Restoring Mexico's International Reputation
"Mexico is not in as bad of shape as conventional wisdom would suggest," said Roberto Newell at the opening of his presentation, "Restoring Mexico's International Reputation." Dr. Newell, a public policy scholar in-residence at the Woodrow Wilson Center's Mexico Institute, went on to present strong evidence that in spite of the organized crime-related violence that has dominated headlines throughout the last few years, Mexico is performing quite well economically, politically and socially across a variety of metrics.
The problem, Dr. Newell argued, is that Mexico has allowed its reputation to be tarnished, resulting in a brand image problem. "If we don't do something and step up to the challenge of trying to change perceptions," he said, "then those perceptions will shape reality." While Mexico may not outperform emerging economies, such as the BRICs, in terms of growth rates, it continues to outperform the BRICs across a variety of other metrics such as life expectancy and overall health, business environment and per household spending. Even in terms of violent crime, Mexico has a lower overall homicide rate than Brazil, with much of the current violence localized to a few disproportionately-affected regions.
Dr. Newell conceded that while the perception might be worse than reality, Mexico does indeed face real challenges as a nation. Worker productivity has declined in Mexico, and many economists attribute the stagnation of Mexican economic growth rates to this decline. In addition, though Washington Consensus-style macroeconomic reforms were implemented in the 1990s, second wave reforms, such as competition reforms, have been slower in advancing.
"If we don't do something and step up to the challenge of trying to change perceptions," he said, "then those perceptions will shape reality."
Carlos Hurtado, General Manager, Inter-American Development Bank and Former Undersecretary of Budget and Ambassador to the OECD, agreed with Dr. Newell that although the data show that Mexico is doing better than Brazil by certain measures, perception is important and the perception is that Mexico is doing worse. Like celebrities, Dr. Hurtado said, the media is very subject to fashion and "Brazil is very fashionable, everything that happens in Brazil is fashionable."
Dr. Hurtado pointed out that although he considers himself an optimist, several economic aspects of Mexico are not at the optimum. Although Mexico has experienced macroeconomic stability in recent year, microeconomic policies need to be improved. Dr. Hurtado said that a young economic team in Mexico and political stalemates are part of the challenge for future economic growth. He also expressed concern about the quality of education in Mexico and the effect that a large informal economy and low tax rates have on revenue and government programs. Public finances in Mexico, said Dr. Hurtado, have been ok so far because of oil revenue. However, high public spending on an unsustainable revenue source is not a long term solution. Dr. Hurtado ended on a positive note, presenting IMF projections for the Mexican economy, which place it behind only Chile and Peru in Latin America.
Dr. Newell closed the presentation by presenting some real solutions for Mexico to improve its international reputation. He said that Mexico must have a clear mission and targeted messages when selling its image abroad. He also emphasized the importance of using qualified staff with the institutional skills to disseminate those messages. Lastly, he said that the messages must be supported through metrics, to dispel an image created through sensational headlines and anecdotes.A good reputation is indispensible, he closed, if Mexico wishes to successfully negotiate with the United States on issues such as immigration or trade.