By Rodrigo Camara Rowe
Mexico’s strong tourism sector provides almost a tenth of the country’s GDP and supports millions of jobs in the industry. With the Mayan Train megaproject in the works, the Mexican government expects its southeastern states to enjoy higher levels of growth, generating billions of dollars into the economy, and making Mexico an even more attractive tourist destination.
As the most competitive travel destination in Latin America, Mexico’s impressive tourist jewels are famous worldwide. From ruins of ancient civilizations and unique tropical landscapes to the metropolitan capital and all-time spring break favorites, Mexico has a wide variety of places visitors can vacation in. Knowing this, the Secretariat of Tourism and President Manuel López Obrador have plans to catapult the country’s attractiveness for tourists with the Mayan Train. This megaproject will be built along the Yucatán peninsula, spanning 5 states. This endeavor is expected to attract billions of dollars of investment from both domestic and international firms and ultimately bring about significant economic growth, leading to a considerable employment increase in the region. The project, however, has raised several questions regarding the damage to the ecosystem and the increasing cost of construction, among other implications.
Mexico’s Economy and its tourism sector
Over the last decade, the internal consumption of travel and tourism in Mexico has increased by almost 40% (in real terms), which has in turn created more jobs in the tourism industry, attracted billions of dollars of investment from hotels and resorts, and created immense wealth in several states. Most of this economic growth has been enjoyed by a couple of famous destinations, including Mexico City, Cancún, Acapulco and the Mayan Riviera. Nevertheless, a majority of states in Mexico have a high count of hotel establishments, with Jalisco, Veracruz, Chiapas, and Quintana Roo leading the charts with 3,800+ hotels, pointing to a strong hospitality industry in the country overall.
It’s important to note that tourism, far from just making a number of cities wealthier, actually contributes an impressive 8.7% of Mexico’s GDP, with over 170 billion USD accounting for tourist consumption in 2019. This figure had been steadily increasing before the COVID pandemic hit the global economy.
More importantly, Mexico’s attractiveness for tourists is only expected to grow in the coming years, with forecasts predicting a 17% increase in absolute economic contribution of tourism by 2025. This growth has been consistent with the trend that has been observed in past years, and, aside from the pandemic, there’s few signs that this growth will subside.
The Mayan Train and Its Effects
The Mayan Train will run along 5 states: Yucatán, Quintana Roo, Campeche, Chiapas, and Tabasco. These southeastern states are part of a region in Mexico that has been suffering from increasing levels of poverty (almost 70%). Furthermore, a third of the households under the poverty threshold live in extreme poverty, a state in which people lack the most basic needs, making less than $1.90 US per day. Historically, most of Mexico’s wealth has been concentrated in the country’s capital, where almost a fifth of the population lives, and the northern states that have closer proximity to the United States. Other factors such a lack of infrastructure have also played a role in wealth inequality relative to other regions.
As the most ambitious tourism infrastructure project in several decades, the Mayan Train project is set to change this drastically. The train will cover a total distance of over 1,500 kilometers (approximately 1,000 miles) and will have 3 different travel routes, each with unique destinations: Caribbean, Gulf, and Jungle. With a total of 29 stops, it will work as a means of transportation for both passengers and freight cargo. The location and design of the train aims to focus on the rich cultural heritage that the southern regions of Mexico possess like one of the New 7 Wonders of the World, Chichen Itza. It’s this richness in cultural diversity that the project aims to exploit, but many critics have pointed out several weaknesses in the project’s plans and expectations.
Originally, the cost of construction was expected to fall between 120 and 150 billion MXN (around 6-8 billion USD), but it has since increased by more than 50% due to various reasons, such as higher than expected costs and the use of new construction materials like electric rails. Additionally, the Mexican government had announced that a share of the budget would come from private investors. However, President López Obrador (widely known as AMLO) announced in December that the federal government would fund the project in its entirety, leading some to believe that the project lacks organization and planning. Another sign of this lack of planning is the fact that no concrete plans have been released as to where exactly the railway’s routes will be built, even though construction has already begun. This has increased worries that the government will violate its promises not to build the train’s routes over protected areas that are rich in biodiversity.
As the first southern Mexican president in a long time, AMLO has long aimed to balance the wealth inequality between the north and south. With the Mayan Train, he expects to do precisely that. With increased spending from tourism and a boost in tourism-related employment in the region, the peninsular states will enjoy considerable economic growth. Yet another benefit from this project is that it will provide better connection between the states the train will cover. With this improved infrastructure for transportation of goods, costs for producers will decrease and they will have a longer reach to their consumers. More specifically, Mexico’s Fonatur (the National Trust for the Promotion of Tourism) anticipates the project to produce over 700,000 jobs by 2030, contract poverty 15% in the southeast along the train route, and double economic growth in the region.
However, numerous critics have pointed out that the municipalities in which the project is expected to boost economic growth are the ones that least need it. Namely, the already successful tourist destinations in Quintana Roo and Yucatán have enjoyed significant growth in the last few decades. A strong point that analysts make is that if the resources spent in the Mayan Train were used for infrastructure, healthcare, roads, and educational facilities in regions like Oaxaca and Chiapas, perhaps the multiplier effect would have an even greater impact on economic growth by compensating for the disadvantage that these regions have suffered. historically. With improved infrastructure, better healthcare, and updated educational facilities these regions could have a better chance of catching up with the country’s growth and development.
In spite of the project’s shortcomings, the Mayan Train is the biggest federal project in many decades that aims to tackle the south’s dire economic problems. By providing an even more attractive incentive for tourists to flood into the Peninsula and the means for cheaper transportation of goods for producers, the Mayan Train will finally give the south a chance to catch up to the country’s productivity and growth potential. How the government will tackle the outstanding issues with the project remains to be determined, but expectations are high and AMLO’s legacy will likely depend on the success of this project. □
- Image source: Licensed under CC Attribution Share Alike 4.0 International Gabomiranda
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