48% of the population is under 25, and many of them — over one million students — are now studying engineering and other technical subjects.
Mexico may not get the press of the BRIC countries, but it’s a market that should not be overlooked.
Already the 12th largest economy in the world, according to International Monetary Fund figures, it’s bigger than South Korea, Canada or Indonesia.
In 2011, the country grew approximately 3.5% and in 2012 the growth is projected to be 4%. As an energy exporter, the current high oil prices should also boost growth. By 2040 some forecasters predict it will crack the top 10.
Among the advantages Mexico offers investors:
- Free trade agreements with 44 countries and counting, giving it direct access to more than 60 percent of global GDP.
- A friendlier business environment than most hard-charging growth markets. The World Bank ranks it 53rd in the world, compared to 91 for China, and 132 for India. It’s also far ahead of the Latin and Caribbean average, which the bank ranks at 95th.
- A young and increasingly educated population. 48% of the population is under 25, and many of them — over one million students — are now studying engineering and other technical subjects.
- Rising incomes. With average per capita income at $15,121 in terms of purchasing power parity, according to the International Monetary Fund, Mexico is a consumer market with vast potential.
Challenges confronting Mexico’s economy
Of course, enormous challenges remain. As is true of many developing counties, Mexico needs better infrastructure and an improved regulatory regime.
But the biggest challenge faced now by this country of 112 million are the drug wars that have killed more than 47,000 in the last five years, according to government statistics — more people than the United States lost in Vietnam.
Although the violence continues, shunning the market would be a mistake. The degree of danger varies wildly between states, and as the experience of such formerly war-torn countries as Colombia suggests, when the war does wind down, the peace dividend will be high.
Indeed, the fact that the country is still able to grow respectably despite the mayhem suggests an underlying strength investors should not discount.
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