The Next 100 Years

particularly the Mexican population in the borderlands. Serious foreign pol­
icy issues will then arise. Add to this picture soaring energy prices, and all of 
the catalysts for the crisis of the 2080s are in place. 
m e x i co’s e co n o m i c d ev e lo p m e n t
Mexico’s economy is currently ranked fifteenth in the world. Since its eco­
nomic meltdown in 1994, it has recovered dramatically. Mexico’s per capita 
GDP, measured in terms of purchasing power, is a little over $12,000 a year, 
which makes it the wealthiest major country in Latin America, and places 
Mexico in the ranks of developed, if not advanced, economies. And we have 
to remember that Mexico is not a small country. It has a population of 
about 110 million, making it larger than most European nations. 
Will Mexico’s economic strength increase substantially over the next 
sixty or seventy years? If it does, considering its starting point, Mexico would 
then become one of the world’s leading economies. Given Mexico’s internal 
political instability, outflows of population, and history of economic prob­
lems, it is difficult to imagine Mexico in the top tier of nations. But it is 

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equally difficult for most people to understand how it has already risen as 
high as it has. 
There are several things working in Mexico’s favor economically. The 
first is oil. Mexico has been a major oil producer and exporter over the last 
century. For many, that is an argument against Mexico becoming a major 
power. Oil exports frequently undermine the ability—or appetite—of a na­
tion to develop other industries. It’s therefore important to understand one 
other fact about Mexico: despite the surge in global oil prices since 2003, its 
energy sector actually represents a declining portion of Mexico’s overall 
economy. Oil constituted about 60 percent of Mexico’s exports in 1980, but 
by 2000 it was only about 7 percent. Mexico has oil reserves, but it doesn’t 
depend on oil exports to grow. 
The second factor in Mexico’s economic growth has to do with its prox­
imity to the United States—the same thing that will later pose a geopolitical 
challenge. Mexico—with or without NAFTA—will be able to export effi­
ciently into the world’s largest and most dynamic market. While NAFTA 
cut the cost of exports and increased the institutional efficiency of the rela­
tionship, the fundamental reality is that Mexico’s proximity to the United 
States has always given it an economic advantage, despite the geopolitical 
disadvantage that goes with it. 
Third, there are massive amounts of cash flowing back to Mexico from 
the United States in the form of remittances from legal and illegal immi­
grants. Remittances to Mexico have surged and are now its second- largest 
source of foreign income. In most countries, foreign investment is the pri­
mary means for developing the economy. In Mexico, investment by foreign­
ers is being matched by foreign remittances. This remittance system has two 
effects. It leverages other sources of investment when it is banked. And it 
serves as a social safety net for the lower classes, to whom most remittances 
flow. 
The inflow of money into Mexico has meant a growth in technologically 
based industry and services. Services now account for 70 percent of Mex­
ico’s GDP, and agriculture for only about 4 percent. The rest is made up of 
industry, oil, and mining. The proportion of services centered around 
tourism is relatively high, but the mix as a whole is not typical of a develop­
ing country. 

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There is an interesting measure, created by the United Nations, called
the human development index (HDI), which charts global standards of liv-
ing, including factors like life expectancy and literacy rates. The HDI di-
vides the world into three classes. On the map that follows, black represents
the advanced industrial world, medium gray indicates the middle- tier and
developed countries, and light gray shows the developing world. As the map
shows, Mexico already ranks with Europe and the United States on the hu-
man development scale. That doesn’t mean it is the equal of the United
States, but it does mean that Mexico cannot simply be viewed as a develop-
ing country.
When we drill deeper into the HDI, we see something else interesting
about Mexico. Mexico as a whole has an index of 0.70, which puts it in the
same class as the United States or Europe. But there are enormous regional
inequalities within Mexico. The darker areas on the map below have rank-
ings equal to some European countries, while the lightest areas are the equiv-
alent of poorer, North African countries.
This tremendous inequality is exactly what you would expect to see in a
country in the process of rapid development. Consider the descriptions of
Europe written by Charles Dickens or Victor Hugo. They captured the
essence of nineteenth- century Europe—tremendous growth amid inten -
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Mid-level Industrial
Undeveloped Industrial
Levels of Economic and Social Development
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sifying inequality. In Mexico, one can find that contrast in Mexico City
or Guadalajara. But one can also see it regionally, contrasting the relative
wealth of Mexico’s north with the poverty of the south. Inequality does not
mean lack of development. Instead, it is the inevitable by-product of devel-
opment.
It is interesting to note in this map, of course, that the areas bordering
the United States and the tourist regions in the south—as well as Mexico
City—are at the highest levels of development. As one moves away from the
U.S. frontier, the HDI declines. This indicates the importance of the
United States in Mexican development. It also reveals the real danger facing
Mexico—which is an insurgency in the south fueled by its inequality. This
inequality will intensify as Mexico develops.
There is one other important factor driving Mexico’s growth: organized
crime and the drug trade. In general, there are two types of crime. One is
simply distributive and consumptive—someone steals your television and
sells it. The other creates large pools of capital. The American Mafia that
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