A Journey to a New Developing World in Motion

Shanghai, May 16th 2009.- In the ranking of the countries Mexico used to rank in a medium level position. If seen as a classroom filled with students of different levels of performance, Mexico used to be in the world an average rather promising student during the sixties or the seventies. Mexico was never as good as the US, France or Japan, who in those decades were like the best students who got the highest marks, but Mexico was good enough to get B as an average grade. We didn’t have the largest economy or a perfect political system, but people talked about the Mexican miracle and we had internationally respected writers, such as Octavio Paz, or we even produced one of the best players the Spanish football has ever seen, Hugo Sanchez. In short, our B grades gave Mexico a certain reputation and allowed the country to stay in the classroom where only a limited elite of countries were allowed to attend. I am talking about the sixties and the seventies.

The outlook in this first decade of the 21st century is absolutely different. With the emergence of East Asia in the eighties the world has become much more competitive and this transformation has raised the standards for staying in the classroom of the elite. If getting only B in the past was enough to be respected, with our poor B we as Mexicans don’t have any longer guaranteed our position as a member of that club.

We as Mexicans have grown thinking that only Europe, Japan, Canada or the US are stronger countries or better places to live than Mexico. However, the reality of these years is that there are so many emergent countries that are developing systems or are enjoying trends that profile a coming world where those new countries will be stronger, more competitive or better places to live than Mexico. When that happens, Mexico will be officially forced to step out the elite classroom. Then we will be like second rate students and going back to the elite classroom will not be easy.

For all those reasons, I believe is important Mexico understands that these days there’s not only the developed world we are behind, but that there are other developing countries that are performing better than us. Clearly the purpose of this journey to this dynamic new developing world is not only to raise an additional sense of urgency to our country but also to get fresh lessons on what to do and how to do it that the developed world, especially the US, is now unable to deliver. The following is a bird eye look into some outstanding countries of this new developing world in motion.



A new developing world in motion.

A lot of Mexicans still believe Mexico constitutes, as one of the largest economies in Latin America, one model to emulate in the region and a country other Latin American countries tend to look up. Discounting the arrogance of that reasoning, probably nowadays that’s just not truth anymore. Either as a consequence of their particular development histories or as a result of recent struggles or specific policies, other Latin American countries, such as Brazil, Chile and Colombia are starting to ripe the benefits of past undertakings.

Among them the most impressive is Brazil. This is not the place to discuss in detail how all that history of autonomous development policies and all that energy is making Brazil, along with China, India and Russia, one of the largest developing countries and, as Parag Khanna notes in The Second World (Penguin Books, 2008) “The southern pole”.

Brazil is a very large country and it posses the population, the resources, the talent and the inspiration to become a truly heavyweight in this century. Only some words to get started: Ethanol, Petrobras and Embraer. Juan de Onis in the last years fall edition of Foreign Affairs mentions the following Brazil’s strengths: a) expanded exports; b) oil discoveries; c) financial stability; d) low inflation; e) growing foreign and domestic investment; f) booming consuming demand; g) social assistance focused in the neediest; h) diversified economy founded on strong sectors of oil, mining, agriculture and biofuels, and i) democratic political cohesion. (Juan de Onis. Brazil’s Big Moment. Foreign Affairs November-December 2008. p 110-122).

For all those reasons Brazil has become a country to take into account in the world stage but all if all those assets were not enough to thrive, Brazil strengths are being enhanced by a continuity in economic policies, stability in politics (Onis) and by a multidirectional diplomacy (Khanna, The Second World. p 155) that has made Brazil a champion in the international trade diplomacy (opposed to the subsidies of the US and Europe), and a founder of the club of developing nations G20.

There are so many Brazilian developments to comment, I only mention some that have called my attention: Brazil now directs half of its exports to developing countries; based in its discoveries of uranium, Brazil is one of the countries that is building the largest number of nuclear plants in the world and Brazilian cities such as Curitiba and Porto Alegre have become international models of environmental management.

Brazil is by far the largest Latin American country but it is still a country, as Khanna says, where “the first and third worlds visibly coexist”. In contrast, Chile has been considered the most likely Latin America to be part of the developed world. About Chile is worth mentioning that it has invested heavily in education and technology and as a result Chile is a country where poverty is below 15% of the population (Khanna, p 164) From Chile is also remarkable its foreign trade openness, its free trade agreements with the US, the EU and China and its rule of law and low corruption.

In a third place I include Colombia as an example of a Latin American country that is doing well. Colombia, as now Mexico, has suffered the curse of being an important part of the chain in the drugs international trade but this challenge has made the country, lead by its president Alvaro Uribe, to take harsh steps that are changing Colombia for good. As Khanna explains, “in Colombia, building the state and winning the war on drugs go hand in hand…” (The Second World. p 148) As a consequence of the war on drugs launched by President Uribe, Colombia has increased the reach of the state and also related to this war, Colombia has put in place social programs to provide an alternative livelihood for the population involved in the growing of coca leaf. Now Colombia has developed new strategies for the export of oil, coffee, bananas and flowers, is attracting European assistance to poverty alleviation and is seeking to establish “maquiladoras” specialized in exporting to the east coast of the US.

If surprising and worth of recognition is for Mexicans to learn about these developments in our Latin American cousins, more surprising would result learning that countries such as Kazakhstan has been called the Singapore of Central Asia for all the achievements it has attained since its independence from the Soviet Union in the 90’s, most of them supported by its well administered oil richness:

“Matching the ambition of the semi-authoritarian Asian tigers, Kazakhstan has established special economic zones and information technology parks and has turned biological-weapons plants into food processing factories. It also plans to utilize its enormous uranium reserves for nuclear energy. New regional airports and wide roads are restoring connections across the continental steppe.” (The Second World. p 90). It seems Kazakhstan is so surprising that it even has the most renowned business school in Central Asia, the KIMEP.

To the west of Kazakhstan, Turkey is also changing fast in part because of the economic contributions of its European diaspora as well as a consequence of a new founded Turkish identity, which no longer denies its Muslim heritage. One of the main consequences of that transformation is that Turkey is abandoning its over concentration in Western Europe and is embracing a new foreign policy in all directions. Economically, Turkey is recognized as an important actor in the Black Sea, the Caucasus and the Middle East in the same way as Istanbul has become, as Khanna says, a capital any techno music DJ can miss.

Several countries in the Middle East want also to joint the elite class of the developed world.

The Gulf Emirates such as Dubai has a technology cluster known as Media City and a “Knowledge Village (which) features micro-campuses of the world’s top universities” (The Second World. p 247). There are similar projects in Qatar, Kuwait and Saudi Arabia, countries that for the first time in history are investing most of its oil profits in the Arab world.

Even more complex countries such as Egypt and Lybia are following through.

Egypt, for instance, “has real plans to recapture its old historical glory” through the establishment of Peugeot and Mercedes factories, the construction of highways that link Alexandria to Aswan and a new financial center in what is called the New Cairo. (The Second World. p 193,194). Not less surprising, Lybia for example, “like Kazakhstan has created a Norwegian-style Generation Fund to invest in schools and hospitals...and like Colombia, it spends lavishly on top-tier international consultants to steer the privatization of agriculture and industries, restructure the banking sector, develop strategies for petrochemical plants and tourism, and retrain scientists from weapons programs to water desalination and petroleum geology...”(The Second World. p 187).

Explanations

In contrast with Cold War era when most of the developing world wasted most of its energies in civil wars, the above presented developing world is a world in motion that is struggling very hard to catch economically and technologically with the developed world, trying to build better countries for their peoples. It’s like if this world in motion has understood that what is important are not ideologies or abstract concepts, but the possibilities for their societies to enjoy the benefits of a cell phone, a fridge or the pleasure of driving a car. After decades of being marginalized from the elite classroom of the world, these countries are finally determined to get in and to enjoy the best the world has now to offer.

This very basic material ambition has given form in those countries to an also very basic development agenda, for the attainment of which, it seems, governments, private sectors, education institutions and societies at large all agree. In the above described countries, there is not a single formula or a single model to make these agendas truth. Among these countries, there are some democracies (Brazil, Chile, Colombia) but there are also some authoritarian systems (Egypt, Lybia, Kazakhstan). Something seems common to them: they are not blindly following models but instead they are adapting external expertise and advice to domestic experiences, allowing them to give birth to institutional arrangements that are working well.

Additionally, in general they are pursuing multidirectional diplomacies that are letting them to benefit from the emergence of Europe and China instead of only relying on the good opinion that the US Congress has of them. One last and crucial factor is that this new developing world wants the best and the newest in technology and they are doing as much as they can to purchase technologies or to facilitate technology transfers.

However, the most important thing, in my view, is that departing from a material ambition (catching up with the developing world, offering a better life to their societies, having better cities, faster transportation, faster communications, more beautiful cars) they are taking bold, creative, even risked actions to get what they want, what they feel they are entitled to (recapture, as Egypt, a past glory) and what their societies really have aspired for so long.

Anything to think about, anything for Mexico to learn from that diversified economy and that multidirectional diplomacy of Brazil, that transparency of Chile and that state resolution of Colombia? Anything for Mexico to envy of that new founded identity of Turkey, that business school of Kazakhstan or that Media City identity of Dubai? Should we also aspire to get back a past glory of Mexico, should we engage in building nuclear plants or should we do something to desalinate the water of our shores in the Pacific and the Atlantic Oceans? Should our government hire international consultants to improve our world image, to market our culture or to attract branches of Harvard?

Of course, Mexico has industrial clusters in Monterrey (investments in R&D, design for autoparts, aerospace and software), Guadalajara (computer and telecom hardware), Queretaro (manufacturing and design of aerospace manufacturing) where there are good trends (Businessweek, April 20, 2009) and it’s also truth that Mexican business are remarkable investors in Central and South America (Mexico looks to the South for business, www.cnnexpansion.com/expansion/2009/03/26/mirando-al-sur) but these lights are now considered islands in a Mexican universe of stagnation. And what is more important is that we are not seeing from the part of anybody in Mexico and especially from the government anything radical and bold that has the potential to transform our country. This lack of courage can be seen as a lack of responsibility for the future.

For the above reasons, the classroom Mexico attends has raised the requirements for its members. Kazakhstan, Colombia and most of the above mentioned countries are at the doorsteps of this elite and the bad news is that in this competitive world there is a limited membership and that’s why if Mexican government, society and entrepreneurs don’t do anything brilliant, bold, creative and risked, like building a nuclear plant, erecting a city of knowledge or building a fast train that connects Mexico to Monterrey in two hours, our new developing world competitors are going to kick us out of the classroom.