| Some Thoughts
From A Middle Income Country |
| Living
In Mexico |
| by Jurgen Klemann |
| July 2005
Colima,
Mexico
For a little
more than a year already, there’s something like a construction boom going
on in Colima. Even though Colima is most unlikely to ever turn into a boom
town (which I’m very grateful for), loads of new shops have recently
opened up or are still being built. In the whole of Colima there’s exactly
one McDonald’s, which is more than I need. Now Burger King blesses
Colima with its fine cuisine as well. Nobody can claim any more that there’s
no competition at that end of the market. |
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| A little
more interesting to me is the arrival of El Globo in Colima. El Globo
may be characterized as a coffee shop chain that has operated in Mexico
since 1884. We may describe it as – more or less – the Mexican version
of Starbucks. When I still lived in Auckland Starbucks arrived. While the
taste of the coffee and the food there may be summarized as acceptable,
Starbucks’ prices in New Zealand aren’t acceptable. Starbucks just translated
its prices from US dollars into New Zealand dollars, which makes its stuff
quite expensive for New Zealand. For that sort of price there are more
one of a kind cafes available in Auckland, for example in Ponsonby and
Mission Bay.
Anyway, Colima
isn’t Auckland, which I’m very grateful for as well. Moreover, in terms
of both prices and quality El Globo leaves nothing to be desired. Yours
truly tends to be quite happy with the coffee and the cake there.
As a part
of that construction boom, a second restaurant has recently opened up in
the neighbourhood where I’m inclined to reside. That outfit prides
itself on specializing in tastes from old Europe. It doesn’t sound as if
Donald Rumsfeld runs the show there. Because it offers only dinner, I can’t
give it a go for my daily brunch. |
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| Never mind.
When things calm down there a little I may be tempted to grace it with
my presence on a Friday or Saturday night. At the moment, the outfit is
still packed out every night because it’s new. Sheep mentality has never
been my cup of tea.
Despite the
recent arrival of new cafes, restaurants and various shops, I don’t reckon
that Colima is going to lose its character. Colima is rather going to continue
with its slow pace and provincial flair. That’s just one reason why yours
truly is quite happy with his life and lifestyle in Colima.
Besides
new businesses Colima appears to be attracting a few more residents as
well, in particular home owners. My neighbourhood may be described
as rather posh with heaps of open space. Some of this space is currently
being filled with new residential constructions. It doesn’t really surprise
me. |
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Offshore
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| There seem
to be quite a few folks residing and settling down in Colima who don’t
suffer from serious financial difficulties, so to speak. On the other hand,
don’t get me wrong. Colima is located in Mexico, and Mexico is located
in Latin America.
As far as
I understand the situation in Latin America, the countries most characterized
by inequality and poverty are Brazil and Mexico.
When you see the guarded mansions on the western outskirts of Mexico City
and the slums on the eastern outskirts, you don’t reckon that they’re located
in the same country. When you see mansions in a few suburbs in Colima and
then areas that we may call diplomatically a little less elegant, it’s
hard to imagine that they’re located in the same town. About two centuries
ago, my valued fellow country man Alexander von Humboldt dropped the remark
:”Mexico is the land of inequality. Perhaps nowhere is there one more appalling
in the distribution of fortunes”.
Because yours
truly deserves to be called a little opinionated, I hold a few rather strong
opinions on what can be done to combat poverty and inequality. So called
direct approaches – e.g., social security benefits and subsidies – don’t
make me jump for joy. |
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| In the long
term that sort of thing may have the effect of drugs and alcohol.
They make
both folks and companies get used to them and create a mindset of dependence.
I’m more favourably
inclined to so called indirect approaches. By indirect approaches I mean
creating the right sort of economic framework as well as revamping the
country’s infrastructure. To illustrate all this with an example, it may
be a choice idea to push ahead with privatization programmes. A whole bunch
of state owned outfits – e.g. energy, steel, telecoms, airports, ports,
national airlines….could be privatized.
For the privatization
process, don’t hold a “beauty contest”. Run an auction instead. Governments
of less developed countries could thus generate heaps of revenues. |
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Offshore
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privatized will almost certainly gain efficiency. That approach also gets
the message across that foreign direct investment and foreign expertise
are welcome. That so called indirect approach may need a little more time
to produce results. But it will change the social landscape as well as
individuals’ mindset.
Middle Income
Countries
However, that
indirect approach may not be enough for so called middle income countries.
The World Bank distinguishes between three categories of countries: high
income, middle income, and low income countries. Most of Latin America
– including my current home turf Mexico – falls into the middle income
category. Geoffrey Garrett points out in Foreign Affairs that loads of
middle income countries have ended up in the doldrums. They can’t compete
in the knowledge economy of the developed world. They can’t compete either
in the low wage environment of low income countries.
Geoffrey
reckons that middle income countries must be empowered to compete in the
knowledge economy. To empower them to do so he figures that folks there
must be given access to education, in particular to education that transforms
them into sophisticated knowledge workers. Even though I tend to agree
with Geoffrey, the questions remains how that sort of education can be
provided.
Readers of
this magazine may be aware that the author teaches at one of the most prestigious
private colleges in Latin America. It’s safe to assume that that this outfit
contributes to transforming students into sophisticated knowledge workers.
However, the tuition fees at that outfit may resemble more or less the
annual income of the average Harry Up The Road. Families who can afford
to have their offspring attend that sort of outfit are a little thin on
the ground.
The idea
of doing foreign aid through grants instead of loans may have a few merits.
Among other things, these grants can be linked to good governance.
Some of those grants may even be used to enable students to attend colleges
whose tuition fees their folks can’t afford to pay. Another option worth
mulling over may be some sort of cooperation of the World Bank with the
private corporate sector.
It may not
surprise you to learn that I prefer those – a little off the beaten track
approaches – to getting governments directly involved. First, the involvement
of governments almost always leads to bloated bureaucracy, not to feasible
solutions. Second, besides bloated bureaucracy governments tend to produce
heaps of airy fairy drivel, but again no solutions. With a little imagination
and creativity, private sector solutions may be hammered out that look
a bunch more promising.
The following
is a list of articles written by Jurgen for the magazine:
To contact Jurgen
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