Are Mexico's Best Days Ahead? Social Progress and the Future of North America

What does social progress actually look like inside one of the world's most watched and most misunderstood economies? Michael Green sits down with Sofía Ramírez Aguilar, Director of México ¿Cómo Vamos?to dig into where Mexico really stands on quality of life, what the Social Progress Index reveals across all 32 states, and why the story is far more nuanced than the headlines suggest. 

From the happiness paradox to the three critical gaps holding Mexico back — public safety, basic education, and healthcare, to the Shared Prosperity Map that puts U.S. and Mexican states on the same quality-of-life scale, this is a conversation about what North American integration actually looks like on the ground.

Plus: why foreign direct investment follows social progress scores, what teen pregnancy rates in Oaxaca vs. Chihuahua reveal about the limits of aggregate data, and Sofía's optimistic prediction for the decade ahead.

Chapters

00:00:00 – Introduction & What México ¿Cómo Vamos? Does

00:02:15 – Mexico's Happiness Rankings & Social Progress Reality Check

00:05:48 – The Three Big Gaps: Safety, Education, Healthcare

00:10:33 – The Shared Prosperity Map of North America

00:12:37 – Quality of Work vs. Employment as a Social Progress Driver

00:18:59 – The Two-Way Relationship Between Growth and Social Progress

00:20:39 – State-Level Data: Guerrero, Chiapas, Oaxaca & Closing the Gap

00:23:00 – Teen Pregnancy as a Window Into Different State Realities

00:27:41 – Laredo/Nuevo Laredo: Social Progress at the Municipal Level

00:29:33 – Why Investors Follow Social Progress Scores

00:34:12 – Supply Chains, Integration, and the States Being Left Behind

00:36:15 – Sofía's Prediction: A Decade of Real Progress in North America

Follow Sofía Ramírez Aguilar and México ¿Cómo Vamos?: 

Website https://mexicocomovamos.mx 

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Transcript

SPEAKER_00 0:00

Hello and welcome to Beyond GDP, the Social Progress Podcast, where we look at the world from a different perspective, through the lens of the needs of people and planet, rather than power and profit. I'm Michael Green, CEO of the Social Progress Imperative, and in today's episode we're going to be talking about Mexico. It's a large, populous country, importantly geostrategically, and one that faces some fascinating challenges. Join me in this conversation. I'm delighted to have Sofia Ramirez, the CEO of Mexico Como Vamos, who's been a partner of SBI for many years. Sofia, welcome. Tell us a bit about what m Mexico Como vamos does.

SPEAKER_02 0:49

Well Mexico Como Vamos is this rather small think tank based in Mexico City that is very involved within the economic discussion in Mexico. But it's been just 11 out of those 14 that we've been considered a major think tank, even though we're small in size. We share economic information with the broader public, say journalists, just regular people. This is something very important to us because the biggest part of our of our community belongs to women. Our followers are mostly women below 34 years of age, which speaks a lot about how we are implementing, you know, this strategy of talking about economic terms, but for you know, decision making for regular people. And then there is this other public which we're talking to, which are the enterprises, all-size enterprise. Most of the bigger ones have also a chief economist within their firm. But, you know, like SMEs don't do that. They don't have the money and the cash and the time to analyze the economy. Therefore, we talk also to them. Um so everybody makes better decisions and has a better informed way of doing stuff every day.

SPEAKER_00 2:09

Well, I have to say the the the the work you do in communicating economic ideas and economic data is brilliant. So I recommend to anyone to visit the Mexico Command's website to have a look at how to do communication about economics and economic policy issues. No I appreciate that. Um Now look, the I remember the listening to the late great Swedish statistician Hans Rosling, and he had this story that he used to teach at a medical school, and he would give his students a quiz about development statistics, and they would always be thirty years out of date. And he made this point that since our perceptions of the world lag behind the reality. And I think for our audience here, most people aren't from Mexico. So I think thinking about this as an audience of outsiders, I want to get into understanding where Mexico is now. And I think, you know, we also know that Mexico perhaps has a northern neighbor that doesn't always talk about Mexico in a very positive way. But I want to frame this by having a look at some numbers I did, very rough calculations. And uh I worked out that on its current trends, Mexico would overtake the United States on social progress in about twenty, twenty-five years' time. So real quality of life in Mexico could be better than the US in twenty or twenty-five years' time. I don't claim any great science behind that forecast, but it's just an extrapolation of current trends. Does that sound ridiculous to you? I mean, where do you think Mexico is heading?

SPEAKER_02 3:35

Well, I think I think Mexico has always been this country that everybody expects a lot of out of it, both domestically and internationally. And I just want to tell you a very brief anecdote. I used to be American. I was born in the States, and at some point I always lived in Mexico. I just was born there because of my parents studying there. I started working at a civil servant at the Mexican government. And it's logical that whenever you grow within the ranks, you have to choose either nationality. So I chose Mexican and it was the best decision ever in my life. Um it's a very good thing to be Mexican. I love Mexico. I love living and working here. I've uh lived abroad in Australia, in the US, in Germany, and I always come back very happily to Mexico. And I think it has to do with many things. One, of course, is the sun and the climate. But the other one is the way things work, the people, the community. And I think Mexico has preserved a lot of those family values, which have, of course, a dark side in the sense that women are supporting the whole economy with their non-paid labor. I am aware we need to address that, not at some point, but currently as well. But it has a lot with happiness to do. If you see, if you see the happiness, international happiness report um for the last couple of years, you see Mexico keeping the happiness levels that other countries are losing. Therefore, Mexico has been ranking in the top 10 uh happiness um top 10 countries with the most happiness within their population. And I think this can also be translated to the uh social progress index, which of course shows a lot of how things in in specific areas are still missing the point of bringing well-being to Mexican, such as, for example, security. Public safety is one of the biggest challenges, of course, not only because it's important for the people, but it's also important for the economy. And in Mexico, seven out of ten pesos of people come from their labor. Therefore, it's not something bad that the economy grows other way the other way around. We have seen that the more the GDP grows, the more the social progress index also grows because the quality of life um improves. So, what I think Mexico is doing alright is actually taking care of people, not only in the narrative, but also in the facts. We are lacking um a more dynamic economy, of course, and we're also lacking in specific topics. See, we are moving fast forward in the social progress index in a sense for of um going very deeply into advanced education, which means that a lot of people are having more social mobility due to advanced education levels. But on the other hand, we're defunding basic education, and therefore we're compromising the future uh generations um in terms of okay, we are doing fine right now in the area of advanced education, but we need to not lose track in addressing also all the problems that might be around the basic education. So the third topic I think besides public safety and education needs to be addressed in Mexico in order to comply with the expectations of being that great country, not only in the future, but also in the near future, is um health. Healthcare is one of those things that in Mexico is very linked to your labor status. And as an emerging market, Mexico doesn't have necessarily good quality jobs for everybody. We measure that through the informality rate in the labor market, which is most more than half 55%, around 55% of people who work, they do it within the informality. And that means at the very bottom that they don't get any social security, nor access to healthcare. Of course, there is universal healthcare, but you can imagine it's less funded than the one that belongs to the people who have a formal employment. So I think healthcare, basic education, and public safety are those three big topics that need to be improved and need to be talked about so that we can probably be a more prosperous uh country, not only country, but also region. If I'm seeing the figures, for example, for North America, I see that the SPI score was on average 82 points, which of course makes the uh highest among the highest regions with a highest score. But if you if you think about the US and Canada, they are more ranking very more closely to the first 30, 35 uh positions than Mexico. Mexico is in the position 75, and that's um a huge lack we need to, you know, close. And and at some point, we should also think about Mexico being part of that region, because usually, whenever you talk about North America, you think Canada and the US, and most part of the Mexican country belongs also to the uh North America. We've calculated with with the SPI, with uh social progress initiative, also this shared prosperity map in which we have the index at the state level, the social progress index at the state level. You know, like the map is awesome because you see how the southern part of the country of the US and the northern part of Mexico, but also the western part of the country and both peninsulas Baja California and Yucatán, we share pretty much the same quality of life. And therefore, you see that the you know, like trade integration we've been working on for the last 40 years, it hasn't just been that. It's not only trade, not only co-production, it's been also sharing a model in which we can improve the quality of life of people. And then you see also at the you know micro level how the uh picture is doing. And we've seen, for example, that there are some topics in which Texas might not be ranking as good as some other parts in Mexico. Um, I'm just talking about Texas because this is such a big economy. But of course there are some other states at the southern part of uh the US in which you can look at it and say, okay, probably Mexico City and some other Mexican states might have a better quality of life than some of the US states. And there is what you where you why not only me, but so many expats from the US, from Canada, from Europe are living down here in Mexico because we're much more than the violence that is projected within the media. The quality of life is way higher for people who have a steady income. And challenges are there, but I think we are heading in the right direction in the sense of the regional integration. And as you said, we need to think uh within the long term, not just saying, okay, what's happening in the next two to three or four years. We need to think about what we've been working on for the last 40 and and not lose track.

SPEAKER_00 10:52

Thank you. I really want to um uh emphasize the work that you've done on that shared prosperity map. One of the great things about working for SPI is that we work with partners who have brilliant ideas. And the idea of integrating two data sets, one for the states of Mexico, one for the states of the US into a common framework to compare them is something that you know Mexico Commodus proposed, and it's a terrific tool. I think we'll we'll put a link on screen for people to look at that one. I also just want to emphasize something I think I I you mentioned earlier about work, and certainly that's something we see in the data increasingly across all territories, is about the quality of work. So it's not whether people have a job or not that seems to be correlated with social progress, it's the quality of the work. And getting people decent work that comes with the proper benefits, etc., is so critical to drive sort of inclusive and sustainable growth. But am I mad? Do you think Mexico can achieve US levels of social progress in 25 years? Is it possible or am I nuts?

SPEAKER_02 11:51

No, I think we do. I think we do. Um we need to also invest a lot. Mexico has a tradition of not necessarily investing in infrastructure, but more in social programs. I'm not saying that is, you know, as an idea, a wrong thing. What I'm saying is if you would like to have a more dynamic economy which offers better quality jobs, and that's the reason why I stated that seven out of ten pesos from Mexican households come from the quality of labor, then you will have the capacity of offering the people that live here a better quality of life. So again, if we think in the larger term, not just in the immediate term, we will probably come back as a region. And when I say we will come back is because of course the turbulence within the uncertainty in the international trade arena right now is of course everywhere. Well, it's hitting Mexico really hard because we've been investing in this automobile sector for the last 40 years, and this is the one that's being more dismantled. And of course, there are some other sectors which are growing. But in the experience, what we've been seeing is that every industry that has been linked within the North American region for this co-production model of not only vehicles, but for example, this last year we've been seeing how much improvement there is in the trade of computers or engines and that kind of thing. Um, that means that we are still going to be here glued on the side within within the North American region. And therefore, we think we will come back with some other sectors offering that kind of quality of labor that has been offered for by the automotive sector for the last uh 10 years. So I I really think Mexico is in the right track, but we need to invest, and the investment needs to come, you know, more particularly focused on the topics that we are missing or lacking. For example, logistics. We need to invest in the quality of our ports and and more airports and more cargo capacity, but also um on the roads, you know, like in the model of transport in North America is through the roads, and the roads need to have some maintenance and that kind of thing are topics that usually Mexico doesn't really talk about. And when we do, it's just because there is a huge hole in the major road which is breaking the engines of the vehicles. But I think we need to invest in logistics. We need to invest also in more capabilities or in the right capabilities for the people that are already working here. For example, we need to figure out how to how to you know incentivate people to learn English and to learn those tools that might be helpful in this AI environment. Of course, before working with AI, you need to know how a computer works. And a lot of people have been just jumping that step and and being able to communicate and and do business and also get hired through the phone. That's okay with me. I just say that those are the topics that we really need to invest on because it's not that this new generation is going to be ready to substitute everybody who's working right now. So we need to insert people from different ages or from different socioeconomic backgrounds within this trend of, you know, more digitalization, but also more use of AI within the economy. So going back to social progress, why doesn't matter? Because if you have a better quality job, that means you're going to have a better access to those services that actually enable the rights that measure the social progress. Of course, there is the spending of the state. We need to figure out how to do that better because it's not that we're not spending, it's we it's that we are probably spending it in an efficient way. But I think I think this is this is something that's already happening because this discussion is here. We we are very aware that we need to invest, and I think also the government knows that without investment there is not going to be productivity growth, and without productivity growth, there is no way that the labor income is going to go higher. I think this is very clear how the wheel turns, and I am very optimistic that this is actually what is happening because again, integrated social progress map of North America, you it's it's awesome when you want to see how the integration of the supply chains also show the integration of people and the integration of quality of life. And that's something, it's not an opinion, it's just there, and you can just see it.

SPEAKER_00 16:42

Yeah, no, it's it's a terrific piece of work. And I think a bit regular listeners to the show will have heard me say this before that, you know, one of the things we talked about with, you know, our chief academic advisor on the social progress index, Michael Porter, was how there's a two-way relationship between economic growth and social progress. But social progress also is a driver of economic growth. And I think some of the things you talked about in terms of you know community and you know, those kind of quality of life, qual civic strength of Mexico is actually going to be another thing that's gonna help drive the economy as well. These are economic assets, not just social assets. But look, let's uh let's move on. I wanted to, I mean, Mexico is a big place, and you've created the social progress index for the states of Mexico, which to break that down. I think we've know as well that that spatial dimension is so important that you can have very large disparities across a big country like Mexico. We don't have time sort of to dig into all the sort of details of the states. All that data is available online. But tell us a bit about how you've used data at the state level on social progress to engage with policy makers and businesses to drive change in Mexico.

SPEAKER_02 17:50

That's a that's a great question. Thank you very much for making it because actually that's what we work for. See, in the southern part of the country in Mexico, we have those three states which we are regularly behind in practic practically every data set regarding quality of life, not only in the SBI, but also if you see, for example, poverty or lack of access to quality services of education or basic access to healthcare or that kind of thing, there's always Guerrero, Chiapas, and Oaxaca, they're always behind and they're always lacking. So the thing is we've been also seeing that even though we are moving along towards a better quality of life across all 32 states in Mexico, we've seen that those three countries, even though they are lagging and they're not catching up fast enough, they're catching up a little bit. So there the cla the the gap between the highest ranked state, which is Mexico City, and the lowest ranked state, which is usually Guerrero, is closing. And this is amazing news because we need to go and see what are we doing alright, and what are we doing not so good, and what can we do at a faster pace. So I want to talk about Oaxaca. Oaxaca is not the one at the bottom, but it's one of the three to four less, well, one of the four least with the lowest quality of life in Mexico on average. And and then you see, okay, that there are like more than 40 variables that we take into account to make the calculus of the social progress within Mexico. And one of those variables is one of um, you know, the ones that amazes me the most because, for example, you see that Chihuahua. Chihuahua is one of the border states in the northern border of Mexico, which has a very industrialized industrialized economy. And this variable which I want to address is what's it called? This variable is um pregnancy, teen pregnancy. Team pregnancy is one of the major problems in in Chiapas, Oaxaca, and Guerrero, but I'm going to look at Oaxaca, but also in in in Chihuahua in the northern part of the country. And the reasons are different. Why is it Oaxaca? Why is it that Oaxaca has such a high team pregnancy? Well, it's because there are lack of opportunities and people tend to have children whenever they don't don't don't get a return of their investment in education. Therefore, people don't really go that many years to school, and it makes sense that they have more children. They probably marry or just get together, and that's say a plan of life. But then in the northern part of the country, in Chihuahua, we have a very high think pregnancy rate, and this responds to something different, which is the dynamics of how Chihuahua has been bringing people from internal migration to work within the industries, and therefore the social tissue might be a little bit more broken in some areas, and this brings a lot of problems. One of these is teen pregnancy, because those are girls that just have children by themselves and keep on working at uh low wages, but their children grow and do exactly the same. So I think talking to the state level and addressing those topics with uh uh you know high-ranking officials within those two states, particularly in Oaxaca, has been of a major uh benefit for the local discussion. I think Oaxaca is one of those states in which we've been asked for to not only talk about but to um explain this kind of phenomena, not only to the government, but also to the private sector, so that there might be a change. And within this closing the gap between the states at the lower part of the distribution, which are in the southern part of the country, with the northern states that are in the higher end of the distribution in the social progress index, well, they don't make the same mistakes. So I think the private sector in Mexico. Has been using the social progress index majorly. And they are so happy to be able to, you know, take the measures, talk to local governments, but also make the changes within the industries so that they can address the problems as such in the northern part where the industrial industrialization is taking place, but also in the southern states in which the gap is closing and which are going to have some more industrialized problems in a very short period of time. It's not that the industry is coming to the south. The south has another economic charisma because there is not enough energy and probably there is a different logic of production. What we are actually seeing is that they are improving the quality of services such as tourism. So even though the diagnostics might be different and some variables might be the same, you can also always learn from your neighbor from what they've been doing right and wrong, and that's helpful. And there is this other example, which been we've been working also with the Laredo Nuevo Laredo region, which is one of the most used customs for trade within the US and Mexico. It's been for longer periods of time, even busier than the LA port, so it's huge. And the local authorities have been calling us year over year to try to make a comparison at the municipal level. So the problem with the data is that we don't have enough data to do the calculation at the municipal level for the social progress index. But what we have learned at the state level index and what we can try to do the calculation at the municipality level, well, that has been very helpful for the local authorities to try to draft a program on how to address the local programs, the very local pro problems such as housing, where and how are houses being supposed to be, and also schools and also hospitals, because this is a region that is growing massively. And they do have trouble with safety and they need to invest in logistics, but the social part they have been relying a lot in in this you know urban drawing of where they see themselves in 10 years, in the social progress index and in the variables that feed the index at the municipal level with the help of México como vamos. So those are two examples that might be useful to, you know, see that the social progress index, it's not just an academic, very nice academic discussion. It's about changing people's lives and and how economic actors interact with each other.

SPEAKER_00 24:49

Absolutely. I mean, I think creating, you know, academic products is not of interest to any of us. I think it's can we create products that are actually useful in driving change? And I love that insight about teen pregnancy, how you could have an issue of teen pregnancy in two different states, but actually the the driver behind it could be different based on the different two different contexts, and that getting behind that context is so important. I just want to um ask you a little bit more, because I can see why public bodies, women are interested in some of these issues. And you talked about businesses. But how are why are businesses and investors engaging with this data and what are they doing

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SPEAKER_00 25:27

with it?

SPEAKER_02 25:56

Well, it's it's amazing how you just see the graphs of for FDI, for example, announcements, not only

(Cont.) Are Mexico's Best Days Ahead? Social Progress and the Future of North America

SPEAKER_02 26:06

the investments that are being done, but because it takes time, but you know, every time you make an uh affording direct investment announcement, it means already that you've thought about it, you talk to the government at the local level, not only at the federal level. You've seen probably where you want to make the investment and what you want to do. Say it's uh manufacturing or it's the energy sector or it's computing. I mean, you can actually see how the picture is doing. So we've been graphing the social progress index and the FDI announcements. And it's glorious how you see that the more you have a better quality of life from the social progress index, say you have a better position within the ranking on the 32 states in Mexico, the more you have announcements of FDI and they are bigger ones. So this is probably just one angle of how to see the picture, but we think it's particularly important because again, investors at the domestic level probably see some other problems that see that are not the same as the foreigners, foreign investments, which are more like in the long run. So you can actually say, okay, it's because there are the conditions in those states where there are being more announcements that allow that people have better quality of life. But we think it also the other way around. We think that probably whenever you are an international investor, you are competing or you're thinking about investing in Mexico, but also you're thinking about investing in Asia or in Africa or some other place. So if you decide to invest in one particular country, in one particular state, you do have a business plan, but that business plan should include also, okay, how are the people that are going to work for me, where are they going to live and how are they going to live? Because not everybody's bringing their own their own workers. Mostly, well, there is always a representative of a the international firm, but at some point you try to um you know employ everybody that already lives there, or to pull people from their own country where you're investing and and and to allocate them within a community. And then is where the SBI comes to life. And then we see that people with uh better, of course, water services, sewage services, housing services, um healthcare, education, opportunities such as the access to, you know, rights that allow freedom of speech or freedom of information or better relationship to the government. Those are the states that are attracting foreign direct investment more prone and more with more clarity than the states that are lagging within the social progress. And it's also so rational because as a foreign investor, you don't want to go where there is still trouble in, you know, like figuring basic stuff out. Um and I I think this is also a major alarm for those states that probably have been doing okay in terms of attaching their providers or being part of the um supply chains in North America, but haven't been able to increase their quality of life. I'm particularly talking about states such as Puebla, Guanajuato, Hidalgo, and then then you see, for example, Guanajuato. Guanajuato has a super incredible position in terms of the geographics, um, has uh higher education ranks, and there are a lot of things that work okay in Guanajuato, but they have a major problem in public safety. So therefore, okay, they get some investment announcements, but the SBI ranking is not really going up. And on the other hand, well, the investment announcements might just be that announcements. So I think this has been very impressive, a very impressive wake-up call for the local governments, but also at the federal level, for the federal government, they're they're very much looking into this kind of analysis, this kind of graphs, because we've done different types of analysis also with uh supply chains and with exports at the state level and so on. And the result is always the same. The more integrated within the supply chains, international supply chains, the states are, the higher the quality of life is. And the explanation again is through the quality of labor and the quality of services that are available, of course, because if you have big investment within the region, you're going to have better taxing and of course better quality of services. And also this big, you know, tourists that are expecting to demand from local governments better quality of the basic services. So it's it's an amazing um you know machinery that works around um how private investment, public investment, and then again the quality of services that people are um being able to have that moves the wheel, and the ones that are doing better will be doing better. The ones that are lagging behind are closing the gap, but they need to close the gap quicker, but they already know what they're lagging.

SPEAKER_00 31:28

I think that was a brilliant exposition about why social progress isn't a cost, but investments in social progress are investments in competitiveness and economic future success, which is so important. We're we're almost out of tower time, but um no one escapes the Beyond GDP podcast without making a prediction. So, Sophia, anything you like, it can be about economics, it could be about Mexico, it could be about anything you like. But give me a prediction.

SPEAKER_02 31:54

So I think I am very, very optimistic that over the next decade Mexico can translate economic integration into real social progress. So my prediction is we're not just building a lay a larger economy, but more uh an inclusive region, a resilient society with North within North America. So my prediction is we'll be we we will be able to, you know, in the next 10 years, all uncertainty regarding the trade partnership and the migration topics and the security topics, which this prediction doesn't say that the that the you know like uh irritants are not always going to be gone. Of course, in any marriage, in any human relationship, not to say in country-to-country relationships, they are there are always going to be some topics that need to be addressed, but very, very optimistic in terms of what's happening in the next decade. So I really see that it's not only economic growth that is going to happen, but that the social progress is also going to be uh have a major advancement because we're going to have better quality of education, healthcare infrastructure. I s I think um security, this is this is the one service that cannot be given to the private sector by any means. You you can have the highest income but still not be able to pay for security. Well, I think I think security will always need to be one of the priorities because whenever you have progress, whenever you have um uh prosperity, we'll you will always need to address security because there is going to be some risks regarding that one. But the prediction is that we're going to have a major economic integration and uh real social progress integration within North America in the next decade.

SPEAKER_00 33:49

I love it. Concrete, falsifiable, and also positive. It's very easy to make negative predictions, but a nice positive prediction. I love it. Sophia Ramirez, CEO of Mexico Commodore, thank you so much uh for being our guest today. I really, really enjoyed this and I've learned a huge amount. So thank you so much.

SPEAKER_02 34:07

Thank you, Michael, and pleased to be here.

SPEAKER_00 34:09

Great. And uh check out the Mexico Commodore Virus website, it's excellent. Uh and thank you all, everyone, for listening to Beyond GDP, the Social Progress podcast, and we'll see you again for another episode soon. Goodbye.

SPEAKER_01 34:20

If you want to learn more about going beyond GDP, Social Progress Imperative has the tools to help you. Our flagship, Global Social Progress Index, covers 170 countries with data going back to 2011. Through 57 different indicators, the Global Social Progress Index gives you a rigorous and comprehensive assessment of how countries are performing on real quality of life, as well as trends over time. Get in touch through our website if you want to know more. They say that what gets measured gets done. So let's measure better and build a better world.