Mexico’s North-South economic divide weakens slightly in 2009

The rapid rates of economic growth in recent decades in the north of Mexico has led to a pronounced economic north-south divide, mapped and analyzed in some detail in chapter 14 of Geo-Mexico: the geography and dynamics of modern Mexico.

In 2009, this divide weakened slightly. However, this was not so much a case of the south catching up but more a case of the north stumbling in its progress, due to its heavy reliance on economic ties to the USA.

Northern border states, where manufacturing is important, saw their GDP fall by more than 10% on average during 2009, according to Banamex’s Regional Economic Activity Indicators (Indicadores Regionales de Actividad Económica), published in mid-March. This decline in GDP was accompanied by a fall in employment and also by a significant fall in remittances sent home from Mexican migrant workers in the USA. It should be remembered, however, that these states all experienced marked rises in their GDP in the years immediately prior to the worldwide economic downturn.

No fewer than 29 of Mexico’s 32 states (counting the Federal District as a state for simplicity) saw their GDP decline in 2009. Only 3 states—Zacatecas, Chiapas and Oaxaca—bucked the trend and saw a rise in their GDP in 2009. In the state of Zacatecas GDP grew 1.6% (helped by a resilient construction sector), in Chiapas 1.1% and in Oaxaca 0.8%. It is noteworthy that none of these three states is particularly well integrated into the global economy. As a result, what was happening outside Mexico’s boundaries had little effect on their economic progress.

The list below gives the % change in GDP during 2009 for a sample of states, alongside the national average for comparison:

Zacatecas           + 1/6%
Chiapas               + 1.1%
Oaxaca                + 0.8%

State of México       – 5.6%
Jalisco                     – 6.0%
Federal District       – 6.4%
Querétaro               – 6.3%

National average    – 6.7%

Tamaulipas            – 7.8%
Nuevo León           – 9.3%
Baja California        -10.5%
Chihuahua              -13.6%
Coahuila                -14.4%