Another of these intangible things is how much your culture prizes education. India and China both have a long tradition of parents telling their children that the greatest thing they can be in life is an engineer or a doctor. But building the schools to make that happen in Mexico simply has not been done. India and China each have more than fifty thousand students studying in the United States today. They come from about twelve time zones away. Mexico, which is smaller but right next door, has only about ten thousand. Mexico is also right next door to the world's biggest economy, which speaks English. But Mexico has not launched any crash program in English education or invested in scholarships to send large numbers of Mexican students to the United States to study. There is a “disconnect,” said President Zedillo, among Mexico's political establishment, the challenges of globalization, and the degree to which anyone is educating and harnessing the Mexican public to this task. You would have to look a long time for a graduate science or math program at an American university that is dominated by Mexican students the way most are dominated by Chinese and Indian students.
The government of President Vicente Fox had set out five areas for reform retail to make the Mexican economy more productive and flexible: labor market reform to make it easier to hire and fire workers, judicial reform to make Mexico's courts less corrupt and capricious, electoral and constitutional reform to rationalize politics, tax collection reform to increase the country's dismal tax harvest, and energy reform to open the energy and electricity markets to foreign investors so that Mexico, a major oil producer, gets out of the crazy bind of importing some natural gas and gasoline from America. But almost all of these initiatives got stalled in the Mexican parliament.
It would be easy to conclude from just looking at Mexico and China that democracy may be a hindrance to reform retail. I think it is premature to conclude that. I think the real issue is leadership. There are democracies that are blessed with leaders who are able to make the sale and get their people focused on reform retail-Margaret Thatcher in England comes to mind-and there are democracies that drift for a long time without biting the bullet-modern Germany, for example. There are autocracies that really get focused-modern China-and there are others that just drift aimlessly, unwilling really to summon their people because the leaders are so illegitimate they are afraid of inflicting any pain-Zimbabwe.
Mexico and Latin America generally have “fantastic potential,” says President Zedillo. “Latin America was ahead of everyone thirty years ago, but for twenty-five years we have been basically stagnant and the others are moving closer and well ahead. Our political systems are not capable of processing and adopting and executing those [reform retail] ideas. We are still discussing prehistory. Things that are taken for granted everywhere we are still discussing as if we are living in the 1960s. To this day you cannot speak openly about a market economy in Latin America.” China is moving every month, added Zedillo, “and we are taking years and years to decide on elementary reforms whose needs should be strikingly urgent for any human being. We are not competitive because we don't have infrastructure; you need people to pay taxes. How many new highways have been built connecting Mexico with the U.S. since NAFTA? [Virtually none.] Many people who would benefit from government expenditure don't pay taxes. The only way for government to serve is get people to pay higher taxes, [but] then the populism comes up and kills it.”
A Mexican newspaper recently ran a story about how the Converse shoe company was making tennis shoes in China using Mexican glue. “The whole article was about why are we giving them our glue,” said Zedillo, “when the right attitude would be how much more glue can we sell them? We still need to break some mental barriers.”