International Business: SPOTLIGHT ON MEXICO : The Mexican Economy

With its most open presidential election in 65 years just completed, Mexicans are again focusing on economic development and attempting to build on the economic achievements of outgoing President Carlos Salinas de Gortari. The North American Free Trade Agreement thus far has mainly increased U.S. exports to Mexico, but the country still needs further industrial development, in part, to slow migration to the United States.

Maquiladoras

In cities along the U.S.-Mexico border and elsewhere, foreign manufacturers have built plants that produce parts or assemble goods for shipment back to the foreign company under special trade rules. About half a million Mexicans are employed in such plants, which attracted 70% of the foreign investment in the nation in the last 10 years.

Tourism

Mexico’s lovely coastlines help a large tourism industry attract more than 7 million visitors a year, mainly from the United States. About $3.4 billion was earned in tourism during 1990.

Agriculture

Although Mexico has developed dramatically in recent decades, it remains strongly agrarian. According to the 1990 census, 22% of the labor force was employed producing food, a sector that makes up about 8% of GNP.

Industry

The industrial heart of the country is Mexico City, which accounts for about half the national manufacturing activity and 45% of that sector’s employment. Guadalajara and Monterrey are also major centers.

Oil

The country is the world’s fourth largest oil exporter of crude oil, with proven reserves of more than 45 billion barrels, primarily in the southeast and in the Gulf of Mexico. In 1992, oil production averaged 2.67 million barrels a day, about half exported.

Sources: Bank of America, World Information Services, Europa Publications, Price Waterhouse