Mexico: Sustainable Development Goals

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Mexico’s Profile

Mexico has a population of 130 million and boasts of richness in cultural history and diversity as well as an abundance of natural resources. It is the 11th largest economy in the world and has strong macroeconomic institutions in addition to being open to private investment and trade. The authorities in Mexico have focused on the implementation of stable and sustainable fiscal and monetary policies, which have contributed to the emergence of the Mexican Peso as the most highly traded emerging market currency (The World Bank, 2019). Mexico is the 15th largest exporter in the world, which has been achieved through strengthened productive capacities, including raw materials and deepened production complexity on manufactured products that are integrated into not only regional but also global value chains.

Although Mexico has made commendable progress over the years, it has underperformed in terms of growth, poverty reduction, and inclusion over the past three years. The country’s economic growth between 1980 and 2018 is slightly above 2%, which negatively impacts progress in convergence relative to other high-income economies. Mexico’s per capita grew by just 1.0%. It’s per capita gross domestic product (GDP) is estimated to be 34.0% that of the United States, compared 1980’s 49.0% (The World Bank, 2019). This shows that Mexico has achieved moderate progress towards the reduction of poverty. The country’s GDP in 2018 was $1223.81 billion, which represents 1.97 percent of the world economy. The GDP averaged $449.46 billion between 1960 and 2018 and reached an all-time high of $1314.56 billion in 2014 (Trading Economics, 2019). 48.8% of the population lived below the poverty line in 2018, which is close to the level reported in 2008. The country’s median per capita income has recovered slightly over the past few years after having declined for several years. The median per capita income declined between 2010 and 2014 and grew by 1.8% between 2016 and 2018, which is still below the average for the LAC region (The World Bank, 2019).

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A 2008 report showed that Mexico was not an exemption in the improper use of natural resources and the impact on ecological footprint at the expense of biodiversity. The report indicated that the biodiversity of Mexico in 1961 was 4.1 global hectares, with an ecological footprint of 1.4 global hectares per person, but had dropped to 1.7 global hectares per person by 2005 while the ecological footprint had increased to 3.4. This meant that each Mexican used a larger area of land to meet their needs for products and food and to dispose of their wastes than the area available to support them in a sustainable manner (Chávez-Dagostino, et al., 2008). Recent data shows that Mexico performs better than the United States, Canada, and the United Kingdom on ecological footprint deficit, but poorly than Brazil, China, India, Indonesia, and Bangladesh (Geo-Mexico, 2010).

The major environmental issues affecting Mexico are air pollution, lack of clean water, and deforestation. Mexico is notoriously known as the among the leading world’s air pollution problems. It was declared by the United Nations in 1992 as the most polluted country on the planet (Li, 2019). The country embarked on addressing the problem, which saw the Mexico City ranked the fifth in 2007 out of the 215 cities studied by the Mercer Human Consulting. Variables studied included the presence of infectious diseases, water portability, waste management, and air pollution. Mexico continues to spend a lot of money on the purification of water. Deforestation remains a major problem in Mexico (Li, 2019). The country ratified the Paris Agreement in 2016.

Diagnosis of Mexico

Several factors contribute to Mexico’s economic underperformance or what can be referred to as the poverty trap. These include poorly functioning credit markets, perverse incentives to informality, inefficient regulation, and international regulation, particularly with China (Hanson, 2010). In Mexico, low levels of private credit are channeled to households or firms and lenders face hurdles in seizing assets from borrowers who default. The formal enterprises are overregulated and the structure of the country’s social protection programs raises incentives for informality.

Bad economic policies also contribute to the problems faced by Mexico. According to the International Monetary Fund (IMF) Mexico’s president, Andres Manuel Lopez Obrador, policies continue to hurt Mexico. The country needs additional measures to address the challenges presented by “optimistic budget targets, lower growth prospects, and the possibility of a catastrophic second debt downgrade of Pemex” (Webber, 2019). Another major problem is Mexico’s export-led industrialization strategy that replaced the import-substitution approach. The implementation of the export-oriented approach has contributed to the lag in the growth of Mexico’s GDP (Peters, 2013). Mexico has also experienced a decrease in foreign aid since the early 2000s.

Political polarization negatively affects debt policy decisions in Mexico. The equilibrium level of public debt increases when the degree of polarization between alternating governments is high. Large ideological differences contribute to a higher loss of not being reelected, which implies that the incumbent has higher incentives to spend to meet future campaign promises. The composition of spending is manipulated before elections to make it attractive to voters (Smith, Iberoamericana, & Melguizo, 2018). Research shows that debt issuances in Mexico grew dramatically from 2001 after the modification of local laws to create a national bond market, but SPV’s based on future transfers are the most used debt issuances.

Mexico is a mostly tropical country that is characterized by diverse geographical conditions, which include the tropical coastal regions, the dry and warm north, and the relatively temperate central highlands. The country has rugged geography, which includes both mountain chains of different range and extended coastal lines. The national territory comprises of 40% dry areas, 20% tropical areas, and 40% temperate areas (Gallup, Gaviria, & Lora, 2003). Changes in climatic conditions across the country are associated with dramatic changes in living conditions from one state to another, such as income per capita and literacy.

Poor governance is another major challenge faced by Mexico. Mexicans give a negative score to the performance of the government in education, health, security, economy, corruption, and poverty. Although President Lopez Obrador won a landslide victory in the July 2018 election and promised to address the problems of corruption and violence and inject new life into the sluggish economy, he continues to perform short pf the high expectations (Reuters, 2019). This shows that the government is not prepared to come up with policies addressing Mexico’s major problems.

Mexico has a total of 85 different native languages but speaking any of these dialects without speaking Spanish is a major barrier. Indigenous people are marginalized by language. The total fertility rate of women in Mexico declined from 6.32 in 1973 to 3.84 in 1986, which represents a 40% decline. The fertility rate for Mexico was 2.200 in 2016, 2.170 in 2017, 2,140 in 2018, and 2.117 in 2019 (Macrotrends, 2019). The decline is caused by higher educational status, labor force participation, and urban residence.

Mexico remains a different political and economic cycle than other Latin American countries and in a lower category of political risk. President Lopez Obrador believes that many of the problems faced by Mexico today are an outcome of structural reforms implemented since the 1980s. The reforms include privatizations, deregulation, orthodox macroeconomic policies, and the opening of the economy (Sancho, 2019). It was predicted that the presidency of Lopez Obrador would be complicated for markets, and this has been confirmed by his actions that lean more bearish consensus. Security remains one of the major internal issues affecting the Mexican government.

Sustainable Development Goals

SDG1: End poverty in all its forms everywhere

This goal focuses on eradicating extreme poverty for all people everywhere by 2030. This is currently measured as people living on less than $1.25 a day. Emphasis is no longer placed on poverty reduction, but on poverty eradication (Kamruzzaman, 2016). This raises the gaze of governments beyond the usual preoccupations with short-term political advantage or narrowly defined national interests (Kamruzzaman, 2016). Data shows that Mexico continues to lag behind in the eradication of poverty. Mexico has achieved moderate progress towards the reduction of poverty. 48.8% of the population lived below the poverty line in 2018 (The World Bank, 2019). The battle to eradicate poverty should be fought everywhere, including rural areas where people depend on farming, fisheries, or forestry for food and income. The lack of access to the means to purchase or produce food remains a major problem. Ending poverty requires a focus on “the most vulnerable, increasing basic resources and services, and supporting communities affected by conflict and climate-related disasters” (United Nations Development Programme, 2019).

Mexico has implemented several anti-poverty programs to help attain the eradication of poverty. A major program is the Progresa-Opportunidates (Prop), which is a conditional cash transfer program for which the country has gained an international reputation. In Mexico, it has become a norm that each incoming president must launch a new social program that targets the poor. Although the Prop is highly praised, especially internationally, the program includes various deficiencies because its primary objective, which is to diminish intergenerational poverty, is not being attained (Boltvinik, 2012). Research shows that those graduating from the program are not less poor than their parents. Another important anti-poverty program is the Prospera program, which pays a monthly stipend to unemployed mothers living in poor households but has limited educational attainment. The program gives women up to $147 every month, which is about twice the national minimum wage (Gomez, 2018). These mothers are required to ensure that their children attend school in addition to getting regular medical checkups and attending bi-monthly health talks.

SDG 6: Ensure availability and sustainable management of water and sanitation for all

The availability of clean water resources is of crucial importance to human health, environmental sustainability, and economic prosperity. The availability of clean water is under threat, which makes it crucial to address the difficulties associated with access to clean water, sanitation, and hygiene. It is estimated that more than 2 billion people are affected by the inadequacy of clean water, which may increase due to continued population growth and the effects of climate change (United Nations, 2017). It is reported that in addition to other challenges faced by Mexico is the inadequacy of water supplies in Mexic city. The part of the city infrastructure that supplies water is crumbling. Natural water reserves are also at risk and are expected to dry out in 30 years (Hogenboom, 2018). Mexico City continues to face water shortages even as it experiences floods. This shows the need for the government to put in place strategies that will ensure that the country is not left behind in the attainment of this sustainable development by 2030.

One of the ways to address the problem of poor drinking water in Mexico and enhance the attainment of SDG 6 is through international collaboration. This was initiated by an international network of water security provision experts, coordinated by the University of Bath’s Water Innovation and Research Center, which aims to address the problem of inadequate safe drinking water in Mexico (Lorenzo, 2019). The network encourages collaboration between water security experts, NGOs, government bodies, and water companies to find out the major issues and gain an in-depth understanding of existing water resources in the country. However, the government should find more ways of addressing the problem of cleaning water. One of the ways is to harvest, purify, and store water when it rains. Floods are common in Mexico, which implies that water can be harvested to address the gap in the supply of clean water.

References

  1. Boltvinik, J. (2012). Mexico’s alleged influence on poverty reduction strategies in Latin America. studios críticos del desarrollo, 11(2), 13–40.
  2. Chávez-Dagostino, R. S., Cifuentes-Lemus, J. L., Andrade-Romo, E., Espinoza-Sánchez, R., Massam, B. H., & Everitt, J. (2008). Mexico’s Ecological Footprint. Retrieved from https://apps1.semarnat.gob.mx:8443/dgeia/informe_2008_ing/01_poblacion/recuadro2.html
  3. Gallup, J. L., Gaviria, A., & Lora, E. (2003). Is Geography Destine: Lessons from Latin America. Washington, DC: Inter-American Development Bank.
  4. Geo-Mexico. (2010). Mexico’s ecological footprint compared to that of other countries. Retrieved from https://geo-mexico.com/?p=345
  5. Gomez, L. H. (2018, July 24). Mexican anti-poverty program targeting poor women may help men most, study finds. Retrieved from The Conversation: http://theconversation.com/mexican-anti-poverty-program-targeting-poor-women-may-help-men-most-study-finds-97917
  6. Hanson, G. H. (2010). Why Isn’t Mexico Rich? Journal of Economic Literature, 48(4), 987–1004.
  7. Hogenboom, M. (2018, May 14). How a city that floods is running out of water. Retrieved from BBC: https://www.bbc.com/future/gallery/20180510-how-a-city-that-floods-is-running-out-of-water
  8. Kamruzzaman, P. (2016). A Critical Note on Poverty Eradication Target of Sustainable Development Goals. European Journal of Sustainable Development, 5(2), 87-110.
  9. Li, M. (2019). Environmental Issues in Mexico: Air, Water, Land. Retrieved from https://www.ics.uci.edu/~wmt/courses/ICS5_W13/Mexico.html
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  11. Macrotrends. (2019). Mexico Fertility Rate 1950-2019. Retrieved from https://www.macrotrends.net/countries/MEX/mexico/fertility-rate
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  13. Reuters. (2019, July 1). One year from election, Mexicans give government poor marks on key issues: poll. Retrieved from Reuters: https://www.reuters.com/article/us-mexico-politics-poll/one-year-from-election-mexicans-give-government-poor-marks-on-key-issues-poll-idUSKCN1TW37A
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  18. United Nations. (2017). The Sustainable Development Goals Report. Geneva.
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  20. Webber, J. (2019, October 12). IMF says Mexico’s policies are hurting growth. Retrieved from Financial Times: https://www.ft.com/content/e5739928-ec58-11e9-a240-3b065ef5fc55

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