Mexico possesses the characteristics of an emerging market economy, with its gross domestic product (GDP) per capita and Human Development Index (HDI) hovering on the brink of developed status. Despite challenges like widespread poverty and unequal access to basic necessities, the country's economic growth and development have shown promise.
Basics
Mexico meets the criteria of an emerging market economy, standing on the threshold between developing and developed nations. Its GDP per capita, though surpassing most peers in the developing world, falls short of the benchmark for classification as a fully developed country. The same holds true for its HDI, reflecting its proximity to developed status but falling slightly short.
Economic Disparities and Strides
In comparison to developed nations like the United States, Canada, and Australia, Mexico contends with substantial pockets of poverty and regions lacking fundamental amenities such as clean water and quality healthcare. However, Mexico has made commendable strides in elevating the quality of life in its marginalized areas.
Mexico's GDP Trajectory
A hallmark of an emerging market economy is a robust economic growth rate, a characteristic Mexico embodies. While its year-over-year GDP growth experienced fluctuations during the global recession and subsequent recovery, Mexico demonstrated strong growth until 2014. Despite some deceleration in the years following, Mexico's 2019 GDP amounted to $1.3 trillion in U.S. dollars.
Emerging vs. Developed Economies
Developed economies adhere to specific criteria. The gross national income (GNI) per capita of a developed nation must reach at least $12,535 in U.S. dollars, significantly higher than the world's leading economies at $30,000 and above. A HDI of 0.8 or higher is another hallmark of developed countries.
Qualitative aspects, such as widespread access to clean water, healthcare, and nutritious food, further differentiate developed nations from emerging ones. Developed countries may have pockets of poverty, but they lack extensive regions of severe deprivation.
Mexico's Status
Mexico's per-capita GDP falls slightly short of the $12,000 threshold for developed classification, registering at $9,946 in U.S. dollars as of 2019. Its most recent HDI calculation, also from 2019, stands at 0.779, just below the 0.80 benchmark for developed nations. Despite this, Mexico ranks 74th out of 189 countries, surpassing the average of developing nations.
The pace of Mexico's development is the defining feature of its status as an emerging market economy, rather than its current state. While significant poverty exists, it has shown signs of receding rather than expanding. However, the COVID-19 pandemic has temporarily reversed this trend, impacting global progress.
Conclusion
Although Mexico's economy is not fully developed, its trajectory suggests potential progress, particularly with new trade agreements with the United States and Canada. Mexico exemplifies the essence of an emerging market economy. While it has transformed into a robust manufacturing economy with interwoven business ties with the U.S., challenges persist. Notably, the international drug trade remains a prominent contributor to violence and corruption across the nation.