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North & Central America and Caribbean
Mexico |
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Last reviewed: 10 September 2009 |
Country information
MEXICO TODAY
Country Facts
Area: 1,964,375 sq km, of which 1,959,248 sq km are continental and 5,127 sq km are islands.
Population: 111 million (2009 est)
Capital City: Mexico City (Metropolitan area 22 million est 2008)
People: The people of Mexico today are a mixture of descendants from Spanish and other immigrants, mainly Europeans, who settled in Mexico from the 16th century onwards, and mestizos - mixed European and indigenous ancestry, as well as the many indigenous groups.
Languages: The official language is Spanish. There are at least 62 indigenous languages.
Religion(s): Roman Catholic 89%, Protestant 6%, 5% other denomination
Currency: Mexican Peso, divided into 100 centavos
Major Political Parties:Partido Acción Nacional (PAN); Partido de la Revolución Democrática (PRD); Partido Revolucionario Institucional (PRI).
Government: Mexico has a Federal republic system of government covering the 31 states and the Federal District of Mexico with powers separated into 3 branches: independent executive (President), legislative (Congress) and judicial (Supreme Court of Justice, federal and local systems). The President is elected for a 6-year term and may not hold office a second time. Congress is bi-cameral and consists of a Senate (128 seats) and a Chamber of Deputies (500 seats). The judges making up the Supreme Court are appointed by the President, with the consent of the Senate.
Head of State: President Felipe Calderón Hinojosa
Prime Minister/Premier: Not applicable
Foreign Minister: Patricia Espinosa Castellano
HEALTH AND SOCIAL
Not all of Mexico has benefited from the economic transformation. Mexico's social indicators are still poor and wealth distribution is uneven. Living standards are higher in the north, near the US border, than in the poorer, rural south. According to the World Bank, around 40% of the population lives in poverty, and some 15% suffer extreme poverty. About one quarter of those living in extreme poverty live in urban areas in the states in the centre of the country. Every Mexican child has the right to free primary education, although many leave school early to help support their families. In 2006, only 88% of Mexicans had access to drinking water. Despite government efforts, the high incidence of infant mortality and of nutritional and infectious diseases show that major infrastructure improvements are needed, particularly in the South. The proportion of GDP spent on health services, although it has been increased in recent years, is still lower than in 1960. In 2008 it was estimated that 200,000 people had HIV/AIDS. This group is growing and was estimated to represent 0.3% of the adult population.
Life expectancy: 76.6 years (2007)
Fertility rate: 2.34 (2009) (births per woman)
Infant mortality rate: 18.42/1,000 (2009)
Literacy rate: 92% (of adult population)
ECONOMY
Basic Economic Facts
Nominal GDP: US$1,559 billion (2008 at PPP rates)
Nominal GDP per head: US$14,200 (2008)
Annual growth: 1.3% in 2003, 4.2% in 2004, 3.0% in 2005,4.8% in 2006, 3.3% in 2007, 1.4% in 2008.
Inflation: 4.0% in 2003, 5.2% in 2004, 3.3% in 2005, 4.0% in 2006, 3.76% in 2007, 6.3% in 2008.
Major industries: Manufacturing (including food, beverages, textiles, clothing, tobacco, chemicals, and motor vehicles); Commerce (restaurants and hotels); Transport and Communication; Financial Services; Tourism; Oil and gas and Electricity.
Major Trading Partners:
Exports (2008): US 80.2%, EU 5.8%, Canada 2.4%
Imports (2008): US 49.2%, Canada 3.0%, EU 12.6%, China 11.2%, Japan 7.2%.
Mexico's economy is the world’s thirteenth largest: about the same size as South Korea's and Russia's. It is a free market economy, with a mix of services, industry and agriculture. The country has many structural problems still to tackle as it seeks to modernise the economy, respond to the challenge of globalisation and raise living standards.
Mexico’s annual growth rates have hovered at an average of 3 – 4% in the 10 years leading up to the global economic crisis. Despite emerging relatively unscathed and with strong and stable financial institutions from the initial financial crisis in late 2008, Mexico was hit heavily by the resulting global economic downturn. As a result, the Mexican economy is expected to decline by around 7.0% in 2009, with a bounce back to +3.0% in 2010.
Inflation remains stable, although above the independent central bank’s 3%+/-1% tolerance limit. Income is very unequally distributed, between the richer and more industrial northern parts and the poorer, more agricultural, south. About 40% of the population live in poverty.
Mexico moved from a relatively closed economy to an almost completely open one when it joined the General Agreement on Tariffs and Trade (now the World Trade Organisation) in 1985. It continued this opening through the North American Free Trade Agreement (NAFTA) in 1994, which gives it access to the huge American and Canadian markets. In total, Mexico has Free Trade Agreements (FTAs) with 44 countries, including with the EU and with Japan.
Despite these broadly spread FTAs, Mexico's economy remains closely linked to the United States. Economic ups and downs in the US greatly influence Mexico's economic performance, and the US economic slowdown has dragged down Mexico’s exports, pushing the economy in to a very deep recession.
Mexico is one of the world’s top oil producers. Pemex, the state-owned oil company, has a constitutional monopoly on the exploitation of Mexico’s oil reserves. Although oil contributes only around 3% of overall GDP, the government is highly dependent on oil revenues for its income.
More than 12m Mexicans live and work in the US. A considerable number of these enter the country illegally. Collectively, the Mexican Diaspora provides more than US$20bn in remittances annually to their families in Mexico, making this the second largest source of revenue for the Mexican economy.
Mexico has rapidly developed its tourist sector in recent years. Tourism is now the fourth largest source of currency income for Mexico. The resorts of the Caribbean coast of the Yucatan peninsula (especially Cancun, Playa del Carmen and Cozumel) have grown very quickly. The Pacific coast (Puerto Vallarta, Huatulco, Los Cabos) have also increased in popularity in recent years.
Tourism was heavily affected in 2009 by an outbreak of H1N1 influenza in Mexico. While the disease has fortunately proved to be relatively mild in most cases, the negative publicity around the outbreak resulted in a significant drop off in both domestic and international tourism. Neither the WHO nor the FCO advise against travel to Mexico based on Swine flu, and the industry is now beginning to recover.
HISTORY
300–900 The Classical Period; Construction of Teotihuacan complex; Monte Albán and the Zapoteca Culture; The Maya Culture
900–1521 The Post Classical Period; Pre-Hispanic Era in Oaxaca; The Tolteca and Chichimeca Cultures
1325–1521 The Aztecs and the Founding of Tenochtitlan
1519 Founding of Veracruz by Hernan Cortés
1521–1810 The Spanish Conquest; The Colonial Period
1531 The Apparition of the Virgin of Guadalupe (the Madonna with Indian features who miraculously appeared to an Indian, St Juan Diego near Mexico City)
1551 Founding of the University of Mexico, Mexico City. The first University on the North or South American Continents
1656 Inauguration of the first Cathedral in Mexico
1810–1821 Mexico's Independence struggle from Spain
1848 Loss of Texas and part of California to the USA
1864–1867 Maximilian of Austria's Empire
1910 The Mexican Revolution
1911–1919 The Zapatista Movement and Civil War
1917 Mexican Constitution drawn up
1929 Beginning of effective one-party (PRI) rule
1968 Student protests broken up by army and paramilitary forces prior to Mexico City Olympic Games – scores of students killed.
1982 Debt crisis breaks. President Lopez Portillo nationalises private banks
1985 Major earthquake hits Mexico City killing thousands
1994 North American Free Trade Agreement comes into force
2000 Presidential Elections bring an end to 71 years of PRI rule President Fox (Partido Acción Nacional) took office on 1 December
2002 1 January, Mexico takes its seat on the UN Security Council for the years 2002/2003
2006 Presidential and Congressional elections took place on 2 July. On 5 September, the Federal Electoral Court declared Felipe Calderón (PAN) the winner of the election and President-elect. 1 December 2006: Calderón inaugurated as President.
2009 1 January, Mexico takes its seat on the UN Security Council for the years 2009/10.
2009 Parliamentary electiions put the PRI party back in control of Congress.
INTERNATIONAL RELATIONS
Mexico's foreign policy is traditionally non-interventionist. Recently, under former President Fox and now under President Calderón, Mexico has developed a more dynamic foreign policy and become a more active participant in multilateral affairs, climate change, human rights and regional issues. For example, Mexico has been active as a member of the G8/G5 grouping, has participated in the G20 forum and as a non-permanent member of the UN Security Council for 2009/10.
Relations with Neighbours
Mexico has good relations with the US and Canada, its partners in the North American Free Trade Agreement (1994) –which created the world’s largest free trade area, linking 439 million people producing $15.3 trillion worth of goods and services annually. Millions of Mexicans live in the US, often illegally, and a primary objective of Mexican foreign policy is to secure a framework for legal and safe immigration to the US, including the regularisation of illegal migrants already there. Mexico continues to encourage a global approach towards this subject stressing the contribution of migrant workers to the American economy and society.
The US-sponsored Merida initiative approved in March 2007 constitutes a significant aspect of US assistance to Mexico. The initiative is a commitment to help Mexico in its fight against the drugs cartels, $700m of funding in total has been granted for Mexico, with $450m still to be approved for 2010. The package includes $5m funding for human rights training for Mexican police, and $1m to support human rights monitoring by the UN High Commissioner for Human Right’s Office.
Mexico is keen to develop its relations with its southern neighbours in Central America. The "Puebla-Panama Plan " is designed to encourage comprehensive growth in Central America and nine southern states of Mexico, based on economic development, social inclusion and sustainable environment. Mexico has also developed a special relationship with the Caribbean region, through high-level meetings with Heads of State or Heads of Government of the region and the dialogue between Mexico and CARICOM.
Relations with Cuba are improving and diplomatic relations have been reinstated with Venezuela following the recall of Ambassadors in 2005.
Mexico's Relations with the International Community
Mexico has an active presence in the main international organisations where the UK has been an important actor. As a founding member of the United Nations, Mexico has remained a strong advocate of multilateralism. It served on the UN Security Council in 1946, 1980-81 2002-03, 2009-10. Mexico provided the first Chairman of the new Human Rights Council, is the only Latin American member of the Organisation for Economic Co-operation and Development (OECD), and is playing an important role in the current WTO’s Doha Development Agenda negotiations.
Mexico plays a pivotal role in several regional organisations and mechanisms, including the Organisation of American States, the Rio Group, the Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean, the North American Free Trade Agreement, the EU/Latin America and the Caribbean Summit, and the Asia-Pacific Economic Co-operation (a grouping of Pacific rim countries).
Mexico also belongs to the G20 finance group of industrial countries and the G20 trade group of developing countries. It has participated in the G8+5 outreach group of emerging economies (along with India, China, Brazil and South Africa) since the 2005 G8 summit in Gleneagles.
Mexico hosted the WTO conference in Cancún in September 2003, the signing ceremony of the UN Convention Against Corruption in December 2003 and the 110th Assembly of the Inter-Parliamentary Union (IPU) in April 2004. The third EU/Latin America and Caribbean Summit was held in Guadalajara in May 2004. Mexico hosted the World Water Forum in March 2006 and a Post-Gleneagles follow-up Ministerial meeting on Climate Change in October 2006 in Monterrey and the “scaling up” workshop on climate change in Veracruz in July 2007.
Mexico hosted the Major Economics Forum in June 2009.
Mexico's Relations with the UK
Mexico and UK enjoy very good relations. President Calderón and Senora Zavala accepted an invitation from HM The Queen for an official State Visit to the UK in March 2009. Previously, Calderon and five of his Cabinet Ministers visited the UK in January 2007, meeting the Prime Minister, the Chancellor and the Foreign Secretary. There have been a large number of other recent inward and outward visits – see section below.
In December 2007, the Foreign and Commonwealth Office hosted the High Level Economic Talks between the UK and Mexico. Mexico reciprocated by hosting the talks in December 2008.
In April 2008, the Foreign and Commonwealth Office hosted the annual High Level Political Talks between the UK and Mexico.
At all these meetings, a wide range of bilateral, regional and international issues were discussedresulting in, among other things, a bilateral agreement on the urgency of tackling climate change, a memorandum of understanding on Money Laundering, and a joint action plan between UKTI and ProMexico to promote bilateral trade and investment.
Cultural Relations with the UK
The British Council Mexico, based in Mexico City, promotes educational and cultural relations between the UK and Mexico.
British Council, Mexico
Recent Inward Visits
2009
- President Calderon with Senora Zavala and Cabinet Members for the State Visti.
- Vice Foreign Secretary, Lourdes Aranda
2008
- Foreign Secretary, Patricia Espinosa
- Luis Tellez, Secretary of State for Transport and Communication
- Human Rights Commission from the Mexican Chamber of Deputies
2007
- President Felipe Calderón and five Cabinet members.
- Dr Agustin Carstens, Finance Secretary of State.
- Martha Delgado, Secretary of the Environment of Mexico City.
- Dr. José Asomoza, Director General of the Centre for Advanced Research (CINVESTAV) together with five other officials from CINVESTAV’s regional offices.
- Fidel Herrera, Governor of the State of Veracruz.
- Dr. José Angel Córdova Villalobos, Secretary of State for Health.
- Judicial delegation, 16 member delegation of prosecutors, investigative police, judges, etc. (British Council/GOF).
- Mr. Jose Fernando Gonzalez, Under- Secretary for Basic Education, Ministry of Education (UKTI).
- Mexican Federal Competition Commission
2005
- President Fox visited the UK as part of the G8 outreach session on the global economy and climate change at Gleneagles and as a Guest of the Government in November 2002.
2009
- Ed Miliband, Minister for Energy and Climate Change
- John Sawers, UK Permanent Representative to the UN
- Anwar Choudhury, FCO Director for International Institutions
- Jonathan Porritt, Chair of the UK Sustainable Development Commission
2008
- Lord Digby Jones, Minister for Trade and Investment
- Meg Munn, FCO Minister for Mexico and Central America
- John Ashton, Special Representative for Climate Change, Foreign and Commonwealth Office
2007
- The Lord Mayor of London visited Mexico in September 2007.
- The Foreign and Commonwealth Minister for Mexico and Central America, Meg Munn, visited Mexico in September 2007.
2006
- The Foreign Secretary and the Environment Secretary visited Mexico. During the visit, the Foreign Secretary signed a Sustainable Development Dialogue between the UK and Mexico.
- Foreign Secretary, Margaret Beckett visited, for the post-Gleneagles follow-up Ministerial meeting on Climate Change in Monterrey. Environment Minister, David Miliband, and Energy Minister, Malcolm Wicks, also attended the event.
- The Deputy Prime Minister, John Prescott, attended the inauguration of President Calderón on 1 December 2006 in Mexico City.
2005
- FCO Minister for Latin America, Lord Triesman, held productive talks with Mexico’s Deputy Foreign Minister.
2004
- FCO Permanent-Under-Secretary (FCO) visited for the annual round of High Level Talks, which covered a range of global and regional issues of mutual interest, including UN reform.
2003
- Patricia Hewitt, Secretary of State for Trade and Industry led the UK delegation to the WTO Conference in Cancun in September. Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs also attended.
- Baroness Scotland represented the UK at the signing of the UN Convention Against Corruption.
- Lord Levy, the Prime Minister's Personal Envoy, visited Mexico in November.
2002
- Bill Rammell paid an official visit in December.
- The Prince of Wales visited Mexico in March 2002.
2001
- First bilateral visit to Mexico by a serving Prime Minister, together with Baroness Symons.
GEOGRAPHY
Mexico is a vast country bounded to the north over the Rio Grande by the United States and by Guatemala and Belize to the south. The Sierra Madre and Rocky Mountains run south from the border with the US. The interior consists of an elevated plateau. Northern Mexico is dry and desert-like, while the south is mountainous jungle containing the ruins of ancient Mayan and Aztec city complexes. Mexico is one of the world's most bio-diverse countries.
TRADE AND INVESTMENT
Trade and Investment with the UK
Mexico is the UK’s second largest export market in Latin America. UK exports of goods in 2008 were estimated at around £900m. Principal exports include automotive components, pharmaceuticals, power generating machinery and equipment. Good imports from Mexico in 2008 were estimated at around £785m.Mexico offers British business real opportunity, given the limited growth rates in traditional markets and the Mexican government and businesses' desire to reduce dependency on trade with the US. The past decade has seen sound management of public finances including continual economic growth and stable inflation.
UK Trade and Investment is the Government organisation that helps UK based companies succeed in international markets and assists overseas companies to bring high quality investment to the UK economy. Mexico is designated one of UKTI's priority High Growth Markets; the UKTI High Growth Markets Programme helps UK companies capitalise on major commercial opportunities in some of the world's fastest-growing markets. Mexico regularly ranks in the top 3 emerging markets in which to do business.
The UK is one of the top 10 investors in Mexico. Some of Britain's major investors include AstraZeneca, BAT, BP, Diageo, Glaxo Smith Kline, GKN, Shell, BT, BSI and Unilever. The most significant individual investment was the US$2bn purchase of a Mexican bank by HSBC in 2002. There have also been some important Mexican investments in the UK. In 2004 British RMC was bought by Mexican Cemex for US$5.8bn. Several other Mexican companies, including Grupo Gruma, also have significant investments in the UK.
A Double Taxation Agreement (DTA) between UK and Mexico was signed in 1994. A UK/Mexico Investment Promotion and Protection Agreement (IPPA) was ratified in 2007. The EU/Mexico Free Trade Association Agreement has eliminated all tariffs on EU-origin industrial goods.
What are the opportunities?
With a population of 111 million people, including a large and growing middle class, Mexico is a significant potential consumer market. It is the largest trading nation in Latin America and one of the world’s top ten.
Goldman Sachs and The Economist Intelligence Unit both believe that Mexico will be one of the five largest economies in the world by 2040.Demand for UK goods and services extends across the economy from sectors as diverse as education and automotive parts to food and drink.
The implementation of the EU/Mexico Free Trade Agreement signed in July 2000, led to the elimination of all tariffs on EU origin industrial goods on 1 January 2007. With no import duties, UK exporters can now compete on equal terms to US and Canadian exporters. Mexico may also serve as a useful basis for UK companies to manufacture given the free trade provisions of NAFTA, the North American Free Trade Area which means that Mexican manufactured goods can be imported free of tariffs to the USA and Canada.
The Mexican President launched a major National Infrastructure Plan in July 2007. Under the plan, a staggering $50 billion every year for the next 5 years will be invested in developing the country's ports, airports, roads and railways.
UK Development Assistance
The Department for International Development does not have a programme in Mexico.
The British Embassy runs the Strategic Programme Fund, with projects in the areas of climate change, human rights and economic reform. Interested NGOs and other organisations are welcome to approach the Embassy with details about objectives and draft proposals.
Information on the current priority areas for the Strategic Programme Fund activity in Mexico can be found on the Embassy’s website: British Embassy, Mexico City.
The British Embassy also runs the Sustainable Development Dialogue, funded by the UK’s Department for the Environment, Food and Rural Affairs. This Dialogue funds projects in six priority areas aimed at encouraging sustainable development: governance, climate change and energy, sustainable tourism, sustainable consumption and production, sustainable urban development and natural resources management.
POLITICS
On July 5th, Mexico held elections to renew 500 Congressional seats in the lower Chamber, the governorships of six states, the mayorships of 620 municipalities, and a total of 469 local Congressional seats in 12 states. The former long-time ruling Institutional Revolutionary Party (PRI) showed a dramatic comeback in all congressional, state, and local elections. In Congress, the president’s National Action Party (PAN) suffered a significant setback, losing its position as the party with the most seats in the Lower Chamber.
The left-wing Party of the Democratic Revolution (PRD) came a distant third place.
In Congress, the PRI won 36.8% of the vote to 27.9% taken by President Calderón's National Action Party (PAN). The PRD came in a distant third place with 12.2%. The PRI captured 237 seats in the Lower Chamber (including the additional seats won by the principle of proportional representation), followed by the National Action Party (PAN) with 143 seats and the PRD only obtained 72 seats. Within the smaller parties, the Partido Verde (PVEM) obtained the most votes with 6.7%, followed by the Partido del Trabajo (PT) and the Nueva Alianza party (PANAL) with 3.6% and 3.4% respectvely. Convergencia Democratica, another party associated with the PRD, performed poorly (2.4%), but it was able to preserve its registration. However the Partido Social Democratica (PSD) lost its registration with only 1.03% of the national vote. Under the new electoral legislation, a party needs to capture at least 2.0% of national votes to guarantee its place in the political system.
Calderón's predecessor as President, Vicente Fox, was the first non-PRI President for 71 years. He governed from 2000-2006, heading up a PAN administration.
President Calderón has clearly set out 3 main priorities for his administration:
- creating jobs (with 1 million new jobs needed each year to meet demand)
- reducing poverty (with around 47% of Mexicans currently living in poverty)
- improving public security (including reforming the judicial system and reclaiming public spaces from the drugs cartels.)
Legislation passed since President Calderón came to power includes: the Pension System Reform (the ISSSTE Law) approved in March 2007: the 2008 Tax Reform Bill, approved in September 2007, and the Electoral Bill Reform approved in September 2007 and enacted in November of that year; and the 2008 Federal Expenditure Budget and the Law of Income, approved by the Congress in November 2007. The justice reform package was formally approved in February 2008 and in April 2008 the energy reform package was presented to Congress and aaproved in October of that year.The approved energy reform is a package of amendments to seven laws, many of which focus on changes to the machinery of government. The management of Mexico’s national petroleum company, Pemex, will be enhanced by the creation of a National Hydrocarbons Commission, a Committee of Acquisitions, and a Committee of Long-term Strategic Investments. The reform grants Pemex greater autonomy over its finances and governance.
Human Rights
Mexico has ratified the following international human rights treaties:
- International Covenant on Economic, Social and Cultural Rights
- International Covenant on Civil and Political Rights
- International Convention on the Elimination of all forms of Racial Discrimination
- Convention on the Rights of the Child
- Convention on the Elimination of all forms of Discrimination Against Women
- Convention against Torture or other Cruel, Inhuman or Degrading Treatment or Punishment.
- Convention on Rights of persons with disabilities
- Convention for the Protection of All Persons from Enforced Disappearance
- International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families
Mexico is also a Party to the American Convention on Human Rights and has accepted the jurisdiction of the Inter-American Court of Human Rights based in San José, Costa Rica.
Mexico, with other members of the Human Rights Council, participates in the Universal Periodic Review. This took place in February 2009. Mexico accepted a large number of recommendations as a product of this review process.
Past Human Rights Abuses
The human rights picture in Mexico is improving slowly. Of continuing concern are the levels of police violence and impunity, very poor and overcrowded prison conditions, violence towards indigenous communities (particularly in Chiapas and Oaxaca) and the treatment of street children. Since taking office, the fight against the drugs cartels has been a high priority for the Calderón administration. The death toll from these operations is high and there have been accusations that the army has been responsible for human rights abuses in carrying out this task.
