The Aztec economy is emerging as the fastest growing in the next decade, despite the drug.
According to analysts, Mexico is on track to become the largest economy in Latin America.
Dominant economy in Latin America.
Mexico City, Mexico
Mexico could overtake Brazil and become the dominant economy in Latin America in the coming years, according to several analysts.
Despite the drug-related violence, Mexico is becoming a favorite place for foreign investment, especially by rising wages in China. "We anticipate that Mexico will overtake Brazil to become number one in Latin America 2022 ", supported by strong growth and increased productivity, Nomura analysts said the group, financial firm based in Asia.
Mexico grew by 3.9% in 2011 and its central bank expects to 4.25% this year. Brazil's growth fell to 2.7% last year and only 1.6% is forecast for 2012.
The slowdown is recorded after Brazil had "a golden decade" fueled by China's appetite for raw materials, after the Asian giant's entry into the World Trade Organization in 2001.
Meanwhile, Mexico is "at the beginning of a new era" in a time when more and more industries are established in its territory due to the rising cost of labor in China, says Nomura.
The Boston Consulting Group, a global management consulting, meanwhile believes that it is more attractive to manufacture in Mexico than in China.
"We believe this year (...) production costs in Mexico are the same or lower than in China," said Hal Sirkin, a partner at the consultancy.
Productivity
Average wages are calculated taking into account productivity, were 06.03 per hour in Mexico in 2010 against 2.72 dollars in China, explains. Reach 2015 dollars in China to 5.30 against 3.55 in Mexico. The fact that Mexico has a common border with the United States, the world's leading importer, currently helps, but it also means a risk in case of recession in the U.S. economy.
Marco Oviedo, Barclay's bank analyst, published an article on September 6 which highlights that after having lagged behind China in exports of the industrial sector for a decade, Mexico regained the lead in that category from 2008-2009 .
"We think this is probably structural change and sustainable," said Oviedo.
Exporter
Mexico became the fourth largest exporter of cars this year, and other industries are also growing, from aerospace to electronics, to telecommunications.
Since the beginning of the year, Nissan, Ford and BMW have announced plans to open new plants or expand production in Mexico.
Audi this month became the latest automaker to settle in Mexico.
The San Jose Chiapa, in the center of the country, will create 3000-4000 jobs and Audi provides an annual production of 150,000 vehicles from its plant opening in 2016. "This will allow us to send our cars duty free to the United States, Latin America and Europe," said Hans Uwe Werner, a spokesman for Audi.
"This decision will lower our costs, increase profit margins and give us a decisive advantage to customers," he said. Industries are still settling in Mexico although violence has left 60,000 dead in the past six years. "It's one of the issues of concern to companies," says Sirkin.
The violence has affected last year in Mexico's economic performance. The National Institute of Statistics and Information said earlier Thursday that crime had cost about 16.500 billion to the Mexican economy in 2011, representing 1.38% of GDP.
In the forecast for the next 10 years other factors come into play. The first has to do with that for six of those ten years the country will be governed by the PRI (Institutional Revolutionary Party) represented by its new president, Enrique Peña Nieto, who will have the challenge of combating drug trafficking, reduce violence and make the country more secure investment.
In any case, the Mexican example shows that the economy can thrive even amid insecurity.
[readon1 url="http://www.laprensa.hn/Secciones-Principales/Economia/Economia/Mexico-destronara-a-Brasil-en-2022#.UGrxcq7F-So"]Source:laprensa.hn - Translation by Suyapa Ajuria[/readon1]
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