Opinion Archive

What to Make of Mexico’s Diverse States

April 2, 2008

Mexico is a land of snow-capped volcanoes, deserts, coniferous and tropical rainforests, of glistening cities, grey slums, colonial gems and pre-Colombian pyramids. Topographically, architecturally, and in socioeconomic terms, it is a country of contrasts. These changes show in the diversity of its states and are also manifest in their growth and development. But rather than converge, different states and regions are living different realities. While these differences threaten to create all sorts of problems for the country in the medium-to-long term, they also present opportunities that should be taken advantage of, both in terms of tourism and in terms of investment (foreign and domestic).

The inhabitants of the Federal District and Nuevo León (home of the most Americanized Mexican city, Monterrey) have GDP per capita figures approximately five times those of Oaxaca and Chiapas, the country’s poorest states. Mexico’s richest states have similar levels of development to the poorest American states, while its least developed regions compare to Iraq and Bolivia.

It has become a truism among many analysts that the “rich” Mexican North is pulling away from the “poor” Mexican South thanks, in part, to the former’s ability to take advantage of NAFTA. The reality is much more nuanced than that. To begin with, the fastest-growing state is Quintana Roo (+8.4% in 2007), which borders Central America. The other stars in the top five are Baja California Sur, Nayarit, Aguascalientes and Querétaro. All of them grew well above 5% in 2007 and none of them are border states. In fact, the Mexican state that grew the least, Durango (0.8%), is more of a “northern” state than any in the top 5.

The example of the central state of Guanajuato is especially interesting. A traditionally poor state with bad infrastructure, it had the distinction of being one of the main sources of migration to the US. Beginning with the PAN governments in the mid-1990s, it declared itself “open for business”, increasing its infrastructure and doing its best to replace its declining shoe-making industry with new sources of growth. Today, León is a bustling medium-sized city with a top-notch hospital complex that seeks to take advantage of the opportunities offered by medical tourism. Its colonial cities, like San Miguel de Allende and Guanajuato are a must for any well-traveled North American; safe and well connected by air and land.

All marketing should be local

In terms of tourism, these challenges also represent an important opportunity. By branding destinations separately, downplaying the “Mexico” and highlighting the local, “safe” cities like Guanajuato and Los Cabos could avoid the stigma related to the violence in border cities, the capital and Acapulco. Regional marketing strategies could make places like Yucatán, Veracruz, or the Bajío, destinations on their own, bypassing the bad publicity that comes with crime and demonstrations. The fact that many more secondary cities like Querétaro and Aguascalientes now have international airports and excellent toll highway connections should make the Ministry of Tourism rethink its hokey “Visit Mexico” strategy. An “all Mexico” strategy is not only simplistic; it also means that bad publicity in one area affects the whole country. So, when Oaxaca had its problems, it was fundamental for Chiapas to promote its stability. When Baja California has issues, Sonora needs to play up its differences, etc.

Similarly, the “selling” of Mexico as an investment destination needs to be diversified and targeted. With over $23 billion dollars of Foreign Direct Investment in 2007, Mexico could promote its states and regions á-la-carte, offering better educated but more expensive industrial workers in Aguascalientes versus cheaper labor in the southeast. Thus, Nuevo León would compete with the similarly-developed Czech Republic, while Chiapas could be favorably compared to Guatemala.

Mexico City-based decision-makers must break from their centralized mindset. Too often, people in the capital see Mexico in general terms, doing the country a disservice. The country’s current situation is complex. It is suffering from a rise in violence as narco-traffickers are persecuted in several different parts of the country. It has social “movements” that often make the news, damaging the country’s reputation. But it is also a large country with plenty of local success stories that never get played up. Mexico’s states are very different and they need to start branding themselves differently. They need to create distance between their local realities and the bad news that is often reported as being representative of the country as a whole.

Mexico is not going to stop serving up nasty surprises. Hence, both the private and public sectors should take advantage of the differences that exist in a country with 105 million diverse people, four seas, 32 states and nearly 2 million square kilometers of extremely varied territory.

For the latest thought-provoking article by Agustin Barrios Gomez please go to our Opinion Column page

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