Mexican Economy

Mexico - mĕkˈsĭkō, Span. México or Méjicoboth: māˈhēkō, officially United Mexican States, republic (1995 est. pop. 93,986,000), 753,665 sq mi (1,952,500 sq km), S North America. It borders on the United States in the north, on the Gulf of Mexico (including its arm, the Bay of Campeche) and the Caribbean Sea in the east, on Belize and Guatemala in the southeast, and on the Pacific Ocean in the south and west. Mexico is divided into 31 states and the Federal District, which includes most of the country's capital and largest city, Mexico City.

Land and People

Most of Mexico is highland or mountainous and less than 15% of the land is arable; about 25% of the country is forested. Most of the Yucatán peninsula and the Isthmus of Tehuantepec in the southeast is lowland, and there are low-lying strips of land along the Gulf of Mexico, the Pacific Ocean, and the Gulf of California (which separates the Baja, or Lower, California peninsula from the rest of the country).

The heart of Mexico is made up of the Mexican Plateau (c.700 mi/1,130 km long and c.4,000–8,000 ft/1,220–2,440 m high), which is broken by mountain ranges and segmented by deep rifts. The plateau is fringed by two mountain ranges, the Sierra Madre Oriental (in the east) and the Sierra Madre Occidental (in the west), which converge just south of the plateau. Within the plateau are drainage basins, which have no outlet to the sea and which contain some of the country's major cities. The Laguna District, one of the drainage basins, was (1936) the scene of a major experiment in land reapportionment. In the north the plateau is arid except for irrigated areas and is used principally for raising livestock.

In the south the deserts yield to the broad, shallow lakes of a region, comprising the Valley of Mexico, known as the Anáhuac and famous for its rich cultural heritage. South of the Anáhuac, which includes Mexico City, is a chain of extinct volcanoes, including Citlaltépetl, or Orizaba (18,700 ft/5,700 m, the highest point in Mexico), Popocatépetl, and Iztaccihuatl. To the south are jumbled masses of mountains and the Sierra Madre del Sur.

Among Mexico's few large rivers are the Rio Bravo del Norte, which forms the boundary with Texas, and its tributaries the Río Conchos and the Río Sabinas; the Río Yaqui, Río Fuerte, Río Mezquital, Río Grande de Santiago, and Río Balsas, which flow into the Pacific; and the Río Grijalva and Río Usumacinta, which flow into the Bay of Campeche. The climate of the country varies with the altitude, so that there are hot, temperate, and cool regions—tierra caliente (up to c.3,000 ft/1,220 m), tierra templada (c.3,000–c.6,000 ft/1,220–1,830 m), and tierra friá (above c.6,000 ft/1,830 m).

Mexico's 31 states are Aguascalientes, Baja California, Baja California Sur, Campeche, Chiapas, Chihuahua, Coahuila, Colima, Durango, Guanajuato, Guerrero, Hidalgo, Jalisco, Mexico, Michoacán, Morelos, Nayarit, Nuevo León, Oaxaca, Puebla, Querétaro de Arteaga, Quintana Roo, San Luis Potosí, Sinaloa, Sonora, Tabasco, Tamaulipas, Tlaxcala, Veracruz, Yucatán, and Zacatecas.

The great majority of the population are of mixed Spanish and indigenous descent and speak Spanish, the official language, as their first language. Various Mayan dialects are also spoken. Since 1920 the population of Mexico has had a very high rate of growth, almost entirely the result of natural increase; from 1940 to 1990 the population grew from 19.6 million to 81.1 million. However, declining fertility rates (from 7 children per woman in 1965 to slightly under 3 in 1998) are slowing down the population growth. Nearly 90% of the people are Roman Catholic and 6% are Protestant. The country has numerous universities, notably in Mexico City, Saltillo, Guadalajara, Monterrey, and Puebla. Since precolonial times Mexican architects, painters, writers, and musicians have produced a rich cultural heritage. See articles on Spanish colonial art and architecture, Mexican art and architecture, and Spanish American literature.

Economy

From the mid-1940s through the 1970s, Mexico generally enjoyed considerable economic growth, especially in industry. However, in the 1980s the economy, heavily dependent on sales of petroleum, incurred large international debts as petroleum prices fell. In the early 1990s, debt relief, diversification and privatization of the economy, and foreign investment showed positive effects, and the growth rate returned to historic levels. But a new crisis arose with the collapse of the peso in the mid-1990s, forcing the adoption of harsh austerity measures. A strong export sector helped the country to recover in the late 1990s, but the economy again went into recession in 2001, in large part because of the economic downturn in the United States. The Mexican government plays a major role in planning the economy and owns and operates some basic industries (including petroleum). However, the number of state-owned enterprises fell from more than 1,000 in 1982 to fewer than 200 in 1998.

About 25% of the country's workers (including those largely outside the money economy) are engaged in farming, which is slowly becoming modernized. Because rainfall is inadequate outside the coastal regions, agriculture depends largely on extensive irrigation. Mexico produces a wide variety of agricultural products, including basic grains, sugarcane, citrus fruits, cotton, coffee, and tomatoes. Maguey (see amaryllis) is widely grown and is processed into the alcoholic beverages pulque and mescal. Livestock raising and fishing are also significant economic activities.

Mexico is among the world's leading producers of many minerals, including silver, fluorite, zinc, and mercury, and its petroleum reserves are one of its most valuable assets. In the late 1970s and early 1980s, petroleum constituted about three quarters of Mexico's exports. That figure fell drastically in the mid-1980s. While the petroleum industry has recovered substantially, diversification of industry is helping to keep Mexico's trade economy from becoming dependent once more on a single export.

Next to oil, the most important source of exports are the industrial assembly plants ( maquiladoras) that dot Mexico's border towns. Since the early 1980s there has been considerable foreign investment in the maquiladoras, which take advantage of a large, low-cost labor force to produce finished goods for export to the United States. These plants have increased Mexico's export production considerably. The economic importance of the maquiladoras, however, is exceeded by tourism. Favorite tourist centers include Acapulco, Cancún, Cozumel, Puerto Vallarta, Mazatlán, Cabo San Lucas, and Tijuana, as well as Mexico City itself and such highland centers as Guadalajara and Puebla. Remittances from Mexicans working, both legally and illegally, in the United States are also extremely important to the economy.

The principal industrial centers in Mexico are Mexico City, Guadalajara, Monterrey, Juárez, Tijuana, Veracruz, Durango, León, Querétaro, Tampico, Mérida, and Puebla.

Leading manufactures include food and beverages, tobacco, chemicals, iron and steel, refined petroleum and petrochemicals, textiles and clothing, motor vehicles, cement, and electronic products. The country is also known for its handicrafts, especially pottery, woven goods, and silverwork. Mexico's chief ports are Veracruz, Tampico, Coatzacoalcos, Mazatlán, and Ensenada.

The leading imports are machinery, steel, electrical and electronic equipment, chemicals, motor vehicle parts for assembly and repair, aircraft, manufactured consumer goods, and grain; the main exports are crude oil, petroleum products, coffee, sugar, cotton, tomatoes, shrimp, engines, motor vehicles, consumer electronics, silver, sulfur, and zinc. Until recently, the annual value of Mexico's imports was considerably higher than the value of its exports. The principal trade partners are the United States, the European Union nations, Japan, and Canada. Mexico is a member of the United Nations, the Organization of American States, the North American Free Trade Agreement, the Latin American Integration Association, and the Latin American Economic System.

Government

Under the constitution of 1917 as amended, Mexico is a federal republic whose chief executive and head of state is the president, directly elected to a nonrenewable six-year term and assisted by a cabinet. The bicameral legislature is made up of the Senate, comprising 128 members serving six-year terms, and the Chamber of Deputies, consisting of 500 members serving three-year terms. Half of the senators and 300 of the deputies are directly elected, while the other half of the senators and 200 of the deputies are chosen by a system of proportional representation.

History

To the Early Nineteenth Century

A number of great civilizations flourished in Mexico long before the arrival of Spanish conquistadores in the early 16th cent. The Olmec civilization was the earliest of these, reaching its high point between 800 and 400 b.c. The Maya civilization flourished between about a.d. 300 and 900, followed by the Toltec (900–1200) and the Aztec (1200–1519). Other notable civilizations of pre-Columbian Mexico are the Mixtec and the Zapotec.

The first Europeans to visit Mexico were Francisco Fernández de Córdoba in 1517 and Juan de Grijalva in 1518. The conquest was begun from Cuba in 1519 by Hernán Cortés, who with lieutenants such as Pedro de Alvarado managed to conquer the Aztec capital, Tenochtitlán; to capture Montezuma, the Aztec ruler, and to bring down his empire;