country study mexico

8/2/2019 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
http://en.wikipedia.org/wiki/File:Flag_of_Mexico.svg


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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.
http://en.wikipedia.org/wiki/File:Flag_of_Mexico.svghttp://en.wikipedia.org/wiki/File:Flag_of_Mexico.svghttp://en.wikipedia.org/wiki/File:Flag_of_Mexico.svg


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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.
http://en.wikipedia.org/wiki/File:Flag_of_Mexico.svghttp://en.wikipedia.org/wiki/File:Flag_of_Mexico.svg


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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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