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"That Was Then. This Is Now: Time to Update Perceptions (about Mexico)," Dallas Federal Reserve CEO and President Richard W. Fisher said in his prepared remarks for delivery at the Mexican stock exchange Wednesday.
While he said Mexico is doing a lot better than the United States in many economic indicators, he cautioned that monopolistic practices, abysmal tax collection practices, organized-crime violence and an education gap are preventing Mexico from reaching its potential.
He laid out the financial crises Mexico went through in the 1980s and 1990s, and said: "As a result of these past crises, some people have negative perceptions of Mexico. And negative stereotypes take a long time to change. I believe it is time to change our perspective on Mexico."
He said fiscal and monetary reforms "place Mexico on an exemplary plane. Not only is Mexico doing better, macroeconomically speaking, than the false stereotypes would have us think, Mexico is actually doing better than the United States in many macroeconomic areas."
He said, "This may come as a shock to those Americans who tend to look at Mexico solely through the lens of immigration or drug trafficking, or whose most benign perception of Mexico is gleaned from lying on a beautiful beach sipping a margarita in Punta Mita."
He said, "From a macroeconomic standpoint, Mexico's future is bright; its prospects keep improving. Sadly, one cannot say the same about the present macroeconomic trajectory of El Norte. U.S. industrial production is still not back to prerecession levels, but Mexico's industrial production passed its prerecession peak at the end of 2010. Mexico ran a budget deficit of 2.5 percent in 2011, compared with the U.S. figure of 8.7 percent. Mexico's national debt is small, at 27% of GDP; in 2011, the U.S. debt-to-GDP ratio was 99% and is projected to be 106% in 2012 as the national debt passes $16 trillion."
Insofar as education goes, Fisher said, "One concern that I have about Mexico's long-term growth prospects is that Mexico ranks second to last in the OECD in high school completion rates; only 45 percent of Mexican students who enroll in upper secondary school graduate. Meanwhile, fully one-quarter of all Mexicans aged 15 to 29 are neither in school nor in the labor force."
Fisher, who grew up in Mexico City, interspersed his speech with references to Mexican film star Cantinflas and with a picture of what Mexico was like in the 1950s.