Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
While stories about drug lords and illegal immigrants hog the headlines, Mexico is quietly building a middle class, and that’s a good thing for miners and investors.
The Woodrow Wilson Center for Scholars released a report, Mexico: A Middle Class Society.
While “middle class” is difficult to define, a host of economic indicators are climbing.
Gross domestic product per capita is up 40% since 1988—and the authors believe that GDP per capita is substantially under-reported. Life expectancy is better, climbing four years in just one decade, and child mortality and death by parastic illness are down sharply.
A rising middle class, writes the authors, will galvanize the economic progress Mexico has made.
“One of the great paradoxes of poverty is that those who live in it are often not aware of the risks of abrupt economic or political change–or at least, extremely poor individuals often lack the means to organize themselves to achieve political goals.
“People and families who have finally achieved some level of minimal economic comfort, on the other hand, tend to value stability and are more likely to reject—for better or for worse—any kind of change that could threaten what they have acquired.”
To illustrate growing middle class clout, the authors note that the number of independent voters (those who do not identify themselves with any one particular party) grew from 29% in 1989 to nearly 40% in 2007.
The middle class, especially a growing class of business people, is making Mexicans more civic-minded and more interested in protecting the gains they have achieved:
“[Business] people tend to develop a strong work ethic, search for new opportunities for their families, view competition as a natural part of life, and staunchly criticize the government and taxes.”
Middle class is relative. The middle class in Mexico, the authors note, is much different than middle class in New York. It is also difficult to define.
“The criteria established by The Economist leads one to consider as ‘middleclass’ anyone who consumes and possesses goods that are associated with middle-class behavior. Among them are a home, an automobile, consumer appliances (refrigerator, washing machine, computer, telephone), access to health care and recreational travel—in other words, all the trappings of a modern urban lifestyle.”
Comments
Brodie
The Canadian and American middle class which each built their economies has been trashed by free trade agreements made by greedy politicians and CEOs only to increase the Mexican and Chinese middle class, what a slap in the face to the millions who died defending and building these countries for the past 200 years and nasty legacy for our children growing up…..One good thing that may come out of all this is a decrease in immigration because both Canada and America are becoming third world countries with nothing to offer anyone.