Trade and employment : industrial exports compared to import substitution in Mexico

Mexico is a semi-industrialized rather than an underdeveloped country, with a high rate of capital formation and slightly over half of its labor force in urban employment. But capital per worker in the industrial sector is only about a third as high as in the United States, which is Mexico"s main export market and source of imports. A high proportion of its labor force is still caught in occupations of extremely low productivity and income. The number of unskilled workers in agriculture is rising at a rate of about 1.8 percent a year. If exports of labor intensive manufactures could be developed on a larger scale they could open up the country"s development process to provide productive employment for many people who have so far been left out.