ABSTRACT
Mexico is on the verge of a new era of economic development. Its precise path and configuration will depend on how the Mexican economy adjusts to new internal and external environments. Mexico lost income originating abroad equivalent to about 6 percent of GDP in the past seven years; at the same time it has to pay real interest rates that are about twice as high as historical averages. For Mexico the new concept of comparative advantage has several implications. First is recognition of its unique geographical position, close to the North American market, between the Atlantic and the Pacific, close to Central America and the Caribbean, a market of more than 50 million people, and sharing various interests with South America.
