Mexico
Economic and Political Situation in Mexico
In recent years, the economic and political situation in Mexico has fallen under international scrutiny, and as a result, critics have analyzed the country's policies toward exchange rates, foreign trade, domestic monetary systems and foreign policy. Mexico currently operates under a free market economy that 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, and airports (CIA, 2005). Trade with the United States and Canada has increased in the past decade, however, Mexico has many transnational problems that other countries do not face, such as those involving enormous population growth, outmoded infrastructure, prolonged drought, and the illicit cultivation and distribution of narcotics. All of these issues have been greatly affected by the past and current economic and political situation in Mexico. This paper will take a detailed look at Mexico, applying international principles in perspective.
Mexico's Political and Economic Situation
Mexico's economic situation is most widely discussed in the context of the devaluation of the peso in 1994. This event led to the worst economic recession in the country in over half a century, which has been blamed on Mexican economic authorities. After concluding that the peso was overvalued, economists predicted that if the peso value remained uncorrected, international reserves held at the Bank of Mexico could be attacked. These economists argued that a solution for this speculative attack could be a negotiated devaluation between labor and business leaders. According to these economists, if business and labor were convinced to increase prices with moderation following the devaluation, the inflationary pressures would be kept in check (Lustig, 1995). Eventually, the markets did not believe that the peso parity was sustainable, and reserves fell until the government had no choice but to devalue (Lustig, 1995). Unfortunately, the exchange rate policy was modified after the reserves had fallen too low, and the government lost control.
Despite attempts to recover from the devaluation of the peso, Mexico's attributable ongoing economic and social concerns include low real wages, underemployment for a large sector of the population, inequitable income distribution, and few advancement opportunities for a large segment of the population in the impoverished southern states (CIA, 2005). However, from an international perspective, the devaluation of the peso has drastic effects. The devaluation resulted in financial crisis with significant spillover effects on other countries, in particular, Latin America (Lustig, 1995). As a result, the flight of capital from Mexico and other emerging markets in Latin America and other countries took governments and international financial institutions by surprise (Lustig, 1995). The risk that Mexico took in its' economic strategy had widespread and lasting effects, both on a domestic and an international level, some which are still being currently felt.
After this financial crisis, the Mexican government was challenged by its citizens and foreign countries to restore its credibility. For this it was necessary to put into place a program with realistic goals, and to specify clear monetary, fiscal and exchange rate policies (Lustig, 1995). The Mexican market appeared to improve, and the fact that United States interest rates did not rise also assisted in Mexico's turnaround. In 1999, the Mexican economy grew 3.6%, and both domestic and international demand for goods and services increased. During the first 11 months of 1999, the total number of workers registered by the Mexican Social Security Institute increased by more than 870,000, and the open unemployment rate fell to its lowest level since 1985 (Gurria, 2000).
Under former Mexican president Ernesto Zedillo, macroeconomic stability and domestic savings increased. Zedillo's public debt-management policy continued to be consistent with the strengthening of the economy, and market amortizations of the public sector's external debt for the last quarter of 1999 and the year 2000 as a whole amount to $2.3 billion (Gurria, 2000). After the financial crisis caused by the devaluation of the peso, inflation had been reduced. For example, the consumer price index increased 12.32% in 1999, below the 13% target established at the beginning of the year. From an international perspective, non-oil exports grew 15.0% in 1999, and the trade...
Economic System of Mexico Mexico, which is officially United Mexican States, is a country that is bordered by the United States, the Gulf of Mexico and the Caribbean Sea; Belize and Guatemala; and the Pacific Ocean (Concise Columbia, 2000). The country's capital is Mexico City and its other main cities include Guadalajara, and Monterrey. Mexico's landscape is predominantly mountainous. While lowlands lie in the southeast and along the coasts, the heart of the
(Birtle, p99-108) Finally, authorities in New York on the motion of a supposedly neutral society of pacifists had ordered the arrest of some pieces of machinery that the Mexican government moved to Mexico for the manufacture of munitions, which was not conceived that could be used but few months after bringing it to our country. (Pierce, p84-88) This act of the Yankee government, which tended to prevent the manufacture of
Mexican Political System Mexico has a unique and fascinating political life and a thriving democracy amid constant fears of powerful drug cartels and corrupt politics. It is a country with a rugged history, a rich culture, and an independent spirit separating it from other Central American and North American countries. Its relations with the United States, its biggest neighbor, have been difficult to say the least, ranging from war to friendship,
Economic Situation Looking at the economy from a macroeconomic viewpoint means looking at a more broad approach to individual economic factors, weighing those factors, and making a determination as to whether the economy is stable and improving for the populace. Sustainable growth is one of the goals of economic development, and while there are peaks and valleys, the overall level and growth filters down to many factors. A booming economy, for
For the first time in many years, nations like Japan can no longer guarantee employment for their large population and they must consider a new welfare option. These are all economic situations that are new and indicate that population has an adverse affect on the world economic policies. Conclusion This report aimed to discuss some of the relationships between population growth and economic development. Economic growth will continue to be an
Mexico: Terrorism and Organized Crime The convergence in numerous means of organized criminal activities that include terrorism and drug trafficking is a developing concern in the United States and the entire world. Some professionals in this filed imply that the increasing number of cases of terrorism and organized crime groups are jointly coordinated and the trend is increasingly developing into a worldwide phenomenon (Rollins 2). These occurrences pose a great and
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now