country study mexico
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Country study-MexicoPresented by:-
Group no.6
Aashi Gupta (02)
Disha Kothari (17) Madhuri Deshmukh (28)
Poonam Bansal(37)
Santosh Linkan (45)
Vinay Dixit (57)
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Mexico-Location
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Mexico at a glanceOfficial Name United Mexican States
(Estados Unidos Mexicanos)Capital Mexico CitySurface area 1,972,550 square km, with 31 states & 1
Federal District
Population97.3 m (average annual growth 1.9%)Birth
rate: 19.4/1000;Infant mortality rate: 17.8/1000;Life expectancy: 76.2 years;Density per sq km: 57
Nature of the state A federal system of government, vastlydifferent topography and peoples
Literacy rate 91%Official language Spanish, various Mayan, Nahuatl, &
54 indigenous languagesHead of government(president) Mr. Felipe de Jess Caldern Hinojosa (PAN-
2006)
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Mexico at a glanceMonetary Unit 1 Peso (MXN)= 100 Centavos
Exchange Rate (24.7.09) USD 1 = MXN 13.2
GDP (PPP) (2008 est.) US$ 1,559 billion
GDP Growth % (2008) 1.3
GDP Per Capita(PPP) (2008) $14,200
GDP by Sectors %Agriculture: 4Industry: 26.5Services: 69.5
Foreign Trade US$ (2008)Exports
Imports
602.7 billion
292.6 billion 310.1 billion
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5th largest country in the Americas by total area and the 13 th largest independent nation in the
world
It is the 11th most populous country(most populous Spanish-speaking country)
Mexico has one of the world's largest economies, and is considered both a Regional power and
Middle power
In addition, Mexico was the 1st Latin American member of the Organization for Economic Co-
operation and Development OECD (since 1994) Firmly established upper-middle income country
Mexico is considered a newly industrialized country and an emerging power
It has 13th largest nominal GDP & 11th largest by purchasing power parity
The economy is strongly linked to those of its North American Free Trade Agreement (NAFTA)
partners, especially the United States
In recent years:
Political modernization and the anchoring of democracy
The integration into wider political and economic blocs including modifications in the historic
relationship with the United States
Mexico at a glance
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Geography, Culture, And Food
Mexico is bordered by the United States to the north and Belize and
Guatemala to the southeast. In the east are the Gulf of Mexico and the
Bay of Campeche.
Ethnicity/race: Mestizo (Amerindian-Spanish) 60%, Amerindian 30%,
White 9%, other 1% Religions: Roman Catholic 89%, Protestant 6%, other 5%
modern-day Mexican culture is deeply influenced by the Catholic Church
88%, generally traditional. Mexican people are by and large warm and
vivacious individuals with an incredible zest for life.
Strong provincial & local cultural identities
Etiquette is strongly informed by culture of social hierarchies & distance
The growth rate has slowed, but the population is still very young
The heart of most Mexican dishes: corn, hot peppers (chiles), & beans
Mexico at a glance
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Mexicos Import & Export Statistics(2010)
Exports ($303 billion ): manufactured goods, oil and oil products, silver,fruits, vegetables, coffee, cotton
Partners: US (80.5 % of total exports), Canada (3.6%), Germany (1.4%)
Imports ($306 billion): metal working machines, steel mill products,agricultural machinery, electrical equipment, car parts for assembly, repairparts for motor vehicles, aircraft and aircraft parts
Partners: US (48%), China (13.5%), Japan (4.8 %), South Korea (4.6 %),Germany (4.1 %)
Arable land: 13%. Agriculture: corn, wheat, soybeans, rice, beans,cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products.
Labor force: 45.38 million; agriculture 18%, industry 24%, services 58%
(2009). Industries: food and beverages, tobacco, chemicals, iron and steel,
petroleum, mining, textiles, clothing, motor vehicles, consumer durables,tourism.
Natural resources: petroleum, silver, copper, gold, lead, zinc, natural gas,
timber.
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Political factors include government policies relating to the
industry, tax policies, laws and regulations, trade restrictionsand tariffs
Economic factors relate to changes in the wider economysuch as economic growth, interest rates, exchange ratesand inflation rate
Social factors often look at the cultural aspects and includehealth consciousness, population growth rate, agedistribution, changes in tastes and buying patterns
Technological Factors relate to the application of new
inventions and ideas such as R&D activity, automation,technology incentives and the rate of technological change
Legal Factors on Mexico provides information about thelegal structure, corporate laws, business set-up proceduresand the tax regime
Environmental Factors provides information on
PESTLE
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Political analysis Government is Representative, Democratic And Republican
Mexican Revolution: 1910 Institutional Revolutionary Party: Started Maximato
Political modernization and the anchoring of democracy: 1970s
Political forces such as the PAN (Partido Accin Nacional orNational Action Party) and the PDR (Partido de la Revolucin
Democrtica or Party of the Democratic Revolution) challenged thePRI and eventually, in 2000, this led to the electoral victory of thePAN under President Vicente Fox. This was the first time a non-PRIcandidate had won a presidential election since 1929
North American Free Trade Agreements and their enforcement in
January 1994 resulted in political stability
Connections with U.S also helped Mexico in trade
Politics are still corrupt and scandal-ridden, with parties oftenfocused more on individuals than on programs for action.
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Political analysis Fiscal position is good, deficit has come down to around 2% of GDP.
Mexico's tax/GDP ratio is one of the lowest in the OECD, at 19% if oil revenueswere excluded falls to 15%
Tax base is narrow, reflecting numerous tax exemptions and special regimes and
there is a high level of informality
Oil-revenue is volatile. As a result, fiscal policy is heavily influenced by oil cycle
Even if Mexico stopped production of oil, oil extraction royalties, VAT and excise
taxes on the sale of oil products to consumers would be collected even if all oil
were imported
Key issues large dependency of the budget on oil revenue
Tax reform is needed to reduce distortions and increase revenue. Higher tax
revenue is required to provide stable financing
Lowest revenue raising capacity from VAT, has not broaden tax base
Tax revenue collection is seriously affected by weak compliance, the registered
individuals with the tax administration is less than 20% of the labour force
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Political analysis Expanded export of manufactured goods, particularly in IT
Industries Annual average growth rate in manufacturing value added has
been closer to 3%
Focusing Key policies, including major public investment ininfrastructure; import tariffs, licenses, and quotas to buffer
domestic firms and enhance their technological capabilities;exchange rate controls, and direct government investment in keysectors
State Owned Enterprises (SOEs) in petroleum, steel and other
industries. These sectors are linked to chemical, machinery,transport and textiles industries and receives over 60 % of allinvestment, public and private
Mexico established export-processing zones calledMAQUILADORAS. Maquiladoras are in-bond assembly factories
where imports of unfinished goods enter Mexico duty-free
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Economic analysis
Mexico has the 13th largest nominal GDP and the 11th largestby purchasing power parity
A nation of middle-income status
GDP annual average growth:5.2%
The Mexican economy is expected to nearly triple by 2020 &by 2050 Mexico will have the 5th largest economy in the world
Poverty has decreased from 24.2% to 17.6% in the generalpopulation
Income in a typical urbanized was $26,654, a rate higher thanadvanced nations like South Korea or Taiwan, while theaverage income in rural areas just miles away was only$8,403, a rate comparable to developing countries such asRussia or Turkey
The EU-Mexico FTA, will improve the declining trade, anumber of special trade committees were established.
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During the first three quarters of 2010, the United States hada $46.0 billion trade deficit with Mexico
In August 2010 Mexico surpassed France to became the 9thlargest holder of US debt
Mexico is the largest North American auto-producing nation,recently surpassing Canada and the U.S
The industry produces technologically complex componentsand engages in some research and development activities
The "Big Three" (General Motors, Ford and Chrysler) havebeen operating in Mexico since the 1930s, while Volkswagen
and Nissan built their plants in the 1960s Dependent on U.S economy: The growth in U.S. demand, the
increase in U.S. asset prices, the rise in the price of oil, andlarge foreign direct investment (FDI) inflows were majorfactors behind Mexicos boom in 2000, but 80% dependence
is deeply disturbing, if US economy weakens
Cont.
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Social Analysis
Social situation is characterised by an enormous duality The programmes focussed on investing in human capital,
promoting income and employment opportunities andimproving infrastructure in poor areas
The National Development Plan 2001-2006 includes socialpolicies as one of the highest priorities of the country
It underlines education as the top priority for thedevelopment of the country
Social development expenditure for 2001 amounts to 6.2% of
GDP, which represents a real increase of 4.7% in absoluteterms from 2000
Poverty: poverty and extreme poverty affect more than 50%of the population
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Technological analysis In recent years, the biggest scientific project being developed
in Mexico was the construction of the Large MillimeterTelescope (Gran Telescopio Milimtrico, GMT), the world'slargest and most sensitive single-aperture telescope in itsfrequency range
The electronics industry of Mexico has grown enormously inthe last decade
In 2007 Mexico surpassed South Korea as the second largestmanufacturer of televisions
In 2008 Mexico surpassed China, South Korea and Taiwan tobecome the largest producer of smart-phones in the world
Mexico has decided to reinforce its S&T investment (US$ 1685 million for the period 1998-2000) by requesting a loan
from the World Bank for a Knowledge and Innovation Project -
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Environmental analysis Economic and industrial development in Mexico have
subjected the environment to intense pressures, such as highpollution levels and, often unsustainable use of the naturalresources
A single ministry responsible for environment was created in
1994 it is estimated that the cost of annual environmental
degradation is equivalent to about 10% of GDP
National Forest Programme & National Programme on
Environment and Natural Resources 2001-2006 wereestablished
-decrease the pressure on forest resources
-development of forest resources; wood production;
environmental and conservation services
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Legal analysis Public security is enacted at the three levels of
government, each of which has different prerogativesand responsibilities
Local and state police department are primarily in
charge of law enforcement
The Mexican Federal Police is in charge of specializedduties
The Global Integrity Index which measures theexistence and effectiveness of national anti-corruptionmechanisms rated Mexico 31st behind Kenya, Thailand,and Russia
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Security Context Highly complex one, affected by United States,
complexities in unusual Defence Organization
Internal Security
Threats to its internal security including dissident groupswho use violence to pressure the government,narcotrafficking, trafficking in persons, illegal migration,illegal arms transfers, and other elements of internationalcrime.
External SecurityMexico does not have any real external enemies
International disputes: with the U.S. over water-sharingarrangements
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INDIA - MEXICO Similarities in geo-climatic conditions, biodiversity, physiognomy and people,
cultural and family values Mexico and India worked together closely as members of the UN, G-77, G-15
and G-6 (nuclear disarmament)
Present Mexican government considers India as one of the potential strategic
partners, economically, as well as for multilateral approaches together on major
global issues and trends Recent Important Bilateral Agreements
Mutual Legal Assistance Treaty in Criminal Matters (2007)
Double Taxation Avoidance Agreement (2007)
Bilateral Investment Promotion and Protection Agreement (2007) for 10 year
MOU on Cooperation in the Field of New and Renewable Energy, trade,
investment, & economic cooperation (2008)
Both sides agreed to double bilateral trade to around $4 billion by 2010
TCS has opened software center in Guadalajara, Jalisco, mexico 30th may
2007
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INDIA - MEXICO Main components ofIndias export to Mexico: Engineering goods, chemicals
and pharmaceuticals, gems & jewellery, textiles, agriculture products
Main components ofMexicos export to India: Crude oil, fertilizers, iron &
steel, electrical and mechanical equipment's, photographic products, auto parts
Potential Areas for Bilateral Trade: Software&IT, pharmaceuticals, chemicals,
engineering goods, renewable energy, biotechnology, auto parts, minerals
Investments and Joint Ventures: Investments from India in Mexico have been
around US$ 1.5 billion
India-Mexico Business Chamber (IMBC): launched in Mexico with the
objective to play a vital, catalytic role towards full realization of the potential ofbilateral trade and economic relations through enhanced business-to-business
contacts and interaction with the concerned governmental authorities
Established Chamber of India Mexico Commerce, Industry, Trade, Tourism
and Culture CIMCCITT to promote and support the business initiatives
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Conclusion
The country does seem to be on the road to aneven more stable and less 'partial' democracy if thesecurity and economic situations can be made tohold steady and not worsen
The government must somehow get a grip of thepublic security dimension of national life if
- democracy is to flourish,
- if investment is still to be encouraged- if confidence in the state is to be sustained.
U.S. and other assistance can help but it is difficult
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References Stabilization And Adjustment Programmes And
Policies.pdf
-Nora Lustig(El Colegio de Mexico)
Mexico: Current and Future Political, Economicand Security Trends.pdf
-Hal Klepak, Ph.D(Professor Emeritus ofStrategy and Latin American History)
Country strategy paper(2002-06)-Mexico.pdf
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