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The Mexico Competitiveness Report 2009
RICARDO HAUSMANN

Harvard University
EMILIO LOZOYA AUSTIN

World Economic Forum
IRENE MIA

World Economic Forum Editors

The Mexico Competitiveness Report 2009 © 2009 World Economic Forum, Harvard University

The Mexico Competitiveness Report 2009 is published by the World Economic Forum within the framework of the Global CompetitivenessNetwork. It is the result of collaboration between the World Economic Forum and Harvard University. Professor Klaus Schwab, Executive Chairman, World Economic Forum

World Economic Forum Geneva Copyright © 2009 by the World Economic Forum and Harvard University All rights reserved. No part of this publication can be reproduced, stored in a retrieval system, or transmitted, in any form or by any means,electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic Forum. ISBN-13: 978-92-95044-16-6 ISBN-10: 92-95044-16-9 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Printed and bound in Switzerland by SRO-Kundig.

EDITORS Ricardo Hausmann, Director, Center for International Development,Harvard University Emilio Lozoya Austin, Director and Head of Latin America, World Economic Forum Irene Mia, Director and Senior Economist, World Economic Forum

GLOBAL COMPETITIVENESS NETWORK Jennifer Blanke, Head of the Global Competitiveness Network and Senior Economist Ciara Browne, Senior Community Manager Agustina Ciocia, Community Manager Margareta Drzeniek Hanouz, Director and SeniorEconomist Thierry Geiger, Economist, Global Leadership Fellow Pearl Samandari, Coordinator Eva Trujillo Herrera, Research Assistant

THE REGIONAL AGENDA TEAM, LATIN AMERICA Arturo Franco Hernandez, Community Manager, Global Leadership Fellow, Latin America Antonio Human, Community Relations Manager, Latin America Nathalie de Preux, Senior Community Relations Manager, Latin America A special thank youto Hope Steele and Bill Hinchberger for their superb editing work and Pearl Jusem and Pierre Chassany for their excellent graphic design and layout. The terms country and nation as used in this report do not in all cases refer to a territorial entity that is a state as understood by international law and practice. The terms cover well-defined, geographically self-contained economic areas that maynot be states but for which statistical data are maintained on a separate and independent basis.

The Mexico Competitiveness Report 2009 © 2009 World Economic Forum, Harvard University

Contents

Preface
Klaus Schwab (World Economic Forum)

i

Part 2: Selected Factors of Competitiveness 2.1 Growth Diagnostic: Mexico
Ricardo Hausmann and Bailey Klinger (Center for InternationalDevelopment, Harvard University)

29 31

Executive Summary

iii

Ricardo Hausmann (Center for International Development, Harvard University), Emilio Lozoya Austin, Irene Mia, and Arturo Franco Hernandez (World Economic Forum)

2.2 Possible Impacts of Global Climate Change 49 Policy on Mexico and Other Developing Countries in Coming Years
Jeffrey Frankel (Harvard University)

Part 1: AnAssessment of Mexico’s Competitiveness 1 1.1 Assessing the Foundations of Mexico’s Competitiveness: Findings from the Global Competitiveness Index
Irene Mia and Emilio Lozoya Austin (World Economic Forum)

3

2.3 Mexico’s Impact on the US Labor Market: A Reason to Renegotiate NAFTA?
Robert Z. Lawrence (John F Kennedy School of . Government, Harvard University)

57

2.4 Small and Medium FirmLending in Mexico: Lessons and Current Issues

63

Rodrigo Canales (Yale School of Management) and Ramana Nanda (Harvard Business School)

2.5 Producing Superstars for the Economic Mundial: 71 The Mexican Predicament with Quality of Education
Lant Pritchett and Martina Viarengo (John F Kennedy . School of Government, Harvard University)

Part 3: Country Profiles
How to Read the Country...
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