Biyernes, Mayo 15, 2015

Mexico's Folly, China's Glory: Lessons Philippines could Learn


Have you wondered why Mexico, a spit distance to the USA, is not as rich and powerful as Mainland China which is too far away to the No.1 economic power America?

The influx of U.S businesses from the U.S mainland became the linchpin of what is the Chinese economy today - No.2 economic juggernaut of the world.

Here’s my favourite book author and New York Times columnist Thomas Friedman who explained in a pedestrian manner why Mexico has been sluggish economically, and why the Chinese enjoyed its leapfrogging growth for several years.

“Mexico’s ranking in the Global Competitiveness Report actually fell while China’s rose. And this was not just about cheap wages, said (Neil) Rosen. It was about China’s advantages in education, privatization, infrastructure, quality control, mid level management, and the introduction of new technology.”

“So China is eating Mexico’s lunch,” concluded Rosen, “but more due to the Mexican inability to capitalize on success and induce broader reform than to China’s lower wage workers per se, ” stressed by Friedman.

According to the Doing Business Report, it takes, Filipinos listen, an average of fifty-eight days to start a business in Mexico, compared with eight in Singapore and nine in Turkey. It takes seventy four days to register a property in Mexico, but only twelve in the United States. Mexico’s corporate income tax rate of 34 percent is twice as high as China’s.

Rich Chinese
In terms of the length of starting a corporate business and the income tax rate, Mexico and the Philippines are almost the same.

Here’s what the Philippines could learn from China and India and avoid the folly of Mexico vis-a-avis education:

“India and China both have 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 zones away. Mexico, which is smaller but right next door, has only about ten thousand. Mexico is also right next 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.