Mexico:

 

Understanding Mexico

 

 

 

Table of contents:

Mexico: Understanding Mexico War on Drugs: Economy Economic Challenges: Potential for crisis in 2009: Mexican Banking Sector Stock Exchange Tax issues hold back the BMV Too much concentration of power & influence Value of Bourse:  Comparison with BOVESPA: Corporate Bond market (healthy) Energy Industry (in need of serious reform) Lack of supplies: Attacks  / Terrorism: Illegal smuggling industy  Business Idea for mexico – Immigration, and why its a problem FOR Mexico - (not for the US) An analogy from the world of sports:  Business Clusters in Mexico Relations with the USA Effects of the (USA) credit crunch: Wikipedia on Mexico Top Tourist destinations in Mexico: Guide to doing business in Mexico Map  Mexico and Import / Exports Macroeconomic Data more Data & Statistics General info from Wikipedia External Links Guide Books for Business in Latin America

 

 

 

War on Drugs:

 

Since 2006, the Mexican government has been in embroiled in a bloody drug war, which has failed to significantly curb trafficking, explains this CFR Backgrounder.

 

 

 

Economy

foreign reserves .. over 90bn..(not 30bn)

 

 

 

Economic Challenges:

• as the currency weakens, pressure on increased inflation (which was already too high in 2008 at)...bank’s target of 3 per cent with a 1 percentage point margin either side
• In response to inflation concerns (which reached 6.5%), the Mexican central bank was not able to cut interest rates.
• But, with recession, inflation should ease...Treasury Secretary Agustin Carstens predicted inflation would slow to 5.4 percent for the year
• and Mexico's government freezes gasoline prices and slashes electricity and natural gas costs
• Finally, an interest rate cut in 2009 ...The bank lowered its benchmark lending rate 50 basis points to 7.75 percent
• The peso was trading at 13.9 to the dollar late Friday morning, strengthening slightly on the rate cut
• Mexico, which sends 80 percent of its exports to the United States, has been pummeled by the U.S. recession, with sales of oil, manufactured goods and vehicles falling.
• U.S., which buys 80 percent of Mexican exports
• A 40 percent decline in the peso since August has meanwhile boosted import costs, fueling inflation
• fiscal stimulus:  President Felipe Calderon last week pledged 2 billion pesos ($150 million) in spending to prevent layoffs, slash energy costs and spur growth. (but, thats TINY)
• Reserves:  The central bank has accumulated more than $30 billion in foreign currency reserves since Mexico's own 1995 financial crisis, allowing it to auction off at least $15 billion to prop up the battered peso last year.

 

more:

• growth in October last year contracted 0.9 per cent against the same month in 2007, and the country’s increasingly important services sector shrank 0.2 per cent – the first fall since 2003. Industrial production has fallen every month for the past five months.
• source:  http://www.ft.com/cms/s/0/3991b0ac-e347-11dd-a5cf-0000779fd2ac.html
• oil down...the Mexico mix at the end of last week was down to $30.52 a barrel.
• For the world’s sixth biggest oil producer, and for a government that relies on oil to provide about 40 per cent of total revenue
• Pemex, the state oil monopoly, said crude output fell 9.6 per cent in October compared with a year before. Exports, meanwhile, fell an alarming 17.6 per cent over the same period
• Petroleos Mexicanos, the state-owned oil company, provides about one-third of federal government revenue.
• For now, the government is covered because it spent $1.5bn on derivatives contracts that ensure a minimum sales price of $70 a barrel for Mexican oil exports throughout 2009.
• But if the global recession keeps crude prices down beyond next year, economists say the impact on Mexico’s public finances will leave the government on the horns of a dilemma. As Mr Rubio says: “If things stay as they are, you are either going to have to cut spending or increase taxes because the reforms do not solve the basic problems.”

more:

• Mexico receives the largest amount of remittances in absolute terms, estimated by the World Bank to have been around US$24bn in 2008 (down from US$25bn in 2007);  http://www.economist.com/agenda/displaystory.cfm?story_id=12957729
• Mexico is one country being hit with the double whammy, as it depends on the US market for nearly all of its remittances and 80% of its exports. With export sales declining in line with reduced US import demand, domestic demand would have to drive economic growth. Yet this is likely to be insufficient, and the
• Economist Intelligence Unit forecasts that Mexico will be one of a small group of countries in Latin America to actually post negative GDP growth this year

 

 

 

 

Potential for crisis in 2009:

 

see (very negative) article here:  http://www.rgemonitor.com/latam-monitor/254773/mexico_iceberg_dead_ahead

 

summary of points:

• Mexico is in for a severe crisis.
• decline in oil prices will hit Mexico hard. The Mexican government will soon face a gaping hole in the fiscal accounts. Oil represents about a third of government revenues.  Unfortunately, the decline in the valuation of crude coincides with a plunge in oil production.
• Drop in metal prices will weigh heavily on the mining regions, particularly in the north.
• dramatic fall in remittances
• Construction companies in the US are reducing staff, forcing many immigrants to return home
• the maelstrom in the automobile industry is forcing some Maquiladoras to close factories and furlough workers.
• The current account gap may exceed $24 billion in 2009.
• This shortfall will be larger if remittances collapse. (which might fall by 50% due to contraction in the US)
• the capital account will not provide any solace. Foreign direct investment will also decline, due to the downturn in manufacturing. There is a chance that the portfolio flows will be negative, as investors flee the emerging markets.
• the peso will have to devalue...the Mexican currency could lose another 20% to 25%, which could put it above 17 to 1 against the USD
• corporate defaults expected; No Mexican CFO is prepared for such a scenario, which could lead to despair on the corporate front. Hence, we could be in for a wave of unexpected defaults.
• social situation could become explosive. The lawlessness caused by the burgeoning drug trade undermined local institutions, such as the press, judiciary and law enforcement.
• author:  Walter Molano | Dec 18, 2008

 

 

 

Mexican Banking Sector

 

Has remained relatively healthy in spite of the credit crisis in the USA.  This is in spite of the fact that Mexico has one of most open banking sectors in the world (only one of the top 5 banks are Mexican -owned), and the fact that Mexico and the US are closely tied economically.   Largely this is because Mexico's economy (GDP) is more closely tied to the US industrial output than  to the overall US economy (GDP), where there have been declines in the US services sector, but not in the industrial one.  In fact, the US has started to export more due to the weak dollar, and this appears to have helped rather than hurt the Mexican economy.

 

Additionally, the Mexican Banks are benefiting from the extra consumer credit (mentioned above), with which the banks charge large fees.   The extension of the credit to the large and growing consumer class has been a boom for Mexican banks (as it has for all banks in emerging markets servicing the credit-to-the poor marketplace).   (insert ethical discussion here if you wish...)

 

The 5 largest banks in Mexico are:

 

Bancomer, Santander, HSBC, Banorte, and Banamex (part of Citibank).  They control over 75% of the market.  Two are Spanish owned, one in American, one British, and the other is Mexican.  

 

Other active banks:  Aztec Bank (Mexican), and Scotia Bank (Canada)

 

 

 

 

 

 

Stock Exchange

 

BMV recently went public, following the trend set by the Brazilian BOVESPA, which went public earlier this year, selling off just under 50% to both Mexican and foreign investors.  The 19 remaining partners are a mixture of Mexican and international banks.

 

How it makes money:   fees (cost) of trading:  will likely increase to one basis point of trades from their present average of 0.7bp....this would bring fees to European levels while leaving them considerably below those of Brazil’s BOVESPA

 

effects of going public:  creation of a 15-member board, eight of whom are independent – made it imperative not only to increase future income but to carry out synergies and identify cost savings.

 

troubles: the BMV offers volume discounts on the fees, but with large institutional investors, most qualify for discounts, so even though volume of trades has gone up, the revenues for BMV has not followed suit.  In the past, since brokerages owned the exchange, that was not a problem...but now that the exchange is publicly owned, the discounts will need to be renegotiated...

 

NOTE:  in Mexico, as in many emerging markets....you can not SHORT sell

 

See also our discussion about: stock markets, and  how to value a publicly traded stock market

 

Tax issues hold back the BMV

 

Part of the reason for Mexico's relative weakness is technical: although property is one of the country's growth areas, unhelpful tax rules have impeded listed real-estate investment vehicles.

 

Too much concentration of power & influence

 

According to the Economist:  The "problem is the power of near-monopoly firms and large family holdings. It is difficult to reach an exact figure, but one Mexican financial analyst reckons that Carlos Slim, by some accounts the world's richest man, controls close to 50% of the value of shares traded on the BMV."

 

Value of Bourse:  Comparison with BOVESPA:

 

see our discussion about how to value a publicly traded stock market

 

 

Corporate Bond market (healthy)

 

Corporate debt has grown healthily on Mexican bond markets.

 

 

Energy Industry (in need of serious reform)

 

Pemex has their budget fixed by the federal government.  The state oil company spends a massive amount to the federal government, accounting for 40% of its revenue, which leaves very little amount of money for the company to spend on developing its refining or exploration.  The result is that Mexico as a massive importer of refined oil, even though they are the 6th largest oil producer of the raw material.  Mexico as a result is importing close to 40% of all of its refined oil from abroad. 

 

Lack of supplies:

 

The Mexican oil reserves are expected to fall dramatically over the coming decades, which will have a serious impact on the federal governments funding.  In the past, Mexico has been luck to be able to depend on oil revenues, but that has also been a curse because they have become too dependent on that steady revenue stream.  What is needed desperately is more exploration, which can only happen if the company Pemex can free up capital (and quit paying such a large portion of its profits to the federal government).  Serious reforms are in order.

 

Attacks  / Terrorism:

 

In September 2007, there were 6 explosions at oil pipelines in the state of Veracruz, which interrupted oil and natural gas supplies, shutting down factories.  There have been multiple attacks around that same time, with left-wing rebels claiming responsibility.

 

 

Illegal smuggling industy 

 

 

Miguel Messmacher, the Finance Ministry’s chief economist, said Dec. 20 that the country will continue to lose 1 percentage point from its annual growth rate unless Mexico gets its organized crime violence under control. Drug-related deaths more than doubled last year to more than 5,000.

 

Human and drug trafficing across Mexico is a big business.   But, recently there was an unusual step for a Mexican president: he asked the United States to help him fight the criminal mafias based in his country that supply much of his neighbour's drug habit. Under the "Mérida initiative", the Bush administration promised $1.4 billion over three years in hardware (transport and surveillance planes, helicopters and communications systems) and training, with another $100m for Central America.    Mexico already spends $2.5 billion a year fighting drugs—while American officials reckon that up to $20 billion of drug money crossed the border in cash alone last year.   read more here

 

 

Business Idea for mexico –

take technology from California (close location), adaption, and market to latin American. If they are already good at copying, then why not use for competitive advantage? Export to other markets in Lat am. (note: dell in usa does something similar, but not developing new computer itself)..

 

 

 

Immigration, and why its a problem FOR Mexico - (not for the US)

 

Immigration is often framed as an issue for the USA, but I would argue that if you think in terms of long term competitiveness, immigration from Mexico to the USA is a net benefit for the US, and a net problem for Mexico.  

 

Its not good for a country to have the ambitions of the lower class up and leave for another place.  Think about all of the ambitios Latinos that arrive in the US to later start up companies, or go on to be doctors, engineers, etc. 

 

With the exodus of people to the USA, Mexico is losing talent, hunger, drive, ambition for the future.

 

An analogy from the world of sports: 

Think about it in terms of soccer. If you asked most people from Brazil the following question: who are better soccer players, the rich or the poor?  The answer that probably 99% of the Brazilians would respond is that the poor are better soccer players than the rich (maybe they spend more time practicing, or maybe they have more hunger for the chance to improve their lives through sports).  But imagine a world in which 40 million of the poorest  people from Brazil were to leave their country.  Do you think that a mass exodus like that would enable Brazil to win all of those world cups?  I doubt it.

 

 

Now, does this story have an analogy in the world of business?  What is the impact of losing a massive quantity of poor and ambitious people?

 

 

 

 

 

Business Clusters in Mexico

 

• Guadalajara Mexico tech center - electronic industry - "silicon valley" of Mex?
• Major apparel manufacturers - where?

 

Relations with the USA

 

Do Mexicans dislike Americans?  Is the word "gringo" derrogatory?  Probably, yes.   But there is a history here that the US hardly remembers, but Mexico can never forget:    the war with Mexico of 1846-48 may by just a quick mention in most US history books, but ....by contrast, every Mexican schoolchild is taught the story, and considers it to be very important.   In that war, Mexico lost nearly half its territory, comprising what is now the south-western United States.  No wonder they might be pissed.

 

 

 

 

 

Effects of the (USA) credit crunch:

 

Back in 2008, it looked like Mexico was going to be fine.

 

It appeared as if the credit crunch was just a financial event, and not an economic one (not tied to the real economy).  Most analysts were surprised that Mexico was motoring along just fine. 

 

In May 2008, we wrote this:  ´Other than countries that were direct buyers of US asset-backed securities (mortgages), I don't see much of a contraction of credit in emerging markets. Let's look at Brazil for example;  In May of 2008 (6+ months into the "credit crisis of 2007"), I see no contraction of credit conditions at all.  In fact, there is an ongoing explosion of credit available to consumers in Brazil (even if the industrial credit markets are still as tight as ever).  On the consumer side, however, it appears as if Brazil is swimming in available credit, in spite of the so-called "credit crisis".  Maybe the troubles are not as global as some analysts are predicting.  Not directly anyways.  Mexico is another example.  According to a recent article from the Economist magazine, lending in Mexico "has ballooned.  Credit to the private sector has nearly tripled since 2001, while consumer credit has increased by around seven times."  This is hardy a global credit crisis.  Again, it seems to be localized just to banks that were buyers of mortgage backed securities, or other financial innovations.    But, in Mexico, the article goes on to explain that there has been an increase in the sophistication of the credit markets, as there has also been a massive growth of mortgage-backed securities markets, and improved credit ratings systems.  But, in contrast with the US, there has been a very minimal housing price increase (even less than inflation). So, in spite of a credit crunch, it appears as if the phenomenon is mostly US-based one. ´

 

wow, how events can change in 1 year!!

 

 

 

Wikipedia on Mexico

 

Mexico is a country located in North America, bounded on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of Mexico. Its capital is Mexico City (Ciudad de México), which is one of the largest cities on Earth. Covering almost 2 million square kilometres, Mexico is the 6th largest country in America by total area and 15th largest in the world. With a population of about 108 million, it is the 11th most populous country and the most populous Spanish-speaking country in the world. As the only Latin American member of the Organisation for Economic Co-operation and Development (OECD) since 1994, Mexico is firmly established as an upper middle-income country. Elections held in July 2000 marked the first time since 1910 that the opposition defeated the Institutional Revolutionary Party (Partido Revolucionario Institucional: PRI), and Vicente Fox of the National Action Party (Partido Acción Nacional: PAN) was sworn in as President on December 1, 2000. The current President is Felipe Calderón Hinojosa, also from PAN.

 

 

Rank City State Population Region

1 Mexico City Federal District 19.23 million Center South

2 Guadalajara Jalisco 4.10 million West

3 Monterrey Nuevo Leon 3.66 million North East

4 Puebla Puebla 2.11 million East

5 Toluca México 1.61 million Center South

6 Tijuana Baja California 1.48 million North West

7 León Guanajuato 1.43 million Center

8 Ciudad Juárez Chihuahua 1.31 million North West

9 Torreón Coahuila 1.11 million North East

10 San Luis Potosí San Luis Potosí 0.96 million Center

11 Querétaro Querétaro 0.92 million Center

12 Mérida Yucatán 0.90 million South East

13 Mexicali Baja California 0.85 million North West

14 Aguascalientes Aguascalientes 0.81 million Center

15 Tampico Tamaulipas 0.80 million North East

16 Cuernavaca Morelos 0.79 million Center

17 Acapulco Guerrero 0.79 million South

18 Chihuahua Chihuahua 0.78 million North East

19 Culiacán Sinaloa 0.76 million North West

 

With an estimated 2005 population of about 106.5 million, Mexico is the most populous Spanish-speaking country in the world. Racially and ethnically Mexico is a diverse country. Its three main ethnic groups are mestizos (mixed Spanish and Amerindian people; 60% of the population); Amerindians (11.4-30%); and Europeans (9-15%); mostly of Spanish descent and to a lesser degree, some German, French, Italian, Portuguese, Irish, Polish, Russian, British, and Swedish immigrants). A large Chinese community exists in Mexicali, Baja California and there has been a small but steady influx of Filipinos since the late sixteenth century.

 

 

 

Top Tourist destinations in Mexico:

 

 

 

 

Guide to doing business in Mexico

 

How to do business in Mexico guide

 

 

Map

 

 

 

 

 Mexico and Import / Exports

 

• One of the largest exporters of HONEY in the world
• 33% of Mexican coffee production is exported
• one of the top 10 shoe exporters in the world
• 90% of all Televisions in the US pass through a Mexican assembly plant
• 30% of non-fat dry milk is imported
• soy beans consumption is almost all imported
• 50% of thier wine is imported, as is 50% of all medicines

 

 

 

 

 

 

 

 

Macroeconomic Data

 

 

From the Economist Intelligence Unit

Source: Country ViewsWire

 

Annual data	2006(a)	Historical averages (%)	2002-06
Population (m)	107.4	Population growth	1.2
GDP (US$ bn; market exchange rate)	840.0(b)	Real GDP growth	2.8
GDP (US$ bn; purchasing power parity)	1,167.2	Real domestic demand growth	2.9
GDP per head (US$; market exchange rate)	7,818	Inflation	4.4
GDP per head (US$; purchasing power parity)	10,863	Current-account balance (% of GDP)	-1.3
Exchange rate (av) Ps:US$	10.9(b)	FDI inflows (% of GDP)	2.9
(a) Economist Intelligence Unit estimates. (b) Actual.

 

 

Key indicators	2007	2008	2009	2010	2011	2012
Real GDP growth (%)	3.0	2.9	3.5	3.4	3.4	3.4
Consumer price inflation (%)	4.0	3.8	3.4	3.3	3.3	3.3
NFPS balance (% of GDP)	0.0	0.0	0.0	-0.2	-0.1	-0.1
Current-account balance (% of GDP)	-0.7	-2.0	-2.4	-2.7	-2.7	-2.6
Commercial banks' prime rate (av; %)	7.4	7.2	7.4	7.4	7.3	7.3
Money market rate (av; %)	7.2	7.1	7.3	7.3	7.2	7.2
Exchange rate Ps:US$ (av)	11.0	11.3	11.6	11.9	12.1	12.2

 

 

Major exports 2006	% of total	Major imports 2006	% of total
Manufactures	81.1	Intermediate goods	73.6
Maquiladora	44.7	Maquiladora	34.2
Oil	15.6	Capital goods	11.9
Agricultural products	2.8	Consumer goods	14.4
Leading markets 2006	% of total	Leading suppliers 2006	% of total
US	84.7	US	50.9
Canada	2.1	China	9.5
Spain	1.2	Japan	5.9
Germany	1.3	South Korea	4.2

 

puchase more economic data from EIU.com

 

 

 

more Data & Statistics

 

source: https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html

 

Economy

Mexico

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Economy - overview:	Mexico has a free market economy in the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is one-fourth that of the US; income distribution remains highly unequal. Trade with the US and Canada has tripled since the implementation of NAFTA in 1994. Mexico has 12 free trade agreements with over 40 countries including, Guatemala, Honduras, El Salvador, the European Free Trade Area, and Japan, putting more than 90% of trade under free trade agreements. In 2007, during his first year in office, the Felipe CALDERON administration was able to garner support from the opposition to successfully pass a pension and a fiscal reform. The administration continues to face many economic challenges including the need to upgrade infrastructure, modernize labor laws, and allow private investment in the energy sector. CALDERON has stated that his top economic priorities remain reducing poverty and creating jobs.
GDP (purchasing power parity):	$1.353 trillion (2007 est.)
GDP (official exchange rate):	$893.4 billion (2007 est.)
GDP - real growth rate:	3.2% (2007 est.)
GDP - per capita (PPP):	$12,400 (2007 est.)
GDP - composition by sector:	agriculture: 4% industry: 26.6% services: 69.5% (2007 est.)
Labor force:	44.71 million (2007 est.)
Labor force - by occupation:	agriculture: 18% industry: 24% services: 58% (2003)
Unemployment rate:	3.7% plus underemployment of perhaps 25% (2007 est.)
Household income or consumption by percentage share:	lowest 10%: 1.2% highest 10%: 37% (2006)
Distribution of family income - Gini index:	50.9 (2005)
Investment (gross fixed):	20.8% of GDP (2007 est.)
Budget:	revenues: $227.5 billion expenditures: $227.2 billion (2007 est.)
Public debt:	22.8% of GDP (2007 est.)
Inflation rate (consumer prices):	4% (2007 est.)
Central bank discount rate:	NA
Commercial bank prime lending rate:	7.56% (31 December 2007)
Stock of money:	$103.5 billion (31 December 2007)
Stock of quasi money:	$168.4 billion (31 December 2007)
Stock of domestic credit:	$349.1 billion (31 December 2007)
Agriculture - products:	corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products
Industries:	food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism
Industrial production growth rate:	1.4% (2007 est.)
Electricity - production:	243.3 billion kWh (2007 est.)
Electricity - consumption:	202 billion kWh (2007 est.)
Electricity - exports:	1.278 billion kWh (2007 est.)
Electricity - imports:	484.2 million kWh (2007 est.)
Oil - production:	3.501 million bbl/day (2007 est.)
Oil - consumption:	2.119 million bbl/day (2007 est.)
Oil - exports:	2.204 million bbl/day (2005)
Oil - imports:	385,400 bbl/day (2005)
Oil - proved reserves:	11.65 billion bbl (1 January 2008 est.)
Natural gas - production:	55.98 billion cu m (2007 est.)
Natural gas - consumption:	68.29 billion cu m (2007 est.)
Natural gas - exports:	2.973 billion cu m (2007 est.)
Natural gas - imports:	11.69 billion cu m (2007 est.)
Natural gas - proved reserves:	392.2 billion cu m (1 January 2008 est.)
Current account balance:	-$5.525 billion (2007 est.)
Exports:	$271.9 billion f.o.b. (2007 est.)
Exports - commodities:	manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton
Exports - partners:	US 82.2%, Canada 2.4%, Germany 1.5% (2007)
Imports:	$281.9 billion f.o.b. (2007 est.)
Imports - commodities:	metalworking machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft parts
Imports - partners:	US 49.6%, China 10.5%, Japan 5.8%, South Korea 4.5% (2007)
Reserves of foreign exchange and gold:	$87.19 billion (31 December 2007 est.)
Debt - external:	$179.8 billion (31 December 2007)
Stock of direct foreign investment - at home:	$260.9 billion (2007 est.)
Stock of direct foreign investment - abroad:	$39.01 billion (2007 est.)
Market value of publicly traded shares:	$348.3 billion (2006)
Currency (code):	Mexican peso (MXN)
Exchange rates:	Mexican pesos (MXN) per US dollar - 10.8 (2007), 10.899 (2006), 10.898 (2005), 11.286 (2004), 10.789 (2003)

 

 

 

Legend: Definition Field Listing Rank Order

Introduction

Mexico

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Background:

The site of advanced Amerindian civilizations, Mexico came under Spanish rule for three centuries before achieving independence early in the 19th century. A devaluation of the peso in late 1994 threw Mexico into economic turmoil, triggering the worst recession in over half a century. The nation continues to make an impressive recovery. Ongoing economic and social concerns include low real wages, underemployment for a large segment of the population, inequitable income distribution, and few advancement opportunities for the largely Amerindian population in the impoverished southern states. The elections held in 2000 marked the first time since the 1910 Mexican Revolution that an opposition candidate - Vicente FOX of the National Action Party (PAN) - defeated the party in government, the Institutional Revolutionary Party (PRI). He was succeeded in 2006 by another PAN candidate Felipe CALDERON.

Geography

Mexico

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Location:	Middle America, bordering the Caribbean Sea and the Gulf of Mexico, between Belize and the US and bordering the North Pacific Ocean, between Guatemala and the US
Geographic coordinates:	23 00 N, 102 00 W
Map references:	North America
Area:	total: 1,972,550 sq km land: 1,923,040 sq km water: 49,510 sq km
Area - comparative:	slightly less than three times the size of Texas
Land boundaries:	total: 4,353 km border countries: Belize 250 km, Guatemala 962 km, US 3,141 km
Coastline:	9,330 km
Maritime claims:	territorial sea: 12 nm contiguous zone: 24 nm exclusive economic zone: 200 nm continental shelf: 200 nm or to the edge of the continental margin
Climate:	varies from tropical to desert
Terrain:	high, rugged mountains; low coastal plains; high plateaus; desert
Elevation extremes:	lowest point: Laguna Salada -10 m highest point: Volcan Pico de Orizaba 5,700 m
Natural resources:	petroleum, silver, copper, gold, lead, zinc, natural gas, timber
Land use:	arable land: 12.66% permanent crops: 1.28% other: 86.06% (2005)
Irrigated land:	63,200 sq km (2003)
Natural hazards:	tsunamis along the Pacific coast, volcanoes and destructive earthquakes in the center and south, and hurricanes on the Pacific, Gulf of Mexico, and Caribbean coasts
Environment - current issues:	scarcity of hazardous waste disposal facilities; rural to urban migration; natural fresh water resources scarce and polluted in north, inaccessible and poor quality in center and extreme southeast; raw sewage and industrial effluents polluting rivers in urban areas; deforestation; widespread erosion; desertification; deteriorating agricultural lands; serious air and water pollution in the national capital and urban centers along US-Mexico border; land subsidence in Valley of Mexico caused by groundwater depletion note: the government considers the lack of clean water and deforestation national security issues
Environment - international agreements:	party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Wetlands, Whaling signed, but not ratified: none of the selected agreements
Geography - note:	strategic location on southern border of US; corn (maize), one of the world's major grain crops, is thought to have originated in Mexico

People

Mexico

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Population:	108,700,891 (July 2007 est.)
Age structure:	0-14 years: 30.1% (male 16,696,089/female 16,011,563) 15-64 years: 64% (male 33,624,812/female 35,925,372) 65 years and over: 5.9% (male 2,917,563/female 3,525,492) (2007 est.)
Median age:	total: 25.6 years male: 24.6 years female: 26.6 years (2007 est.)
Population growth rate:	1.153% (2007 est.)
Birth rate:	20.36 births/1,000 population (2007 est.)
Death rate:	4.76 deaths/1,000 population (2007 est.)
Net migration rate:	-4.08 migrant(s)/1,000 population (2007 est.)
Sex ratio:	at birth: 1.05 male(s)/female under 15 years: 1.043 male(s)/female 15-64 years: 0.936 male(s)/female 65 years and over: 0.828 male(s)/female total population: 0.96 male(s)/female (2007 est.)
Infant mortality rate:	total: 19.63 deaths/1,000 live births male: 21.54 deaths/1,000 live births female: 17.62 deaths/1,000 live births (2007 est.)
Life expectancy at birth:	total population: 75.63 years male: 72.84 years female: 78.56 years (2007 est.)
Total fertility rate:	2.39 children born/woman (2007 est.)
HIV/AIDS - adult prevalence rate:	0.3% (2003 est.)
HIV/AIDS - people living with HIV/AIDS:	160,000 (2003 est.)
HIV/AIDS - deaths:	5,000 (2003 est.)
Nationality:	noun: Mexican(s) adjective: Mexican
Ethnic groups:	mestizo (Amerindian-Spanish) 60%, Amerindian or predominantly Amerindian 30%, white 9%, other 1%
Religions:	Roman Catholic 76.5%, Protestant 6.3% (Pentecostal 1.4%, Jehovah's Witnesses 1.1%, other 3.8%), other 0.3%, unspecified 13.8%, none 3.1% (2000 census)
Languages:	Spanish, various Mayan, Nahuatl, and other regional indigenous languages
Literacy:	definition: age 15 and over can read and write total population: 91% male: 92.4% female: 89.6% (2004 est.)

Government

Mexico

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Country name:	conventional long form: United Mexican States conventional short form: Mexico local long form: Estados Unidos Mexicanos local short form: Mexico
Government type:	federal republic
Capital:	name: Mexico (Distrito Federal) geographic coordinates: 19 26 N, 99 08 W time difference: UTC-6 (1 hour behind Washington, DC during Standard Time) daylight saving time: +1hr, begins first Sunday in April; ends last Sunday in October note: Mexico is divided into four time zones
Administrative divisions:	31 states (estados, singular - estado) and 1 federal district* (distrito federal); Aguascalientes, Baja California, Baja California Sur, Campeche, Chiapas, Chihuahua, Coahuila de Zaragoza, Colima, Distrito Federal*, Durango, Guanajuato, Guerrero, Hidalgo, Jalisco, Mexico, Michoacan de Ocampo, Morelos, Nayarit, Nuevo Leon, Oaxaca, Puebla, Queretaro de Arteaga, Quintana Roo, San Luis Potosi, Sinaloa, Sonora, Tabasco, Tamaulipas, Tlaxcala, Veracruz-Llave, Yucatan, Zacatecas
Independence:	16 September 1810 (declared); 27 September 1821 (recognized by Spain)
National holiday:	Independence Day, 16 September (1810)
Constitution:	5 February 1917
Legal system:	mixture of US constitutional theory and civil law system; judicial review of legislative acts; accepts compulsory ICJ jurisdiction with reservations
Suffrage:	18 years of age; universal and compulsory (but not enforced)
Executive branch:	chief of state: President Felipe de Jesus CALDERON Hinojosa (since 1 December 2006); note - the president is both the chief of state and head of government head of government: President Felipe de Jesus CALDERON Hinojosa (since 1 December 2006) cabinet: Cabinet appointed by the president; note - appointment of attorney general requires consent of the Senate elections: president elected by popular vote for a single six-year term; election last held on 2 July 2006 (next to be held 1 July 2012) election results: Felipe CALDERON elected president; percent of vote - Felipe CALDERON 35.89%, Andres Manuel Lopez OBRADOR 35.31%, Roberto MADRAZO 22.26%, other 6.54%
Legislative branch:	bicameral National Congress or Congreso de la Union consists of the Senate or Camara de Senadores (128 seats; 96 members are elected by popular vote to serve six-year terms, and 32 seats are allocated on the basis of each party's popular vote) and the Federal Chamber of Deputies or Camara Federal de Diputados (500 seats; 300 members are elected by popular vote; remaining 200 members are allocated on the basis of each party's popular vote; to serve three-year terms) elections: Senate - last held 2 July 2006 for all of the seats (next to be held 1 July 2012); Chamber of Deputies - last held 2 July 2006 (next to be held 5 July 2009) election results: Senate - percent of vote by party - NA; seats by party - PAN 52, PRI 33, PRD 26, PVEM 6, CD 5, PT 5, independent 1; Chamber of Deputies - percent of vote by party - NA; seats by party - PAN 206, PRD 127, PRI 106, PVEM 17, CD 17, PT 12, other 18
Judicial branch:	Supreme Court of Justice or Suprema Corte de Justicia de la Nacion (justices or ministros are appointed by the president with consent of the Senate)
Political parties and leaders:	Convergence for Democracy or CD [Luis MALDONADO Venegas]; Institutional Revolutionary Party or PRI [Beatriz PAREDES]; Labor Party or PT [Alberto ANAYA Gutierrez]; Mexican Green Ecological Party or PVEM [Jorge Emilio GONZALEZ Martinez]; National Action Party (Partido Accion Nacional) or PAN [Manuel ESPINO Barrientos]; New Alliance Party (Partido Nueva Alianza) or PNA [Miguel Angel JIMENEZ Godinez]; Party of the Democratic Revolution (Partido de la Revolucion Democratica) or PRD [Leonel COTA Montano]; Social Democratic and Peasant Alternative Party (Partido Alternativa Socialdemocrata y Campesina) or Alternativa [Alberto BEGNE Guerra]
Political pressure groups and leaders:	Broad Progressive Front or FAP; Businessmen's Coordinating Council or CCE; Confederation of Employers of the Mexican Republic or COPARMEX; Confederation of Industrial Chambers or CONCAMIN; Confederation of Mexican Workers or CTM; Confederation of National Chambers of Commerce or CONCANACO; Coordinator for Foreign Trade Business Organizations or COECE; Federation of Unions Providing Goods and Services or FESEBES; National Chamber of Transformation Industries or CANACINTRA; National Peasant Confederation or CNC; National Small Business Chamber or CANACOPE; National Syndicate of Education Workers or SNTE; National Union of Workers or UNT; Popular Assembly of the People of Oaxaca or APPO; Roman Catholic Church
International organization participation:	APEC, BCIE, BIS, CAN (observer), Caricom (observer), CDB, CE (observer), CSN (observer), EBRD, FAO, G-3, G-6, G-15, G-24, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, LAES, LAIA, NAFTA, NAM (observer), NEA, OAS, OECD, OPANAL, OPCW, PCA, RG, UN, UNCTAD, UNESCO, UNHCR, UNIDO, Union Latina, UNITAR, UNMOVIC, UNWTO, UPU, WCL, WCO, WFTU, WHO, WIPO, WMO, WTO
Diplomatic representation in the US:	chief of mission: Ambassador Arturo SARUKHAN Casamitjana chancery: 1911 Pennsylvania Avenue NW, Washington, DC 20006 telephone: [1] (202) 728-1600 FAX: [1] (202) 728-1698 consulate(s) general: Atlanta, Austin, Boston, Chicago, Dallas, Denver, El Paso, Houston, Los Angeles, Miami, New Orleans, New York, Nogales (Arizona), Omaha, Orlando, Phoenix, Sacramento, San Antonio, San Diego, San Francisco, San Jose, San Juan (Puerto Rico) consulate(s): Albuquerque, Brownsville (Texas), Calexico (California), Del Rio (Texas), Detroit, Douglas (Arizona), Eagle Pass (Texas), Fresno (California), Indianapolis (Indiana), Kansas City (Missouri), Laredo (Texas), Las Vegas, McAllen (Texas), Midland (Texas), Oxnard (California), Philadelphia, Portland (Oregon), Presidio (Texas), Raleigh, Saint Paul (Minnesota), Salt Lake City, San Bernardino, Santa Ana (California), Seattle, Tucson, Yuma (Arizona)
Diplomatic representation from the US:	chief of mission: Ambassador Antonio O. GARZA, Jr. embassy: Paseo de la Reforma 305, Colonia Cuauhtemoc, 06500 Mexico, Distrito Federal mailing address: P. O. Box 9000, Brownsville, TX 78520-9000 telephone: [52] (55) 5080-2000 FAX: [52] (55) 5511-9980 consulate(s) general: Ciudad Juarez, Guadalajara, Monterrey, Tijuana consulate(s): Hermosillo, Matamoros, Merida, Nogales, Nuevo Laredo
Flag description:	three equal vertical bands of green (hoist side), white, and red; the coat of arms (an eagle perched on a cactus with a snake in its beak) is centered in the white band

Economy

Mexico

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Economy - overview:	Mexico has a free market economy that recently entered the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is one-fourth that of the US; income distribution remains highly unequal. Trade with the US and Canada has tripled since the implementation of NAFTA in 1994. Mexico has 12 free trade agreements with over 40 countries including, Guatemala, Honduras, El Salvador, the European Free Trade Area, and Japan, putting more than 90% of trade under free trade agreements. The new Felipe CALDERON administration that took office in December 2006 faces many of the same challenges that former President FOX tried to tackle, including the need to upgrade infrastructure, modernize the tax system and labor laws, and allow private investment in the energy sector. CALDERON has stated that his top priorities include reducing poverty and creating jobs. The success of his economic agenda will depend on his ability to garner support from the opposition.
GDP (purchasing power parity):	$1.149 trillion (2006 est.)
GDP (official exchange rate):	$743.5 billion (2006 est.)
GDP - real growth rate:	4.8% (2006 est.)
GDP - per capita (PPP):	$10,700 (2006 est.)
GDP - composition by sector:	agriculture: 3.9% industry: 26.7% services: 69.4% (2006 est.)
Labor force:	44.51 million (2006 est.)
Labor force - by occupation:	agriculture: 18% industry: 24% services: 58% (2003)
Unemployment rate:	3.2% plus underemployment of perhaps 25% (2006 est.)
Population below poverty line:	17.6% (2004)
Household income or consumption by percentage share:	lowest 10%: 1.6% highest 10%: 39.4% (2004)
Distribution of family income - Gini index:	46.1 (2004)
Inflation rate (consumer prices):	3.6% (2006 est.)
Investment (gross fixed):	20.4% of GDP (2006 est.)
Budget:	revenues: $207.7 billion expenditures: $206.9 billion; including capital expenditures of $NA (2006 est.)
Public debt:	23.3% of GDP (2006 est.)
Agriculture - products:	corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products
Industries:	food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism
Industrial production growth rate:	3.6% (2006 est.)
Electricity - production:	222.4 billion kWh (2005)
Electricity - consumption:	183.3 billion kWh (2005)
Electricity - exports:	1.597 billion kWh (2005)
Electricity - imports:	470.7 million kWh (2005)
Oil - production:	3.42 million bbl/day (2005 est.)
Oil - consumption:	1.97 million bbl/day (2004 est.)
Oil - exports:	2.268 million bbl/day (2004)
Oil - imports:	308,500 bbl/day (2004)
Oil - proved reserves:	12.51 billion bbl (2006 est.)
Natural gas - production:	41.37 billion cu m (2005 est.)
Natural gas - consumption:	47.5 billion cu m (2005 est.)
Natural gas - exports:	282.9 million cu m (2005 est.)
Natural gas - imports:	9.717 billion cu m (2005)
Natural gas - proved reserves:	434.1 billion cu m (1 January 2006 est.)
Current account balance:	-$2.425 billion (2006 est.)
Exports:	$250 billion f.o.b. (2006 est.)
Exports - commodities:	manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton
Exports - partners:	US 84.7%, Canada 2.1%, Spain 1.3% (2006)
Imports:	$256.1 billion f.o.b. (2006 est.)
Imports - commodities:	metalworking machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft parts
Imports - partners:	US 50.9%, China 9.5%, Japan 6%, South Korea 4.2% (2006)
Economic aid - recipient:	$189.4 million (2005)
Reserves of foreign exchange and gold:	$76.33 billion (2006 est.)
Debt - external:	$164.7 billion (2006 est.)
Stock of direct foreign investment - at home:	$236.2 billion (2006 est.)
Stock of direct foreign investment - abroad:	$30.75 billion (2006 est.)
Market value of publicly traded shares:	$348.3 billion (2006)
Currency (code):	Mexican peso (MXN)
Exchange rates:	Mexican pesos per US dollar - 10.899 (2006), 10.898 (2005), 11.286 (2004), 10.789 (2003), 9.656 (2002)
Fiscal year:	calendar year

Communications

Mexico

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Telephones - main lines in use:	19.861 million (2006)
Telephones - mobile cellular:	57.016 million (2006)
Telephone system:	general assessment: low telephone density with about 18 main lines per 100 persons; privatized in December 1990; the opening to competition in January 1997 improved prospects for development, but Telmex remains dominant domestic: adequate telephone service for business and government, but the population is poorly served; mobile subscribers far outnumber fixed-line subscribers; domestic satellite system with 120 earth stations; extensive microwave radio relay network; considerable use of fiber-optic cable and coaxial cable international: country code - 52; satellite earth stations - 32 Intelsat, 2 Solidaridad (giving Mexico improved access to South America, Central America, and much of the US as well as enhancing domestic communications), 1 Panamsat, numerous Inmarsat mobile earth stations; linked to Central American Microwave System of trunk connections; high capacity Columbus-2 fiber-optic submarine cable with access to the US, Virgin Islands, Canary Islands, Morocco, Spain, and Italy (2005)
Radio broadcast stations:	AM 850, FM 545, shortwave 15 (2003)
Television broadcast stations:	236 (plus repeaters) (1997)
Internet country code:	.mx
Internet hosts:	7.629 million (2007)
Internet users:	22 million (2006)

Transportation

Mexico

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Airports:	1,834 (2007)
Airports - with paved runways:	total: 231 over 3,047 m: 12 2,438 to 3,047 m: 29 1,524 to 2,437 m: 84 914 to 1,523 m: 77 under 914 m: 29 (2007)
Airports - with unpaved runways:	total: 1,603 over 3,047 m: 1 1,524 to 2,437 m: 63 914 to 1,523 m: 408 under 914 m: 1,131 (2007)
Heliports:	1 (2007)
Pipelines:	gas 22,705 km; liquid petroleum gas 1,875 km; oil 8,688 km; oil/gas/water 228 km; refined products 6,520 km (2006)
Railways:	total: 17,665 km standard gauge: 17,665 km 1.435-m gauge (2006)
Roadways:	total: 235,670 km paved: 116,751 km (includes 6,144 km of expressways) unpaved: 118,919 km (2004)
Waterways:	2,900 km (navigable rivers and coastal canals) (2007)
Merchant marine:	total: 60 ships (1000 GRT or over) 802,128 GRT/1,157,971 DWT by type: bulk carrier 2, cargo 7, chemical tanker 6, liquefied gas 4, passenger/cargo 11, petroleum tanker 25, roll on/roll off 5 foreign-owned: 4 (Denmark 2, Norway 1, UAE 1) registered in other countries: 14 (Brazil 1, Honduras 1, Liberia 1, Panama 4, Portugal 1, Spain 3, Venezuela 3) (2007)
Ports and terminals:	Altamira, Manzanillo, Morro Redondo, Salina Cruz, Tampico, Topolobampo, Veracruz

Military

Mexico

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Military branches:	Secretariat of National Defense (Secretaria de Defensa Nacional, Sedena): Army (Ejercito), Mexican Air Force (Fuerza Aerea Mexicana, FAM); Secretariat of the Navy (Secretaria de Marina, Semar): Mexican Navy (Armada de Mexico, ARM, includes Naval Air Force (FAN) and Marines) (2007)
Military service age and obligation:	18 years of age for compulsory military service, conscript service obligation - 12 months; 16 years of age with consent for voluntary enlistment; conscripts serve only in the Army; Navy and Air Force service is all voluntary; women are eligible for voluntary military service (2007)
Manpower available for military service:	males age 18-49: 24,488,008 females age 18-49: 26,128,046 (2005 est.)
Manpower fit for military service:	males age 18-49: 19,058,337 females age 18-49: 21,966,796 (2005 est.)
Manpower reaching military service age annually:	males age 18-49: 1,063,233 females age 18-49: 1,043,816 (2005 est.)
Military expenditures - percent of GDP:	0.5% (2006 est.)

Transnational Issues

Mexico

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Disputes - international:	abundant rainfall in recent years along much of the Mexico-US border region has ameliorated periodically strained water-sharing arrangements; the US has intensified security measures to monitor and control legal and illegal personnel, transport, and commodities across its border with Mexico; Mexico must deal with thousands of impoverished Guatemalans and other Central Americans who cross the porous border looking for work in Mexico and the United States
Refugees and internally displaced persons:	IDPs: 10,000-12,000 (government's quashing of Zapatista uprising in 1994 in eastern Chiapas Region) (2006)
Trafficking in persons:	current situation: Mexico is a source, transit, and destination country for persons trafficked for sexual exploitation and labor; while the vast majority of victims are Central Americans trafficked along Mexico's southern border, other source regions include South America, the Caribbean, Eastern Europe, Africa, and Asia; women and children are trafficked from rural regions to urban centers and tourist areas for sexual exploitation, often through fraudulent offers of employment or through threats of physical violence; the Mexican trafficking problem is often conflated with alien smuggling, and frequently the same criminal networks are involved; pervasive corruption among state and local law enforcement often impedes investigations tier rating: Tier 2 Watch List - Mexico remains on the Tier 2 Watch List for the third consecutive year based on future commitments to undertake additional efforts in prosecution, protection, and prevention of trafficking in persons, and the failure of the government to provide critical law enforcement data
Illicit drugs:	major drug-producing nation; cultivation of opium poppy in 2005 amounted to 3,300 hectares yielding a potential production of 8 metric tons of pure heroin, or 17 metric tons of "black tar" heroin, the dominant form of Mexican heroin in the western United States; marijuana cultivation decreased 3% to 5,600 hectares in 2005 - just two years after a decade-high cultivation peak in 2003 - and yielded a potential production of 10,100 metric tons; government conducts the largest independent illicit-crop eradication program in the world; continues as the primary transshipment country for US-bound cocaine from South America, with an estimated 90% of annual cocaine movements towards the US stopping in Mexico; major drug syndicates control majority of drug trafficking throughout the country; producer and distributor of ecstasy; significant money-laundering center; major supplier of heroin and largest foreign supplier of marijuana and methamphetamine to the US market

 

 

 

General info from Wikipedia

 

Mexico (mĕk'sĭkō) , Span. México or Méjico (both: mā'hēkō), officially United Mexican States, republic (2005 est. pop. 106,203,000), 753,665 sq mi (1,952,500 sq km), S North America. It borders on the United States in the north, on the Gulf of Mexico (including its arm, the Bay of Campeche) and the Caribbean Sea in the east, on Belize and Guatemala in the southeast, and on the Pacific Ocean in the south and west. Mexico is divided into 31 states and the Federal District, which includes most of the country's capital and largest city, Mexico City.

 

More on this entry »

 

Land and People

 

Most of Mexico is highland or mountainous and less than 15% of the land is arable; about 25% of the country is forested. Most of the Yucatán peninsula and the Isthmus of Tehuantepec in the southeast is lowland, and there are low-lying strips of land along the Gulf of Mexico, the Pacific Ocean, and the Gulf of California (which separates the Baja, or Lower, California peninsula from the rest of the country).

 

The heart of Mexico is made up of the Mexican Plateau (c.700 mi/1,130 km long and c.4,000–8,000 ft/1,220–2,440 m high), which is broken by mountain ranges and segmented by deep rifts. The plateau is fringed by two mountain ranges, the Sierra Madre Oriental (in the east) and the Sierra Madre Occidental (in the west), which converge just south of the plateau. Within the plateau are drainage basins, which have no outlet to the sea and which contain some of the country's major cities. The Laguna District, one of the drainage basins, was (1936) the scene of a major experiment in land reapportionment. In the north the plateau is arid except for irrigated areas and is used principally for raising livestock.

 

In the south the deserts yield to the broad, shallow lakes of a region, comprising the Valley of Mexico, known as the Anáhuac and famous for its rich cultural heritage. South of the Anáhuac, which includes Mexico City, is a chain of extinct volcanoes, including Citlaltépetl, or Orizaba (18,700 ft/5,700 m, the highest point in Mexico), Popocatépetl, and Iztaccihuatl. To the south are jumbled masses of mountains and the Sierra Madre del Sur.

 

Among Mexico's few large rivers are the Rio Bravo del Norte, which forms the boundary with Texas, and its tributaries the Río Conchos and the Río Sabinas; the Río Yaqui, Río Fuerte, Río Mezquital, Río Grande de Santiago, and Río Balsas, which flow into the Pacific; and the Río Grijalva and Río Usumacinta, which flow into the Bay of Campeche. The climate of the country varies with the altitude, so that there are hot, temperate, and cool regions—tierra caliente (up to c.3,000 ft/1,220 m), tierra templada (c.3,000–c.6,000 ft/1,220–1,830 m), and tierra friá (above c.6,000 ft/1,830 m).

 

Mexico's 31 states are Aguascalientes, Baja California, Baja California Sur, Campeche, Chiapas, Chihuahua, Coahuila, Colima, Durango, Guanajuato, Guerrero, Hidalgo, Jalisco, Mexico, Michoacán, Morelos, Nayarit, Nuevo León, Oaxaca, Puebla, Querétaro de Arteaga, Quintana Roo, San Luis Potosí, Sinaloa, Sonora, Tabasco, Tamaulipas, Tlaxcala, Veracruz, Yucatán, and Zacatecas.

 

The great majority of the population are of mixed Spanish and indigenous descent and speak Spanish, the official language, as their first language. Various Mayan dialects are also spoken. Since 1920 the population of Mexico has had a very high rate of growth, almost entirely the result of natural increase; from 1940 to 1990 the population grew from 19.6 million to 81.1 million. However, declining fertility rates (from 7 children per woman in 1965 to slightly under 3 in 1998) are slowing down the population growth. Nearly 90% of the people are Roman Catholic and 6% are Protestant. The country has numerous universities, notably in Mexico City, Saltillo, Guadalajara, Monterrey, and Puebla. Since precolonial times Mexican architects, painters, writers, and musicians have produced a rich cultural heritage. See articles on Spanish colonial art and architecture, Mexican art and architecture, and Spanish American literature.

 

Economy

 

From the mid-1940s through the 1970s, Mexico generally enjoyed considerable economic growth, especially in industry. However, in the 1980s the economy, heavily dependent on sales of petroleum, incurred large international debts as petroleum prices fell. In the early 1990s, debt relief, diversification and privatization of the economy, and foreign investment showed positive effects, and the growth rate returned to historic levels. But a new crisis arose with the collapse of the peso in the mid-1990s, forcing the adoption of harsh austerity measures. A strong export sector helped the country to recover in the late 1990s, but the economy again went into recession in 2001, in large part because of the economic downturn in the United States. The Mexican government plays a major role in planning the economy and owns and operates some basic industries (including petroleum). However, the number of state-owned enterprises fell from more than 1,000 in 1982 to fewer than 200 in 1998.

 

About 25% of the country's workers (including those largely outside the money economy) are engaged in farming, which is slowly becoming modernized. Because rainfall is inadequate outside the coastal regions, agriculture depends largely on extensive irrigation. Mexico produces a wide variety of agricultural products, including basic grains, sugarcane, citrus fruits, cotton, coffee, and tomatoes. Maguey (see amaryllis) is widely grown and is processed into the alcoholic beverages pulque and mescal. Livestock raising and fishing are also significant economic activities.

 

Mexico is among the world's leading producers of many minerals, including silver, fluorite, zinc, and mercury, and its petroleum reserves are one of its most valuable assets. In the late 1970s and early 1980s, petroleum constituted about three quarters of Mexico's exports. That figure fell drastically in the mid-1980s. While the petroleum industry has recovered substantially, diversification of industry is helping to keep Mexico's trade economy from becoming dependent once more on a single export.

 

Next to oil, the most important source of exports are the industrial assembly plants (maquiladoras) that dot Mexico's border towns. Since the early 1980s there has been considerable foreign investment in the maquiladoras, which take advantage of a large, low-cost labor force to produce finished goods for export to the United States. These plants have increased Mexico's export production considerably. The economic importance of the maquiladoras, however, is exceeded by tourism. Favorite tourist centers include Acapulco, Cancún, Cozumel, Puerto Vallarta, Mazatlán, Cabo San Lucas, and Tijuana, as well as Mexico City itself and such highland centers as Guadalajara and Puebla. Remittances from Mexicans working, both legally and illegally, in the United States are also extremely important to the economy.

 

The principal industrial centers in Mexico are Mexico City, Guadalajara, Monterrey, Juárez, Tijuana, Veracruz, Durango, León, Querétaro, Tampico, Mérida, and Puebla.

 

Leading manufactures include food and beverages, tobacco, chemicals, iron and steel, refined petroleum and petrochemicals, textiles and clothing, motor vehicles, cement, and electronic products. The country is also known for its handicrafts, especially pottery, woven goods, and silverwork. Mexico's chief ports are Veracruz, Tampico, Coatzacoalcos, Mazatlán, and Ensenada.

 

The leading imports are machinery, steel, electrical and electronic equipment, chemicals, motor vehicle parts for assembly and repair, aircraft, manufactured consumer goods, and grain; the main exports are crude oil, petroleum products, coffee, sugar, cotton, tomatoes, shrimp, engines, motor vehicles, consumer electronics, silver, sulfur, and zinc. Until recently, the annual value of Mexico's imports was considerably higher than the value of its exports. The principal trade partners are the United States, the European Union nations, Japan, and Canada. Mexico is a member of the United Nations, the Organization of American States, the North American Free Trade Agreement, the Latin American Integration Association, and the Latin American Economic System.

 

Government

 

Under the constitution of 1917 as amended, Mexico is a federal republic whose chief executive and head of state is the president, directly elected to a nonrenewable six-year term and assisted by a cabinet. The bicameral legislature is made up of the Senate, comprising 128 members serving six-year terms, and the Chamber of Deputies, consisting of 500 members serving three-year terms. Half of the senators and 300 of the deputies are directly elected, while the other half of the senators and 200 of the deputies are chosen by a system of proportional representation.

 

History

 

To the Early Nineteenth Century

 

A number of great civilizations flourished in Mexico long before the arrival of Spanish conquistadores in the early 16th cent. The Olmec civilization was the earliest of these, reaching its high point between 800 and 400 B.C. The Maya civilization flourished between about A.D. 300 and 900, followed by the Toltec (900–1200) and the Aztec (1200–1519). Other notable civilizations of pre-Columbian Mexico are the Mixtec and the Zapotec.

 

The first Europeans to visit Mexico were Francisco Fernández de Córdoba in 1517 and Juan de Grijalva in 1518. The conquest was begun from Cuba in 1519 by Hernán Cortés, who with lieutenants such as Pedro de Alvarado managed to conquer the Aztec capital, Tenochtitlán; to capture Montezuma, the Aztec ruler, and to bring down his empire; and to ward off Spanish rivals like Pánfilo de Narváez. In 1528 the first audiencia (royal court) was set up under Nuño de Guzmán, who later carried the conquest north to Nueva Galicia. The territory was constituted the viceroyalty of New Spain under Antonio de Mendoza in 1535.

 

Despite efforts by such men as Juan de Zumárraga to induce the indigenous population to accept European religious and social practices, the Spanish had difficulty establishing control, as is evidenced by such events as the Mixtón War (1541). Nonetheless, the small minority of Spanish succeeded in holding power over the rest of the population, and the society slowly developed three different status groupings—Spanish, native peoples, and mestizos (mixed Spanish and indigenous).

 

Although certain viceroys, including Luis de Velasco (both father and son), attempted to improve the material conditions of the indigenous peoples, there remained an unbridgeable gap in status between the wealthy, almost exclusively Spanish landowning class and the depressed laboring class on the land, in the mines, and in the small factories (chiefly the textile mills, called obrajes). The growth of an underprivileged mestizo class and the antagonism between those Spanish born in Spain (gachupines) and those born in America (criollos, or creoles) added to the stress.

 

The mercantilist system, under which manufacturing was largely forbidden in New Spain, drained the wealth of the country to Spain. Lesser officials often were corrupt and ignored the country's problems. At the same time, the Spanish succeeded in conquering new territory. Most of present-day Mexico and the former Spanish holdings in the present-day United States were occupied early. In the 16th cent. California was explored, but it was not until the middle and late 18th cent. that NE Mexico and Texas were occupied by Europeans in any large degree. Many of the administrative evils were ended by the reforms (especially that of 1786) of José de Gálvez, but discontentment with Spanish rule continued to grow among the creoles.

 

Independence

 

The establishment of the United States and the ideas of the French Revolution had considerable influence on Mexicans. The occupation (1808) of Spain by Napoleon I, who placed his brother Joseph Bonaparte on the Spanish throne, opened the way for a revolt in Mexico. The priest Miguel Hidalgo y Costilla began the rebellion by issuing (Sept. 16, 1810) the Grito de Dolores cry of Dolores, a revolutionary tract calling for racial equality and the redistribution of land. Armies, made up mostly of mestizos and natives and shunned by the creoles, sprang up under the command of Ignacio Allende, José María Morelos y Pavón, Vicente Guerrero, and Mariano Matamoros.

 

Hidalgo was at first successful, but lost (1811) the decisive battle of Calderón Bridge. By 1815, Morelos and Matamoros had been defeated, and Guerrero had been driven into the wilds. When the liberals came to power in Spain in 1820, the more conservative elements in Mexico (primarily the higher clergy and the creoles) sought independence as a means of maintaining the status quo. The royalist general Augustín de Iturbide negotiated with Guerrero, and they arrived (Feb., 1821) at the Plan of Iguala (see under Iguala), which called for an independent monarchy, equality for gachupines and creoles, and the maintenance of the privileged position of the church. Spain accepted Mexican independence in Sept., 1821, and a short-lived empire with Iturbide at its head was established (1822).

 

In 1823, the republican leaders Santa Anna and Guadalupe Victoria drove out Iturbide and a republic was set up with Guadalupe Victoria as its first president. Politics were dominated by groups formed around individuals (mostly army officers), each seeking his personal ends. There was a frequent turnover of governments, and the national budget usually ran a deficit. Guerrero, with the support of Santa Anna, became president in 1829, but was ousted in 1830 by Anastasio Bustamante. In 1832, the ambitious Santa Anna, who had a great influence over Mexican politics until 1855, toppled Bustamante and became president. Santa Anna fell from power after being captured during the Texas revolution (1836), but he served again as president from 1841 to 1844. Waste, corruption, and inefficiency were widespread at the time, as inequities in the social order went unchallenged.

 

The war with Texas led to an all-out war with the United States, the Mexican War (1846–48), which was ended by the Treaty of Guadalupe Hidalgo, by which Mexico lost a large block of territory. After the war, Santa Anna returned to power as “perpetual dictator,” but he was overthrown (1855) by a revolution started (1854) at Ayutla. A group of reform-minded men came to the fore—Juan Álvarez, Ignacio Comonfort, Miguel and Sebastián Lerdo de Tejada, and, especially, Benito Juárez—and drafted the liberal constitution of 1857, which secularized church property and reduced the privileges of the army.

 

Conservative opposition was bitter, and civil war ensued; Juárez led the liberals to victory in the War of Reform (1858–61). The conservatives then sought foreign aid and received it from Napoleon III of France, who had colonial ambitions. French intervention followed and led to a brief and ill-starred interlude of empire (1864–67) under Maximilian, a Hapsburg prince. With the end of French aid the empire collapsed and Juárez again ruled Mexico, but political disturbances prevented the accomplishment of his reform program. Porfirio Díaz led a successful armed revolt in 1876 and, except for the period from 1880 to 1884, firmly held the reins of power as president until 1911. It was a period of considerable economic growth, but social inequality was increased by the favoritism shown the great landowners and foreign investors; the indigenous population sank deeper into peonage. The democratic institutions remained only as a veneer for oligarchic rule.

 

The Revolution

 

In Nov., 1910, an idealistic liberal leader, Francisco I. Madero, began an armed revolt against Díaz, who had gone back on his word not to seek reelection in 1910. Madero was quickly successful, and in May, 1911, Díaz resigned and went into exile. Madero was elected president in Nov., 1911. Well-meaning but ineffectual, he was attacked by conservatives and revolutionaries alike and was harassed by U.S. ambassador Henry Lane Wilson. In Feb., 1913, Madero was overthrown by his general, Victoriano Huerta, and was murdered. President Huerta's regime was dictatorial and repressive, and revolts soon broke out under the leadership of Venustiano Carranza, Francisco “Pancho” Villa, and Emiliano Zapata.

 

In 1914, Huerta resigned, partly because of U.S. military intervention ordered by President Woodrow Wilson, and Carranza became president. Civil war broke out again in late 1914, but by the end of 1915 Carranza had established control over the country, although Villa and Zapata maintained opposition bands for a number of years. In 1916, Villa led a raid into the United States, which resulted in an unsuccessful U.S. expedition into Mexico. Carranza sponsored the constitution of 1917, which was similar to the 1857 constitution, but which in addition provided for the nationalization of mineral resources, for the restoration of communal lands to native peoples, for the separation of church and state, and for educational, agrarian, and labor reforms. However, most provisions of the constitution were not implemented, and in 1920 Carranza was deposed by General Álvaro Obregón, his former military chief, who was subsequently elected president.

 

Under the Obregón regime (1920–24) some land was redistributed and, under the leadership of José Vasconcelos, numerous schools were built. Obregón was succeeded by Plutarco Elías Calles, who continued the agrarian and educational programs, but who became embroiled in serious controversies with the United States over rights to petroleum and with the church over the separation of church and state. In some regions militant Catholic peasants, called Cristeros because of their rallying cry—Viva Cristo Rey! long live Christ the King—were in open revolt, and in the country as a whole from 1926 to 1929 church schools were closed and no church services were held. Both controversies subsided, partly because of the intervention of the U.S. ambassador, Dwight Morrow. Reelected in 1928, Obregón was assassinated before taking office.

 

Calles remained the most powerful person in Mexico during the administrations of Portes Gil (1928–30), Ortiz Rubio (1930–32), and Abelardo Rodríguez (1932–34). In 1929 he organized the National Revolutionary party (in 1938 renamed the Mexican Revolutionary party and in 1946 the Institutional Revolutionary party), the chief political party of 20th-century Mexico. Calles's hegemony ended, however, with the inauguration (1934) of Lázaro Cárdenas. Vigorous and idealistic, Cárdenas instituted reforms to improve the lot of the underprivileged. He redistributed much land under the ejido system and supported the Mexican labor movement, which had suffered a setback under Calles (see Lombardo Toledano, Vicente for more detail).

 

Railroads were nationalized, and foreign holdings, particularly in petroleum fields, were expropriated with compensation. Educational opportunities were increased and illiteracy reduced, medical facilities were extended, transport and communications were improved, and plans were drawn up for land reclamation and for hydroelectric and industrial projects. A settlement with the church was reached. The pace of reform slowed under Manuel Ávila Camacho, who became president in 1940. Relations with the United States improved. In World War II, Mexico declared war (1942) on the Axis powers; it made substantial contributions to the Allied cause and also received considerable U.S. economic aid.

 

Developments since 1945

 

Since World War II, Mexico has enjoyed considerable economic development, but most of the benefits have accrued to the middle and upper classes; the relative welfare of poorer persons (small farmers and laborers) has remained the same or deteriorated. Under President Miguel Alemán (1946–52) vast irrigation projects and hydroelectric plants were constructed, and industrialization advanced rapidly. The improvements made in Mexico's rail network during World War II and the opening of the Inter-American Highway after the war encouraged more U.S. tourists to visit Mexico and thus increased the commercial value of one of the country's greatest assets, the beauty of its land.

 

Under the moderate presidents Adolfo Ruiz Cortines (1952–58), Adolfo López Mateos (1958–64), and Gustavo Díaz Ordaz (1964–70), the government continued to play a dominant role in national affairs, and attempts were made to improve the conditions of the lower classes. The tax structure was reformed somewhat, some large estates were confiscated and the land redistributed, and educational opportunities in rural areas were increased. In foreign affairs, Mexico maintained friendly relations with the United States, ratifying treaties settling long-standing border disputes in the El Paso, Tex., region (1964, 1967) and calling (1965) for the United States to maintain the freshwater content of the Colorado River, whose waters are used for irrigation in Mexico. Unlike most other American nations, Mexico maintained continuous diplomatic relations with Communist Cuba, but it supported the United States during the Cuban Missile Crisis (1962).

 

In 1970, Luis Echeverría Álvarez became president. He took steps toward reforming the government, but the first years of his term were marked by clashes between the left and right and attacks by guerrilas. He was succeeded by José López Portillo in 1976. In the 1970s, Mexico continued to expand its economy, borrowing significantly on the strength of its petroleum reserves. When oil prices fell sharply in the early 1980s, the country's ability to meet its international debt obligations was severely strained. Unemployment and inflation soared, private and foreign investment dropped sharply, and the population began migrating from rural areas into the cities and to the United States. The government of Miguel de la Madrid Hurtado, who was elected president in 1982, responded with economic austerity policies, a renegotiation of Mexico's international debt, and a loosening of direct foreign investment regulations.

 

The economic crisis, the austerity measures imposed in response, and the added economic blow of a major earthquake in Mexico City in 1985 all contributed to popular discontent with the Institutional Revolutionary party (PRI). Although the party's candidate Carlos Salinas de Gortari won the presidency in 1988, his margin of victory was extremely narrow and was marred by charges of fraud, which much later (2004) were acknowledged by de la Madrid Hurtado to be true. Salinas continued the economic reform begun in the early 1980s, encouraging foreign investment, privatizing many national industries, investigating corruption in public offices, and working toward increased trade with the United States. The illegal flow of immigrants and drugs across the border, however, remained a problem in Mexico's relations with the United States.

 

In 1992, Mexico, the United States, and Canada negotiated the North American Free Trade Agreement (NAFTA), which erased many trade barriers and created a trading bloc of 370 million people. However, in 1994 a Mayan-based uprising in the southern state of Chiapas provided a reminder of the poverty in which many Mexicans still lived. After protracted negotiations, accords providing limited autonomy for the Indians of the region were agreed to in early 1996, but the accords were not acted on by the government until 2001, when a version that contained watered-down clauses on Indian autonomy and control of natural resources were enacted as constitutional reforms. Also in 1994, Luis Donaldo Colosio Murrieta, the PRI's presidential candidate, was assassinated for reasons that still remain unclear.

 

In Aug., 1994, in an election that was closely watched by international monitors to prevent fraud, the PRI's new candidate, Ernesto Zedillo Ponce de León, won the presidency by a narrow but mainly unquestioned margin. Shortly after his inauguration in December, the government allowed the peso to float against the dollar; the peso plunged rapidly, investors backed out of Mexican markets, and the country was propelled into an economic crisis. In Feb., 1995, Mexico reached agreement with the United States on a $12.5 billion rescue plan, which provided U.S. funds to shore up Mexican banks while requiring Mexico to adopt stringent austerity measures and giving the United States a significant say in Mexican economic policies. Mexico was subsequently able to refinance the debt privately at a lower rate, and much of the loan was paid back in 1996, more than three years ahead of schedule. Ex-president Salinas was blamed for contributing to Mexico's economic crisis and was alleged to have been involved in misdeeds ranging from corruption to political assassinations.

 

In 1996 the PRI and the three main opposition parties signed an agreement designed to democratize the electoral process and further reduce the influence of the PRI. Although the PRI won the largest number of seats in the July, 1997, congressional elections, it did not have a majority and a four-party opposition coalition took control of the Chamber of Deputies. The two leading coalition partners were the conservative National Action party (PAN) and the left-of-center Party of the Democratic Revolution (PRD). Early in 1998, Mexico and Norway joined with members of the Organization of Petroleum Exporting Countries to set production limits on petroleum and thus bolster sagging world oil prices, which were having a devastating impact on Mexico's economy.

 

In the 2000 national elections, the PRI candidate, Francisco Labastida Ochoa, lost to the PAN candidate, Vicente Fox Quesada, a historic opposition victory that ended more than 70 years of PRI rule. The PRI and PAN each won two fifths of the seats in the lower house of the congress, but the PRI won nearly half the seats in the senate. Fox moved quickly to demilitarize the ongoing conflict in Chiapas and made concessions in order to win resumption of the negotiations, but he was unable to win passage of constitutional reforms in the form agreed to. Fox has had difficult relations with the congress, which has become more of an independent power within the government, and has been unable to rely on the support of members from his own party. The 2003 elections for the lower house, in which PAN lost more than 50 seats, did not improve this situation, and PAN suffered further losses in state elections in 2004 and 2005.

 

President Fox's hopes for close relations with the Bush administration (he had been friendly with Bush when the latter was governor of Texas) went unfulfilled after the Sept. 11, 2001, terrorist attacks on the United States, when the U.S. government refocused its attention on Al Qaeda and other foreign threats. As a result, Fox's desire to reach an agreement that would establish a less restrictive immigration policy that would benefit the many Mexicans working illegally in the United States seemed likely to be unrealized. Mexico also was adversely affected by the economic slowdown in the United States in 2001–2; some 240,000 jobs in the maquiladoras were lost as result.

 

In Apr., 2004, Mexico City's mayor, Andrés Manuel Lopéz Obrador, was arrested on charges of disobeying court orders in a land dispute, a move that was seen by many as a political attempt to bar the popular mayor from running in the 2006 presidential election. The arrest led to a protest march in the capital by perhaps as many as a million people. President Fox subsequently fired the federal attorney general, whose office had prosecuted Lopéz Obrador, and the charges were dropped in May, but the incident further damaged Fox's standing.

 

Illegal immigration from Mexico to the United States became a source of tension in Mexican-American relations in 2005. In the American Southwest governors publicly complained of the problem, and private American anti-immigration groups organized their own patrols along the border. U.S. President Bush failed to win passage of his proposed immigration overhaul bill, but in December the U.S. House of Representatives passed a measure calling for building a new border fence with security cameras and for criminalizing illegal immigration. The House's move especially angered many Mexicans, and it was vigorously denounced by President Fox, but legislation calling for 700 mi (1,100 km) of additional fencing along the border was passed by the U.S. Congress and signed by President Bush in Oct., 2006.

 

In the July, 2006, elections, the PAN candidate, Felipe Calderón, narrowly edged Lopéz Obrador, the Democratic Revolutionary party (PRD) candidate, winning by less than 0.6% of the vote; the PRI candidate placed third. Lopéz Obrador accused Calderón of winning by fraud, and sought to have the election court order a ballot-by-ballot recount. There was no clear evidence of fraud, however, and European Union monitors certified the election as free of irregularities. PAN also won the largest number of legislative seats, with the PRD placing second. A partial recount was ultimately ordered, but the resulting changes in the vote had no affect on the outcome. Lopéz Obrador's supporters mounted significant demonstrations beginning in July, but after the vote was finalized in September the protests petered out, despite the candidate's refusal to recognize Calderón's victory. Calderón, who took office in December, moved forcefully in his first months in office against organized crime and drug cartels, using federal forces in operations involving seven states in an effort to combat crime and drug-related violence.

 

Bibliography

 

A number of historical sources have been translated into English, notably the letters of Cortés and the account of the conquest by Bernal Díaz del Castillo. See also W. H. Prescott, The Conquest of Mexico (3 vol., 1843; many subsequent ed.); O. Paz, The Labyrinth of Solitude (tr. 1962) and The Other Mexico (tr. 1972); J. W. Wilkie, The Mexican Revolution (2d ed. 1970); A. J. Hanna and K. A. Hanna, Napoleon III and Mexico (1971); N. Cheetham, A History of Mexico (1972); P. Calvert, Mexico (1973); N. Hamilton and T. Harding, Modern Mexico (1986); G. Philip, ed., The Mexican Economy (1988); R. E. Ruiz, Triumphs and Tragedy (1992); H. Thomas, Conquest: Montezuma, Cortés, and the Fall of Old Mexico (1994); A. Oppenheimer, Bordering on Chaos (1996); E. Krauze, Mexico: Biography of Power (1997).

 

 

External Links

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• US awards 274 leases in Aug. Gulf of Mexico sale

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  Journalist attacked in Acapulco, Mexico.

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  Mexicans brought some holiday cheer, pain on ice

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