TACOMA, Washington — Before the arrival of Europeans in Central and North America, what is now modern Mexico was a congregation of ethnic and city-states with unstable boundaries. The influence of these relatively independent regions can still be seen today in Mexico’s diverse states, cultures and languages. Mexico’s economic development is similarly distinct in its recent industrialization and economic growth. However, levels of inequality and poverty remain high. Despite Mexico having the 15th highest GDP in the world, 42% of citizens live under national poverty. The cycle of poverty is one that has gone unbroken due to problems such as government corruption, violence and poor infrastructure. The same factors that created these issues continue to reinforce them today. Organizations are making efforts to break the cycle of poverty in Mexico.
In the 1800s, the country underwent a period of political instability largely due to financial stressors. It did not achieve peace until the dictatorship of Porfirio Díaz began in 1884. His policy toward poverty was the federalization of welfare, which ultimately only reached urban populations. It was a large reason why the stability ended with the 1910 Mexican Revolution. In the decades that followed, economic growth occurred, but poverty rates increased, especially in the wake of the 1980s economic crisis.
With each of these events, the government’s response, in general, was to improve social programs and macroeconomic policy targeting those living in extreme poverty. However, corruption in Mexico’s government has been a continuous and significant barrier to the effectiveness of these social programs. Although elections have been mostly free and fair since 2000 when the Institutional Revolutionary Party (PRI) lost its hold on the presidency, the World Economic Forum ranked Mexico 127 out of 137 on a 2017 list of corruption from the diversion of public funds.
Violence in Mexico
Organized crime not only related to drug wars but also includes kidnapping, robbery, extortion and assault. It is another barrier to reducing poverty in Mexico. Drug cartels increasingly recruit unemployed youths typically born into poverty. There has been debate about how to curb this. Former president, Felipe Calderon, supported a strategy of capturing and killing cartel leaders; however, critics believed investing in social and economic programs to lower poverty rates was a more comprehensive approach.
Dr. Pablo Piccato is an author and professor who specializes in Mexican history at Columbia University. He commented that, “in some regions, there is a lot of extortion by organized crime that creates a burden for small businesses, including street vendors,” in an interview with The Borgen Project. Furthermore, violence connected with organized crime also highly overlaps with high levels of political violence, curbing reforms. In the lead-up to Mexico’s 2018 presidential elections, drug cartels killed an estimated 130 candidates and politicians.
Infrastructure and Industrialization
When the first wave of industrialization and transportation improvement began in the late 19th century, the subsequent economic growth reverberated across urban areas. However, it failed to reach rural areas where the majority of those in poverty lived. Reforms after the 1910 Mexican Revolution included land grants to peasants in rural areas. However, many people living there then began to move to cities and seek industrial jobs that paid very low wages. Today, about 80% of the population lives in urban areas.
In the late 1940s, the “Mexican Miracle” began. This term references the country’s domestic development strategy, which resulted in an increase in the rate of economic growth each year, lasting until roughly the 1970s. Although Mexico achieved sustained economic growth during this period, it was still hampered by political unrest, exposing the deeply-rooted issue of inequality. Despite economic growth, the poverty rate continued to increase. One cause of this was poor infrastructure and the violence hindering its development. Dr. Piccato said, “there’s limited access to public goods because of security concerns… including education and health.”
Wealth Disparities in Mexico
Mexico’s uniquely high levels of inequality are a factor that underlies those listed above. It has existed and grown alongside the economic development of the late 19th and 20th centuries. Today, the disparity between the rich and the poor remains large as the availability of low-skill jobs has increased while wages have decreased. In contrast, Carlos Slim, the richest man in Mexico, has a net worth equivalent to approximately 5% of Mexico’s total GDP.
Despite these obstacles, Mexico’s recent approaches to poverty alleviation are innovative and unique. In 2004, Mexico became the first country to introduce a multidimensional poverty measure that considers the lack of economic resources and living conditions that limit peoples’ rights and freedoms, hinder social integration and prevent the fulfillment of basic needs. This index is vital to the collection of necessary data that will allow for the development of effective social and economic policies to alleviate poverty.
NGOs Break the Cycle of Poverty in Mexico
Additionally, organizations are working in local communities throughout Mexico to improve the living conditions of those in poverty. For instance, Enseña Por México mitigates the issue of student dropouts by providing education and leadership programs to children in communities where they otherwise would not have had access to such resources. Other organizations including Casa Hogar Alegría and Amigos de Los Niños are working to improve the lives of children living in poverty by offering shelter, job training and emotional and medical care.
To be truly effective, Mexico’s fight against poverty will need government reforms and an effective reduction in high levels of violence. However, the work of these groups, along with the adoption of the index integrating economic status and social rights, are just two factors that signify this ongoing fight to break the cycle of poverty in Mexico.
– Isabel Serrano