Where is Mexico?

Economically, I mean. We all know where Mexico is geographically right? Well, maybe it's more complicated than you think.

Meet the axolotl - pronounced ACK-suh-LAH-tuhl (in English), though every eight-year-old girl in Nova Scotia already knows that. They can also tell you it lives in only one place in the wild: Lake Xochimilco, just outside Mexico City. Don’t worry if you’ve never heard of it - if you’re over the age of twelve and not currently obsessed with glittery amphibians that look like smiling water dragons, you’re excused. But you might also like to know that the axolotl has the superpower to regrow almost every part of its body and those fury ears are actually external gills.

The axolotl is cute enough to derail any serious conversation, but in this case, it fits perfectly. Because like Nova Scotia and Mexico, it reminds us that rare and wonderful things only thrive in just-right conditions.

So what can Nova Scotia learn from places like Mexico, Italy, Greece, or Mississippi? It’s about seeing how bad systems can trap good people, how wealth gets extracted instead of reinvested, and how calling something an “investment” doesn’t make it one.

Real progress and prosperity—the kind that leads to babies, businesses, and belief in the future— is not just growth, that’s the logic of cancer, it requires institutions regular people can believe in, that create conditions for people to flourish, not just endure.

What can Nova Scotia learn from some of the most troubled Western economies... Mexico, Italy, Spain, Portugal, Greece? What are they doing wrong and how can we STOP doing those same things?

Overview insights and deep-dive data on global economic conditions are available from the IMF, World Bank, OECD, and the UN. This is where I got the research for this post.

Now, I put that upfront because, at least on my social media, some folks harbour conspiratorial suspicions about organizations like the IMF, World Bank, OECD, and UN, often seeing them as instruments of global control, financial manipulation, or ideological influence - bureaucratic meddlers who distort markets at best, New World Order type overlords at worst.

So you can take or leave any of what follows.

Why Are Greece, Italy, Spain, and Portugal Relatively "Poor"?

These countries, you can’t help but notice represent the Southern European economies. And when we say relatively poor it’s often meant in contrast to the Northern European economies. Despite their rich histories, stunning landscapes, attractiveness to tourists, and strong cultural appeal, these countries have struggled economically due to:

Stagnant Productivity & Rigid Labor Markets

• Southern European countries tend to have high unemployment rates (especially youth unemployment) and rigid labor laws that make it difficult to fire or hire workers.

• A strong culture of job protection counter-intuitively often discourages innovation and flexibility.

Debt & Weak Public Finances

Italy has one of the highest public debt levels in the world (~140% of GDP). 100% is considered a reasonable limit. When combining federal and provincial debts, Nova Scotia has the highest combined debt-to-GDP ratio among the provinces at 96.8%, while Alberta has the lowest at 42.9%.

Spain & Portugal were hit hard by the 2008 financial crisis, requiring bailouts or harsh austerity measures.

Public spending is high, but economic growth has been too slow to compensate.

Most importantly maybe, we have to think of the Euro-Zone Crisis which began in 2008. The adoption of the euro on March 1, 2002, initially brought stability, investment, and lower interest rates to Italy, Greece, Spain, and Portugal, fueling economic growth in tourism, real estate, and infrastructure. However, cheap credit led to excessive debt, wage inflation outpacing productivity, and the loss of currency devaluation as a crisis tool. When the 2008 financial crisis hit, these weaknesses were exposed, leading to deep recessions, high unemployment, and EU-imposed austerity measures. Unlike Germany and Northern Europe, which benefited from the euro’s stability, Southern European economies struggled with stagnation and debt crises, as they lacked the flexibility to adjust their economies independently. My opinion is that the 2008 crisis just revealed the inevitable. The economies of Southern Europe, especially the Greek Mediterranean region were never going to operate at the same economic speed limits as the Northern region - the Nordic countries and the newly unified Germany with its foundational industrial base.

Without a floating currency under the Euro they were handcuffed to the door handle of a big Mercedes E55 AMG W210 Wagon headed out on the Autobahn. Nova Scotia has been in the same situation in the Canadian currency for almost 100 years.

Overdependence on Tourism & Traditional Industries

• Tourism is a massive sector in all three countries - 15% to 20% of GDP, but it’s seasonal and vulnerable to shocks (like COVID-19).

• Manufacturing is present but lags behind Germany and Northern Europe in efficiency.

• Innovation and tech industries are less dominant than in Northern Europe.

Low Birth Rates

• Fewer young people means a shrinking workforce and greater pressure on social services.

• Youth Unemployment: Even educated young workers struggle to find stable jobs, leading to a "brain drain" where the most skilled leave for Northern Europe or beyond.

• Dependency ratios are increasing, meaning more retirees relative to workers.

• We can make it complicated or simple but to turn on the old Yogi Berra expression “If people don’t want to go to the ballgame, you can’t stop them.” Likewise, if people don’t want to have babies… you can’t stop them. Governments around the world have been giving it everything they’ve got to prove Yogi wrong, but sometimes things are just true. I will definitely be coming back to this theme again in other essays but I hit it pretty hard here.

Bureaucracy & Corruption

• Italy and Spain, in particular, have reputations for bureaucratic inefficiency and slow legal systems.

• Corruption and political instability have also slowed progress.

• Weak judicial systems make contract enforcement and business disputes more cumbersome than in Northern Europe.

Southern Europe is not "poor" in absolute terms, but it struggles due to high debt, low productivity, inefficient institutions, and unfavorable demographics. Without structural reforms, these economies will likely continue to lag behind their Northern European counterparts.

Recognizing the weaknesses of GDP/Per Capita as a measure of wealth and “poorness” we can also look at things like the HAPPINESS INDEX. These rankings are based on factors such as social support, healthy life expectancy, freedom to make life choices, generosity, and perceptions of corruption, safety, friendliness, and crime. I say perceptions because there is surprisingly little connection between these things and what people think of these things.

Spain, Italy, and Malta just to name-check another Southern European country rank 38th, 40th, and 48th respectively. Greece and Portugal don’t make the top 50. For comparison Ukraine is ranked 70th in the 2025 survey, Canada is 18th, while the Northern European countries are perpetually, it seems, the happiest in the world.

Where is Mexico?

In the 2025 World Happiness Report, released just this week, Mexico achieved a significant milestone by entering the top 10 happiest countries globally for the first time, securing the 10th position. This advancement reflects improvements in various factors contributing to national happiness, such as social support, income, health, freedom, generosity, and the reduced concern about corruption and violence.

That has to be read carefully. Corruption and violence in Mexico show no signs of improvement. But humans are resilient creatures. We can get used to anything. Mexicans in particular consistently rank high in social connectedness, family support, and personal optimism, which might outweigh concerns about corruption and violence in self-reported happiness surveys.

While Mexico has attempted anti-corruption reforms, enforcement remains weak, and Transparency International still ranks Mexico among the most corrupt nations in Latin America. They are tied with Nigeria in 140th place, which leads me to a couple other housekeeping points.

First, it’s interesting to note that as of today the UN recognizes 195 countries - well, 193 plus two ‘observer states’ Vatican City and Palestine. If you narrow that list to countries that are indisputably countries - meaning virtually no one disputes that they are countries. Sorry, Greenland, Puerto Rico, Gibraltar, etc. there are about 180 universally accepted, fully sovereign, undisputed nations.

So, 140th is still pretty bad. But the larger problem is the notion that Mexico is among the most corrupt nations in Latin America.

Where is Mexico? The question that has baffled tourists, geographers, and overly confident pub trivia teams for centuries.

It’s in North America, except when people say it’s in Latin America, which somehow includes parts of South America but not all of it, and also Central America, which Mexico is definitely not in—even though it looks like it should be on the map because it is in the middle and what is middle if not central. It’s a big part of Latin North America. All Central America is Latin America, but not all Latin America is Central America—kind of like how all squares are rectangles, but not all telenovelas are set in Guatemala.

Latin America is a feeling—it stretches from Tijuana to Tierra del Fuego, united by colonial scars, Catholic saints, love, music, and style. It speaks Spanish, dances salsa, and writes magical realism. Central America is where the dead bloated corpse of Karl Marx and the CIA meet for dinner.

Mexico borders the U.S., so it’s clearly not South America, but it speaks Spanish, so some assume it must be. It was in the North American Free Trade Agreement and then the name was changed to USMCA - the United States, Mexico Canada Free trade agreement. Which is in tatters now with tariffs but even when it worked both Canada and Mexico tended to rearrange the letters to put their country first. However, the name never mentioned North America at all.

Meanwhile, speaking of Canada, it is also in North America, and absolutely not in Latin America, except for Quebec, which is defiantly French, which technically makes it more Latin than Belize, which is in Central America but speaks English, so it’s not Latin America at all. Confused? I am! The truth is, Mexico is both here, there, and everywhere (did you know that in Mexico Mexico is officially called"Estados Unidos Mexicanos", which translates to "The United Mexican States") and is always exactly where we left it—south of Texas, north of Guatemala, and right in the middle of every confusion about what Latin America even means.

Geopolitics is about who’s in charge and why, while economics is about who gets what and how. One plays chess, the other plays Monopoly. If they were parties Mexico would be an honoured guest invited to both.

In George Friedman’s The Next 100 Years, he pinpoints “in-between” countries—Mexico, Poland, Turkey, Japan—as the future’s power players, not because they dominate today, but because they sit at the crossroads of tectonic shifts in geopolitics and economics. They're not the biggest names on the global marquee yet, but they’re standing at the velvet rope with VIP passes in both hands.

If geopolitics and economics were rival parties, Mexico would be the guest that shows up to both, shakes hands with the generals and the bankers, eats all the shrimp, and somehow leaves with everyone’s phone number. On the geopolitical side, Mexico is cozied up next to the world’s reigning superpower (hello, USA), shares a vast land border, and will inherit strategic importance as U.S. global reach starts to contract. On the economic side, Mexico is on the rise thanks to nearshoring, trade agreements, manufacturing muscle, and a youthful, growing workforce. It speaks the language of markets and military logistics.

So while traditional powers are busy arguing over who gets to DJ the global order, Mexico’s in the kitchen cooking up relevance, serving tacos with a side of soft power, and making deals that taste like the next century.

But back to the economics…

Why Is Mexico’s GDP So Low?

Mexico’s low GDP per capita, despite its rich history and vast natural resources, is a cautionary tale in economic development, governance, and global trade dynamics. While it shares some problems with Nova Scotia—such as economic dependence on external forces and wealth extraction by multinational corporations—Mexico’s challenges are far deeper, systemic, and historically entrenched.

Despite being the 15th largest economy in the world by total GDP, Mexico's per capita wealth remains relatively low. As of the latest data from the World Bank and IMF (2023 estimates), Mexico's GDP per capita is approximately $11,700 USD which compares to Nova Scotia as we analyzed in the previous post (linked here) at about $42k USD.

In pure dollar terms, Nova Scotia’s GDP per capita is about 3.5x higher than Mexico’s nominal figure, though the gap narrows to about 1.8x when adjusted for purchasing power. So while Nova Scotia earns more per person, Mexico stretches its pesos further.

While direct comparisons between Nova Scotia's GDP per capita and Mexico's GDP per capita are challenging due to differences in currency and cost of living, these figures provide a general sense of the economic standing of each region.

The reasons for Mexico’s economics can be boiled down to five major factors:

1. The "Middle-Income Trap" – Stuck Between Cheap Labor and High-Tech Growth

Mexico industrialized after the North American Free Trade Agreement (NAFTA) in 1994, becoming a manufacturing hub for automobiles, electronics, and machinery. However:

• It remains dependent on low-wage, low-skill labor rather than advancing into high-tech industries like South Korea or China.

• Productivity has stagnated—factories assemble goods but don’t innovate or move up the value chain.

• Domestic wages remain suppressed because companies optimize for export competitiveness rather than internal demand.

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2. Widespread Corruption and Institutional Weakness

Mexico has a corruption problem on every level—from municipal governments to law enforcement to national politics. Corruption drains wealth and reduces trust in government, institutions, courts, and the economy. Examples:

• Cartels control vast portions of the economy—from agriculture to fuel theft to real estate.

• Bribery and inefficiency slow business—getting permits, starting companies, or engaging in trade often involves under-the-table payments.

• Public funds are frequently mismanaged—leading to inadequate infrastructure and social services.

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3. Chronic Violence and Cartel Influence

Unlike Nova Scotia, Mexico faces extreme violence tied to organized crime. The drug trade isn’t just a criminal issue—it’s an economic one:

• Cartels siphon economic productivity by extorting businesses, taking over industries, and driving skilled workers out of the country.

• Tourism, a major economic driver, is affected by crime rates—fewer investors and visitors means slower GDP growth.

• Violence discourages investment—businesses relocate operations to safer countries.

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4. Wealth Extraction and Foreign Control of Industry

Mexico, much like Nova Scotia, does not fully benefit from its own economic activity:

• Multinational corporations dominate manufacturing and retail—big brands like Walmart, Ford, and General Motors control the market, while much of the profit leaves the country.

• Mexico is resource-rich but doesn’t benefit fully—its oil industry (Pemex) is mismanaged, and mining companies (often foreign-owned) extract minerals with little return for the local economy.

• Remittances (money sent home from Mexicans abroad) outpace many industries—Mexico’s economy is propped up by money sent from workers in the U.S., not by its own job market.

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5. Education and Workforce Limitations

Mexico has a large workforce, but it lacks widespread education and skills development:

• Low literacy and education rates mean that many workers are stuck in low-wage jobs.

• Skilled workers leave the country—many of Mexico’s best-trained engineers, doctors, and entrepreneurs move to the U.S. or Europe.

• Government investment in education is low—which prevents a transition into a high-tech economy.

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How Does This Compare to Nova Scotia?

Nova Scotia does share some economic challenges with Mexico, but on a much smaller and less extreme scale:

Where Nova Scotia is Better Positioned Than Mexico

Nova Scotia has better governance—while bureaucratic, it is stable and transparent.

It has a well-educated workforce—but needs to keep its talent from leaving.

It lacks serious crime issues—so investment is safer.

Where Nova Scotia Shares Mexico’s Problems

Wealth extraction is a serious issue—multinationals profit off the province, but locals see little benefit. We say we don’t have corruption but we have delusions that are just as bad. We’ll often say that anything is an investment when it is nothing of the kind. Government “invests” in a stadium for pro sports. Ford ‘invests in a new car dealership and service centre in one of Southern Nova Scotia’s lobster towns. Ikea is “investing” in Dartmouth Crossing Mall. Saying ‘investing’ gives the impression that they are coming here to give us something. Nothing could be further from the truth. Multinational corporations, banks, and bigbox retailers don’t come here to give us something. They come to take our wealth as fast as we can create it.

Case Study: The Story of The First Truck

I’ve repeatedly write versions of this story but I’ll keep going. Skip it if you’ve heard this one before, or not, I’m genuinely trying my best to make this, if not poetic, at least poignant prose.

The process is the opposite of elegant in its simplicity, a wealth extraction so frictionless it would make a vampire blush. A young lobster fisherman, fresh off a season hauling traps and stacking cash, walks into Smith and Watt Chrysler on Water Street in Shelburne, conveniently close to the harbour, smelling of salt air and false pride. He doesn’t need a Dodge Ram 3500 with chrome accents and a suspension package built for terrain he’ll never see—but he wants it. And that’s what matters. The dealer, trained in the dark arts of financing, doesn’t just sell him a truck; he sells him a monthly payment, stretching just far enough to keep him working, sweating, and dreaming, but never quite ahead.

The wealth he created—the capital that could have gone into a better boat, new gear, or maybe even an investment that works for him—vanishes in an instant. The truck rolls off the lot, and so does the money. It’s wired out of town before the ink on the loan agreement dries. The profits flow to some corporate headquarters, the interest payments to a national bank, the insurance premiums to a firm in Toronto, and the warranty plan to some faceless offshore entity. The only thing that stays behind is the debt.

The town gets just enough: enough to keep the dealership open, enough to pay a few wages, enough to keep the fisherman alive and turning traps. But never enough to make him think twice next season. Because when the next payout comes, he won’t be investing in a future—he’ll be trading it in for a new model, a bigger trim package, a Bluetooth upgrade that won’t make the sea any kinder but will make the payments last longer.

And let’s not forget the real beauty of the scam—the truck isn’t just an instant wealth siphon; it’s a recurring expense generator. Every mile he drives is a fresh withdrawal from his future.

This isn’t some beat-up, fix-it-yourself pickup like his grandfather’s. This is a rolling financial liability, a machine designed to look tough but demand loyalty—not from the driver, but from his wallet. The gas alone is a second mortgage. The dealership made sure he got the biggest engine package (you gotta have that Hemi, bro!)—a monster on the road and an absolute parasite at the pump. Every trip to the wharf bleeds his earnings straight into the oil cartels, and by the time he’s back in town, he’s already half a tank down.

But it doesn’t stop there. This truck doesn’t break—it malfunctions in ways only a certified technician can understand. Gone are the days when a local mechanic with grease-stained hands could keep a truck running forever. Nope, this beast needs a dealership repair bay, an official diagnostic scan, and parts shipped in from a logistics warehouse that only exists in a spreadsheet. The service bills aren’t just high—they’re designed to make trading in for a newer model seem like the cheaper option.

So now, in addition to the loan, the insurance, and the ever-climbing cost of diesel, he’s locked into a permanent cycle of high-tech, high-cost repairs. The nearest dealership is an hour away, but that’s just the price of driving a truck this nice, right?

The fisherman keeps working. The payments keep flowing out of town. The local economy gets just enough scraps to survive, but never enough to change. The truck was never just a truck—it was a perfectly engineered wealth extraction device, a machine designed not for fishing, not for work, but for keeping money moving up the chain and away from the people who actually earn it.

A bailout / handout economy

The economy is heavily dependent on outsiders—Mexico relies on remittances and U.S. trade, Nova Scotia relies on federal transfers and outside corporations.

There is a lack of economic dynamics—neither place has made the leap from resource-based and service economies to high-tech wealth creation. Nova Scotia is almost entirely industrialized.

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Bottom Line Lessons from Mexico for Nova Scotia

1. Local Value Creation Matters → Relying on foreign companies or governments to sustain the economy leaves you vulnerable to outside forces. Nova Scotia, like Mexico, needs to own and control more of its wealth creation and investment. Yes, that includes banking.

2. Brain Drain Must Be Stopped → Just like Mexico’s best minds leave for the U.S., Nova Scotia’s talent moves to Ontario, Alberta, and the U.S. Keeping educated, skilled workers home is crucial.

3. There’s a baby problem that can’t be solved by tricking immigrants to come here. There’s only one real solution to Yogi Berra’s dilemma about not being able to stop people who don’t want to go to the ballgame…

   It’s like Yogi Berra might’ve said (but didn’t… this is just what I’m saying):
   “The only way to get more babies is to be the kind of place where people feel so good about tomorrow, they start making plans for nine months from now.”

   Because you can’t birth your way out of a baby shortage in a place no one can happily raise a baby.
   People don’t have kids when the rent’s too high, the schools are full, they don’t have a doctor, there traffic chaos, everything is ugly, including the prospect of getting a mortgage on a nice house in a nice comfortable neighbourhood, and the jobs are “seasonal.”
   They have kids when home feels like forever.
   It’s not just about population growth—it’s about our emotional GDP.

   You want more strollers? Build more future.

4. Regulations and Bureaucracy Need to be Efficient → Mexico’s corrupt system is an extreme case, but Nova Scotia’s red tape and siloed government departments can also look a lot like corruption far more famous, stifle growth and drive businesses elsewhere.

5. Small Changes Can Have Big Impacts → A small increase in high-value, wealth-generating industries (like manufacturing, tech, and creative exports) could transform the economy. This is, in my opinion, huge and the one ray of hope in all this. The next essay in this series is about how shockingly few very special wealth creating jobs make Nova Scotia work and how a surprisingly small change could jet-propel our future and change everything!

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The Hopeful Side

Mexico’s size and systemic corruption make reform very difficult. Nova Scotia, on the other hand, is small, well-governed, and could pivot its economy more easily.

Especially if we know which way to go and what to stop doing.

If Mexico’s story is a warning, it’s also proof that bad policies and economic dependence create long-term stagnation. But Nova Scotia is still in a position to shift course—if it chooses to.

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IN THE NEXT CHAPTER:

The Bee will take a look at Mississippi. It's the Nova Scotia of America with the lowest GDP per capita. What’s their problem?