Stereo Sucking Sounds
Thomas Friedman points out that globalization runs downhill:
I hadn’t been to Mexico since 1996, so it definitely caught my ear when I started to hear two non-Spanish words on this trip that I’d never heard here before: “China” and “India.” Mexicans are increasingly aware that these two countries are running off with jobs and markets that Mexicans once thought they owned. You have to feel sorry for the Mexicans: they are hearing “the giant sucking sound” in stereo these days — from China in one ear and India in the other. Worse, they seem stuck, unable to forge a coherent strategic response.
“We are caught between India and China,” remarked Jorge Castañeda, the former Mexican foreign minister who just decided to run for president in 2006. “We have lost about 500,000 manufacturing jobs. It is very difficult for us to compete with the Chinese, except with high-value-added industries. Where we should be competing, in the services area, we are hit by the Indians with their back offices and call centers. . . . Not enough people here speak English.” And that’s not all. While China and India each send tens of thousands of students to be educated abroad every year in science and engineering, particularly in the U.S., Mexico sends just 10,000.
Go into any discount store in Mexico and look at low-priced clothing, toys, shoes and electronics, or even some Christian religious objects, and it is hard not to buy Chinese, added Mr. Castañeda, speaking at the Mexican Council on Foreign Relations. But more important, “the U.S. markets that we had a corner on is where we are losing jobs. . . . We knew it would happen when China [entered the World Trade Organization in 2001], but we did not get prepared.”
The good news is that Mexico has raised itself to the level where it’s no longer at the bottom of the food chain. The bad news–or, at least hard reality–is that doesn’t mean they get to quit striving.
Why? Because while Mexico upgraded its competitiveness, notes the analyst Daniel Rosen in the journal The International Economy, China upgraded worker education, infrastructure, management skills, technology and quality controls even faster.
Will Rogers said it a long time ago: “Even if you’re on the right track, you’ll get run over if you just sit there.” Mexico has put itself on the right track. But for the moment, it’s just sitting there. If it doesn’t start moving again, it’s going to get run over by China, India, America — or all of the above.
Such is life in the modern economy.
