In the 20 years since Mexico signed the North American Free Trade Agreement, creating a single market with the United States and Canada, it has become one of the world's leading manufacturing exporters. Yet there is another side to the Mexico story. Its GDP has grown by just 2.7 percent a year on average since the beginning of the 1990s and since 1980 has averaged just 2.3 percent. What holds Mexico back? The answer, the McKinsey Global Institute finds, is that there are two Mexicos: a modern Mexico, and a traditional Mexico. Its disappointing growth record is the result of the two Mexicos pulling in opposite directions.
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