develop poorer south

Tonhe is green The slopes of the Tacana volcano in the southern Mexican state of Chiapas produce delicious coffee, but growers have long struggled to make a profit. Farmer Fernando Gamboa said that over the past six years, things have started to change. A group of his peers formed a brand cooperative in 2016 after taking advice from a charity. Since then, they have produced more and better quality coffee. They now sell it to national chain Toks, paying 112 pesos ($5.80) per kilogram this year, up from 65 pesos in 2017. shoes,” he said.

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Over the past three decades, Mexico has gotten richer.The country’s exports have grown from 12% to gross domestic product 40% from 1993 to 2021. But progress has been mixed. Factories along the northern border and in central Mexico churn out cars, aerospace parts and medical equipment. In contrast, the South has yet to find a production niche.Chiapas is said to be one of the three least attractive states for investment in the country IMCO, a think tank. Two others, Guerrero and Oaxaca, are also in the south. According to a measure that takes into account access to services, three quarters of people in Chiapas are poor (see map). Its residents are the least educated of all 32 Mexican states, with an average of just over seven and a half years of education.

Mexico’s president has long promised grand plans for the south, but little has changed. The first modern president from the south, Andrés Manuel López Obrador, came to power in 2018, partly on a promise to reduce poverty and inequality in the region . Many southerners receive about 5,000 pesos a month in cash from the government for participating in a program that encourages rural people to plant trees. The president is also building three of four major infrastructure projects in the region, including an oil refinery in Tabasco and the Maya Train, which will run through five southern states. He is upgrading roads, railways and ports along the isthmus of Tehuantepec, the shortest route between the two coasts. The president also forced U.S. brewer Constellation Brands to build a brewery in Veracruz instead of the northern state of Baja California, after he held a dodgy referendum in the northern state.

Meanwhile, the U.S. government is investing in Central America and southern Mexico, hoping it will reduce immigration.funding organization you say, the government’s development arm, works with farmers like Mr Gamboa to help them grow more and better crops and connect them with buyers.in july you say Started investing $30 million in similar projects in southern Mexico.

southern discomfort

There are many problems in the southern states of Mexico. First, they are farther from the United States, the main market for Mexican goods. The area is also full of small farmers using outdated technology. Its infrastructure is poor. Mexico’s public investment accounts for only 2.5% of its gross domestic product, down from a high of 6% in 2009. There has been no southern region development plan since the 1980s, notes Guillermo Wo of Fidesur, a government agency that promotes investment in the south. Its educational standards are often hampered by powerful teachers’ unions. Teachers in Oaxaca have gone on strike every year for decades. In 2016, they sparked riots that left six dead and hundreds injured.

Still, southern states have a chance to thrive, says Ana Gutiérrez IMCO. Covid-19 and tensions with China push US companies to nearshoring. . Between 2020 and 2021, exports, mainly food, will increase by 65% ​​in Oaxaca and 34% in Chiapas. Mexico itself is the 15th largest economy in the world and a large market for agricultural products from the South. While overall growth in the country has been lackluster compared with other countries, Mexican consumers are getting richer.last year gross domestic product That’s $9,255 per person, up from $7,773 in 1993 (in 2015 prices). Many people are willing to pay more for organic produce. More high-value agricultural processing can also take place in the South. Tourism can be lucrative. Chiapas has Mayan ruins and jungles.

It makes sense that Mr López Obrador’s government seeks to boost industrial investment. But his shenanigans in the South are unlikely to change the fortunes of local residents. He claims his oil refineries have created about 35,000 direct jobs and 165,000 indirectly. However, many of these jobs are short-term, such as construction contracts. The oil project will slow Mexico’s transition to clean energy, which could discourage foreign investment. Companies such as U.S. automaker General Motors have said they may hold off on making more investments in Mexico because dirty energy there would keep them from meeting their green goals.

Likewise, the Mayan train was opposed by many, whose fields or villages would be plundered by it. Better use of government funding is to improve local infrastructure, such as power grids, to ensure people have a reliable and affordable energy supply. Mr Gamboa complained that his village only got electricity in 2019.

Better education and training is also needed, not least because it will help people in southern Mexico find better jobs, most likely in the north. This will reduce to some extent the number of people working in the informal sector. More than 60 percent of Mexican workers do not have a formal job and therefore do not pay taxes or receive benefits.

Marco Gonzalez-Navarro of the University of California, Berkeley said the opportunity to get rich is greater in southern Mexico, where the domestic market is smaller, than in much of Central America. But in order to do that, the president needs to improve investment opportunities across the country. Southerners are free to move to other parts of Mexico to improve their lives and should not be dissuaded from doing so. But a broader problem is that Mexico has not become safer since Mr López Obrador came to power. Corruption and crime are still rampant. And the country’s foreign investment climate remains at the whim of the president.

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