Unanswered question: What impact is the continued recession and increasing wealth gap in the US having on Mexico? What is happening now in Mexico’s economy?
From the Global Competitiveness Report highlights for 2011-12 (which I’ve got some issues with btw but can delve into that later):
Mexico improved (eight spots) in the rankings over the past year, and is now 58th. Only Brazil and Chile (of latin american countries) rank higher. The World Economic Forum saw improvements in reducing regulatory hurdles to starting a business. Mexico has a large internal market (it’s ranked 12th here), and a good transportation infrastructure (47th). But public institutions, security, and the higher educational system are weaknesses.
Note: The ESLAC 2010 p 178 says that exports account for 35% of Mexico’s GDP, and as a result the global recession of 2009 hit particularly hard). also, remittances from the US dropped significantly in 2009, and again in 2010 due to high unemployment rates in the US.
Key indicators, 2010
GDP (US$ billions)…………………………………………1,039.1
GDP per capita (US$) ………………………………………9,566
GDP (PPP) as share (%) of world total………………2.09
Mexico is considered to be in transition from an efficiency-driven to an innovation driven economy. Crime, corruption, and inefficiency are the leading barriers to doing business there. (2011-12 full report, p 258)
Economic Survey of Latin America and the Caribbean 2009-2010 – Mexico
“The international financial crisis took a serious toll
on the Mexican economy and highlighted its structural
shortcomings, close ties with the United States economy
(especially the heavy concentration of exports in that
market), a low tax burden as a proportion of GDP and
dependence on oil revenue, as well as the limited ability
of the development banking system to boost economic
activity and employment.” p 173
Economic activity declined by about 6.5% in 2009 (p175).
The unemployment rate was 5.1% in May 2010.
Come back to later: Attitudes toward Democracy: Mexico in Comparative Perspective.
by Alejandro Moreno
On the World Values survey cultural map, 2005–08, Mexico is clustered with other Latin American countries, furthest to the right on the self-expression value axis (almost the same as Belgium and Luxembourg!), but low on the traditional / rational values axis (tending towards traditional values). Brazil, Chile, Uruguay, and Argentina are all higher on this axis, towards more secular/rational values.
Mexico Oil / Energy sector
The oil industry was nationalized in 1938. Pemex is the state-run oil company.
In 2009 oil revenue to the public sector declined 21.4%. This was due to problems with Pemex in declining production, low reserves, and legal restrictions which limit investment in the industry, including in exploration. Mexico passed legislation in 2008 designed to overhaul the industry and give Pemex greater autonomy, including to attract foreign investment through licensing production and service contracts to foreign companys. In March 2011 Pemex announced its first production licensing round of bids in more than 70 years.
The Cantarell oil field has been the major producer of oil in Mexico but production is declining rapidly.
From the US Energy Information Administration:
- Mexico is one of the top three sources of U.S. oil imports.
- Mexico’s natural gas consumption is rising primarily due to greater use of the fuel in power generation.
- Most of Mexico’s electricity generation comes from conventional thermal sources, chiefly natural gas.
The oil sector accounted for 14% of the country’s export value in 2010. Oil industry earnings account for 32% of the government’s revenue(!)