Geography & Statistics

Capital: Mexico City
National Anthem: “Mexicanos, al grito de Guerra” (“Mexicans, to the Cry of War”)
Monetary unit: Mexican Peso
Area: 756,184 sq. miles.
Estimated Population: 91,261,000
Official Language: Spanish
Major Exports: Petroleum and petroleum products, vehicles, engines, cotton, machinery, coffee, fish, fertilizers, and minerals.

Mexico is located south of the United States in North America. It has three main mountain ranges that border the country from the vast oceans on each side. There is the Sierra Madre Occidental in the west, and then there is the Sierra Madre Oriental in the east, and lastly Sierra Madre del Sur in the south. The central Mexican region is fertile flat land, which is fueled by a few rivers that go across the country. The average temperature in Mexico is around 77°F to 81°F.

The Mexican economy is dependent on commerce and industry to generate considerable amounts of money. In terms of industry, petroleum products are mined and processed, then shipped to other countries. Due to the lowering of oil prices in the early 1980s, the country is in extreme debt. In the late 1980s, it signed to delay the payments of its debts more due to a lack of money to pay the debt. There was also a high amount of inflation, which the country gradually reduced after 1988. They also signed the North American Free Trade Agreement (NAFTA), which breaks “trade barriers” between United States, Mexico, and Canada for 15 years. This could provide Mexico the opportunity to decrease its debt.

History of the Nation

The area known today as Mexico was the home to many of the first civilizations in the Western Hemisphere, including the Maya, Toltecs, and the Aztec empire. These civilizations did not trade extensively; instead, they acquired what they wanted through the conquest of surrounding peoples. The tables were turned when the Spanish came to Central America searching for gold and other riches. The Spaniards, quickly subduing the native cultures, established colonies and began shipping trade goods to Spain, mainly gold, silver, sugar, and agricultural products introduced from Europe. Also, the colonies in Mexico imported slaves from Africa to work in the silver mines, the most lucrative product from that area, sending silver all around the world, from Europe to Africa to Asia. In the late 1700’s, Spain went through an economic recession, and developed new legislation that opened wide the doors of trade between the colonies in the New World.

However, with the new legislation came heavy taxes, which lead to a number of rebellions—in Mexico and all over the rest of Spain’s colonies—wreaking havoc on the Mexican economy and disrupting trade all over the New World. The Texas rebellion in 1835 lead to the loss of Mexico’s Texas territories, and a cutoff of trade to that area, and bad relations with the U.S. One decade later, the war with the U.S. lead to Mexico’s loss of her California and surrounding territories to the U.S. and breaking trade ties with the Americans. More Revolutions and power swings occurred in the next decades leading up to the 1900’s, culminating in the Constitution of 1917 that finally brought about land reforms, and provided needed stability to the chaotic Mexican nation. Although the Germans attempted to enlist the aid of the Mexicans to invade the U.S. in WWII, Mexico never played a role in either of the two World Wars because the country was too busy rebuilding.

Mexico traded in oil prior to WWII, but the war cut short her trade to the European nations, hindering Mexico’s industrialization which had been slow up to this point. In the 1960’s and 70’s, uncontrolled population growth strained the Mexican economy, and legislative efforts were made to loosen economic and cultural ties with the U.S. However, the U.S. increased economic bonds to Mexico by agreeing to buy Mexican oil at a higher price than could be had on the world market, making the oil trade Mexico’s most lucrative export in the 70’s and 80’s. Around this time period, a different type of trade, the drug trade, began to take off in Mexico, and despite government efforts by both the U.S. and Mexico, drugs flowed into America from Mexico in increasing numbers. Mexico today is semi-industrialized, and has several industrial resources such as petroleum and metals that provide Mexico with trading opportunities with other industrialized nations. By joining NAFTA in 1992, Mexico opened doors with the U.S. and Canada, becoming one of America’s biggest trading partners. Mexico also trades extensively with other Latin American countries, Germany, Japan, China, South Korea, and Taiwan, exporting raw or processed industrial materials, and limiting imports, so as to increasingly grow their economy.

Politics

Mexico is basically a federal republic—that is, it’s made up of 31 states of which send representatives to a national “congress.” In many ways, its governmental system mirrors the United States’. It has a bicameral congress with a Supreme Court and executive branch. The economic divide in Mexico is huge—partially to do the majority of the distribution of wealth held to the private sector (non-government associated companies). Unlike the other nations nearby (the US and Canada), the living standards in Mexico is lower. 

Recent administrations and different presidents of Mexico have highly improved the Mexican economy. Back in 1994, there was a move to pass the NAFTA agreement in Mexico (the North American Free Trade Agreement). Since then, reports from a 2002 survey and census report have shown that Mexico has increased trade with the United States and Canada three-fold. Besides Canada and the US, Mexico has also drastically changed its trading policy: Now, more than 90% of the trade agreements Mexico has made with other countries (i.e. Guatemala, Honduras, etc) have been free-trade agreements.

Because of the recent trade activity (namely good things), there has also been some direct investment in capital into the Mexican economy. In 2001 alone, this total reached about $25 billion (although $12.5 billion was contribution by Citibank which bought out a Mexican bank). The biggest problems that Mexico is having, nonetheless, has arisen from the previous good things that have been happening (trade with US and Canada and capital investment). Because it is mostly US and Canadian influence driving the Mexican economy, Mexico finds itself in trouble when the US has a market slow-down.

One of the major sources of economic activity for Mexico is as a source of labor. Again, slow-downs in US economic activity mean less people are buying goods, which means that less goods need to be produced, which means the Mexican economy starts to slow down because it’s mostly made up of laborers (close to 70% according to a US survey). 

Most of the political pressure arising in Mexico is from the United States. Illegal immigrants constitute much of this problem, as the US must expend lots of effort to protect their borders against such problems. The other big problem (somewhat associated with illegal immigrants) is the smuggling of drugs across the US-Mexico border.

The Future and Beyond

Mexico, one of the world's most trade dependant countries, is closely tied to the United States for their success; approximately 88% of the Mexican exports are bought by the US. Due to open free trade agreements such as NAFTA, Mexico has also been able to establish economic ties to Canada, the European Union, Guatemala, Honduras and El Salvador. As Mexico chiefly exports automobiles, petroleum and electronic equipment, they will continue to provide their neighbors and partners with more services, opposed to agricultural products. 

Based on the institutionalist perspective of the future of Mexico's economy, theorists such as C. E. Ayres suggest that the level of development of a country is directly proportional to the strength and progress of technology. In order to do so, they theorize that certain ceremonial/cultural practices and ineffective institutions in the society and economy are hindering economic progress. Examples such as land controlled by the few and powerful, a weak educational system and lacking democratic institutions facilitate this idea. Despite Mexico's current state of unequal incomes, they continue to strive for technological advancement in terms of infrastructure (railroads, telecommunications, airports, etc.) and agricultural methods. Overall, so long as the US and their partners prosper, Mexico will prosper as well, but they must also make the effort to modernize their methods to follow the demands of their neighboring markets.

Did you know?

The current president of Mexico is Vincente Fox

60% of Mexico's population is mestizo (Spanish-Indian)

About 89% of Mexico is Roman Catholic

Prior to the election of Fox, the PRI party had held power for 71 years

Over one hundred million people live in Mexico

The literacy rate in Mexico is estimated to be 89.6%