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| Mexico Stock market building |
| Mexico |
If compared to other countries in Latin America, Mexico can be said to have the highest living standard. That is why many people from Argentina, or Cuba come to live and find some job in Mexico. Mexico has experienced a significant economic growth recently and one part of the population forms the middle, upper middle and high class. Families with pretty high incomes live in single houses, in areas surrounded by walls, called "fraccionamiento". It is obvious that for the reasons of security those belonging to upper middle and high classes prefer to live in such neighborhoods. However, these walled villages provide other luxury infrastructure, having for instance swimming pools or golf clubs. Their houses are large, beautiful and of high quality. Just to illustrate, they have up to four bedrooms, maid rooms and laundry rooms. It could be said that it is a part of the Mexican mentality that every family tries to hire a housekeeper or maid, even though they do not belong to the high class. There are many families in the larger towns willing to pay a middle aged woman, called "muchacha", to help with the house. Enormous economic gap, however, exists between the urban and rural population, the northern and southern states, another words among the rich and the poor. The sad story of the country`s standard of living are the poor. Poor Mexicans have difficult conditions to organize their family lives, friends and the way of life in general. Poverty is particularly spread in the remote areas of the hinterland. The Mexican economy did not experience hyperinflation during the 20th century, as many countries in the region did. However, after the economic crisis that hit the country in 1994 half of the population, especially those in rural areas, fell into severe poverty. According to the World Bank, the undertaken political measures ten years later managed to reduce extreme poverty to 17,6 percent and moderated poverty to 21 percent. The CIA Fact-book however showed different figures. They said that 13,5 percent of the population lived under the poverty line, called food-based poverty.
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| Peso Mexicano from 1920 |
From the economic point of view, Mexico is in the 12th position in the world and, as such, is predicted to take place among the six largest world's economies within 40 years. The country has the highest income per capita among all Latin American countries. Mexican GDP in 2004 amounted to a trillion dollars (according to "purchasing power parity" criteria). Mexico is considered to be an advanced middle-income country, and is the member of the Organisation for Economic Co-operation and Development. Mexico`s market is free and oriented towards export. Inflation rates remain low, unemployment rates remain low, however, underemployment covers more than 25 percent of the population. Due to the huge gap in the standard of livingNAFTA is very important free trade agreement for Mexican economy, signed among the US, Mexico and Canada in 1992. The among Mexican classes, the economic policies and measures have to arrange the economic infrastructure, re-arrange tax system and the labor issue and they need to try to diminish the income gap in the country. Mostly run by private companies, the economic sector consists of both modern and old fashioned industry and agriculture. There are indicators that the infrastructure is improving regarding telecommunications, electricity, natural gas distribution and airports. Mexican trade is organized mostly under free trade agreements (FTA) with more than 40 countries throughout the world. Mexican currency is the Mexican peso and its symbol is $. One peso consists of 100 centavos (cents). The current code for the peso is MXN (Mexican peso). Due to the country`s export-oriented economy, the Mexican peso belongs to 15 most traded currencies in the world, and is definitely the most traded currency among Latin American countries. Since 1998, for one US dollar you will get between 9.20 and 11.50 MXN. (at the approximate ratio of 1:10)
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| Un centavo de 1890 |
Remittances or money sent by Mexicans mostly living in the United States, to their families back in Mexico, are a significant part of the Mexican economy. It is calculated that 18 billion US dollars was sent to Mexico in 2004, mostly by electronic transfer, wired. This "economic branch" (remittance) forms the second foreign income in the Mexican economy; the first one is the export of unrefined oil. The annual money sent by Mexicans, half oh them legaly working in the US. half illegaly, is bigger than the total annual turnover in tourism. The states of Michoacán, Guanajuato, Jalisco, Mexico and Puebla received the biggest amount of remittances in 2004, and some states even have introduced programs to encourage the remittances, part of which financed public works. The program is called "Dos por Uno" (Two for every one) and means that for each peso from remittances, the state and the federal governments will invest two pesos in building infrastructure in that special state.
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| Bricks of cocaine called Scorpio |
Mexico`s great economic gap caused criminal activities in the lower classes, which unfortunately include the majority of the population. Drug trafficking and organized crime are major criminal activities in Mexico. Mexican drug trafficking rings are inevitable in the flow of cocaine, heroin, and marijuana trade among Latin American countries and the United States. This drug trafficking shaped a high corruption level in the country. The United States market is the market for illegal drugs. It is estimated, for example, that almost 90 percent of cocaine sold in the US comes from Latin America. Of course, due to its geographic position, Mexico is very important element in the chain. It is the largest point of marijuana and the second largest point of heroin shipment to the US. The main quantity of methamphetamines on the US market is produced in Mexico. Mexican drug cartels are the ones that organize the trade of cocaine, heroin, and marijuana between Latin America and the US. Mexican-American gangs are hired to distribute these narcotics by the drug cartels. There are four main Mexican cartels: the Pacific cartel, the Juárez cartel, the Matamoros -based Gulf cartel, and the Sinaloa cartel. These cartels bought up almost all politicians, top anti-drug police inspectors and top police officials. As it is expected, many Mexicans believe that the highest politicians, such as president Carlos Salinas and his brother Raúl, were deeply involved in the drug business. Mexican drug cartels are connected to Colombian drug cartels, and some analysts worry that the "Colombianization" of Mexico might happen. Naturally, some drugs are produced in Mexico, such as opium poppy and marijuana in the western Sierra Madre Mountains. Many rich houses are used as laboratories which refine drugs. Marijuana, crack, cocaine and methamphetamine are the most popular and most sold illegal drugs in the urban areas of the country. Supposedly, the present government tries to clear up the corrupted anti-drug police and undertakes many measures in the anti-drug struggle. The fact that the drug mobs are powerful is supported by the death of Ramón Martín Huerta, the public-security minister. He was killed in 2005 in the airplane accident and nobody believed it was an accident.
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| The UNAM library |
It is said that six years after a major macroeconomic crisis, Mexico`s economy has the biggest grow in Latin America. Mexico, however, wants its future development to be based on knowledge and wants to implement its own intellectual and scientific forces and experts in the global knowledge of the world. Therefore, the country plans on developing further scientific and technological achievements not only with the US, but with the EU and Latin American and Caribbean countries as well. At the last meeting of the EU-Mexico Joint Committee, "Cooperation in Science & Technology" was called the 4th pillar for bilateral cooperation, designed as very important. Those aware of the country`s situation want to reduce its dependence on the US and to distribute the developing points across the world, through strategies based on knowledge, aiming primarily at the European Union. "The Mexican National Council for Science and Technology" (CONACYT) is a public institution that promotes science and technology development in Mexico. CONACYT finances scientific researches, keeps track of human resources and supports national and international universities as well as research centers.
Everybody knows that politics influence economy and vice versa. The southern Mexican states pass through different economic and political crisis. Many consider US imperialism negative and call the PRI and PAN politicians their puppets. Some blame them to have stopped "the aspirations of the Mexican working class and poor peasants who strive and struggle for a just and democratic México". This is an interesting quote from the Mexican newspapers: "... even as the PRI/PAN talks of the success of neo-liberalism and the economic prosperity México is “beginning to experience,” the people are organizing against an economic and social model that has in mind the making of more millionaires at the expense of the masses of Mexican people." It is obvious that a huge economic gap between the rich and the poor in the country, influences the mood towards their official policies and politicians.
