Political and financial background of Mexico

Subject: Political
Pages: 5
Word count: 1443
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Introduction

Lying between the Central America and the U.S, Mexico is a country popularly known for its Gulf as well as Pacific of Mexico beaches. Equally, it exemplifies a topography that has several mountains, jungles as well as deserts. It is the country’s Spanish colonial era towns as well as the modern shops, industries, museums and restaurants that serve as a means of livelihood for citizens in this country through among other economic activities, tourism (Shapiro-Garza, 2013). To, this end the paper seeks to understand the political as well as the financial background of Mexico as a country.

Mexico’s political and economic background

As far as the political history is concerned Mexico was under Spain for close to three centuries before early nineteen century when Mexico became independent of their colonial masters. In 1821, General Iturbide and Vincente Guerrero joined forces to liberate Mexico from Spain. A representative assembly drafted a constitution for Mexico even as Roman Catholic became the leading religious group at the time. In 1829 under the leadership of Vincente Guerrero, the Mexican government abolished slavery. In 1830 and 1832 two separate coups were organized and this saw Anastasio Bustamente and Manuel Gómez Pedraza become Mexican presidents respectively. In 1834 Santa Anna became the president throwing Mexico into a dictatorial regime pitching federalists against the centrists. The rebellion against Santa Anna gave rise to the Massacre of Goliad, the Battle of San Jacinto as well as the Battle of the Alamo. It is the war between America and Mexico that resulted in the signing of the Treaty of Guadalupe Hidalgo in 1948 setting up the southern border between U.S. and Mexico, and in 1855 Santa Anna relinquished power. Santa Anna’s resignation marked the beginning of major reforms in Mexico between 1855 and 1861, which included abolishing of special privileges for the military, enactment of a new constitution, as well as the church and restricting the church from holding property. Since then, the Presidential mantle has been exchanging hands up to the incumbent office bearer President Pena Nieto (Castro-Rea, 2005).

Mexicans speak Spanish as the official language with close to 95% population communicating in Spanish. The 2000 population census estimated the Mexican population to be roughly 97,361,711, with life expectancy expected to be at seventy-five years for women and sixty-nine years for men. Statistics places the infant mortality rate at approximate twenty-five per one thousand. The twentieth century was characterized with illegal migrations into the USA. The population still comprises of many Indians among other significant groups like the Mayas, Nahuas, Tzeltales, Zapotecas, Otomís, Mixtecos, and Tzotziles. According to a 2015 population survey, Mexico’s most populated cities include; Ciudad de Mexico (8, 918,653), Jalisco (7, 187, 608), Vera Cruz (8, 112, 505) as well as Mexico (16, 187, 608) (Haber, Maurer, & Razo, 2003).

Mexico does not just rank as the Latin America’s second largest economy, but also features among the top twenty, world’s largest economies. The economy, which is heavily dependent on the productivity of the U.S. economy, grew by almost 2.4% and 2.3% in 2014 and 2015 respectively; and according to the International Monetary Fund, the economy if expected to increase at the rate of 2.6% in 2016. The widening informal sector and the country’s rising poverty levels remains two major obstacles in the path to development.  As far as the currency stability is concerned, the Mexican Peso has since 2012 been declining against other world’s major currencies like the British Pound, the Chinese Yuan, as well as the U.S Dollar. One of the Major industries that dominate the Mexican economy include the automobile industry. In 2014 for instance, the car sector saw Mexico top the subcontinent as the largest car producer. On the other hand, growing significantly in 2014 and 2015, remittances by Mexicans living abroad especially those in the U.S., serves as the second largest source of the country’s foreign income. Despite the foreign direct investment taking a nose dive in 2014, it regained stability in 2015. In 2015, the declining global oil prices threatened Mexico’s economy a move that saw revenue from oil reduced by close to 38% from January to October the same year (Haber, Maurer, & Razo, 2003).

Also, the oil industry went through a decrease in production as well as a significant drop in exports, consequently raising Mexico’s trade deficit a notch higher. In 2014, Mexico launched economic reforms initiated in a bid to transform the economy, but this is yet to bear fruit. However, the tax changes have tremendously boosted state revenue, helped caution the falling oil prices, and at the same time increasing the Government’s budgetary deficit. To this end, the 2016 budget introduced EUR 5.35 billion worth of cuts. Politically, Mexico has found itself at the center of a political storm characterized by waves of violence. Never the less, President Pena Nieto in 2015, observed that violence in and around Mexico had markedly reduced, although most of the citizens firmly believe that the government has lost the war against corruption as well as drug trafficking. To this end President, Nieto reshuffled the government officials including the cabinet in a bid to win the trust of the citizens.  Mexico is a multi-party democracy, and with democratic pluralism, the political power has shifted directly from the executive to the local governments as well as the legislature. The country enjoys three legislative forces that include; the National Action Party, The Institutional Revolutionary Party as well as the Party of the Democratic Revolution (Haber, Maurer, & Razo, 2003).

In matters employment, the unemployment rate dropped to approximately 4.3% in 2015, with the informal sector employing a greater percentage of the workforce at 59%. Regarding exposure to natural hazards as well as unemployment rates, a lot of disparities and inequalities exist in Mexico, with close 46% of the population living in absolute poverty. Population wise, Mexico boasts of close to 122 million citizens, with a current GDP per capita standing at roughly $10,000. It is this GDP that places Mexico among the upper middle-income economies. Based on the purchasing power parity, Mexico’s GDP per capita is approximately 60% higher, this translates to $16,000. The purchasing power parity places Mexico at the same level with countries like Brazil, Turkey, and Romania, but much lower compared to countries like Switzerland and America at $58,000 and $55,000 respectively (Bargain & Kwenda, 2011).

The agricultural sector accounts for close to 3.5% of the county’s GDP and absorbs well over 13% of its active citizens in the workforce, with credit scarcity continuing to limit the industry. The thriving agriculture makes Mexico the world’s largest sugar, oranges, limes, coffee, avocados, sugar, as well as corn producer. Equally, Mexico ranks fifth as the world’s biggest beer producer making it the second largest exporter of the same product. As far as the mining is concerned, it is amongst the leading manufacturers of various minerals like mercury, zinc, silver as well as fluorite. On the same wavelength petroleum products like gas and oil reserves remain some of the country’s most treasured possessions. PEMEX, Mexico’s second most influential oil company in and around Latin America, is direct as a result of Mexico being the world’s fifth largest producer of oil. Similarly, fishing as well a livestock farming are also key players in the agricultural sector (Saldaña-Zorrilla, 2015).

Close to 25% of the total workforce is employed by the various industries; the industries accounts for over a third of the country’s GDP. Concerning transport, the aerospace sector has grown made significant strides, due to the existence of close to 190 companies such as the Safran group, Honeywell, Goodrich, as well as Bombardier. The companies employ close to 30,000 Mexicans cumulatively. The information, software as well as hi-tech sectors are gaining momentum in Mexico due to the availability of quality workforce as well as reduced operating costs. The service sector, on the other hand, accounts for roughly 60% of the country’s GDP and employs almost the same number of the workforce, due to the mortgage investment and the construction sector that has been improving since 2010. The three top competitors in the Mexican economy include the automobile sector, the oil industry as well as the agricultural sector (Story, 2014).

In conclusion, the Mexican history both politically as well as economically is not just intriguing but also fascinating. Politically, Mexico has made simple but significant steps from being a Spanish colony to what she is currently. Economically Mexico is competing well on the global market scale save for few problems of drug trafficking as well as corruption.

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  1. Bargain, O., & Kwenda, P. (2011). Earnings Structures, Informal Employment, And Self-Employment: New Evidence From Brazil, Mexico, And South Africa. Review of Income and Wealth, 57.
  2. Castro-Rea, J. (2005). Mexico’s Pivotal Democratic Election. Candidates, Voters, and the Presidential Campaign of 2000. Canadian Journal of Political Science, 38(3), 792.
  3. Haber, S. H., Maurer, N., & Razo, A. (2003). The politics of property rights: Political instability, credible commitments, and economic growth in Mexico, 1876-1929. Cambridge: Cambridge University Press. Print.
  4. Saldaña-Zorrilla, S. O. (2015). Natural disasters, foreign trade and agriculture in Mexico: Public policy for reducing economic vulnerability. Cham: Springer. Print.
  5. Story, D. (2014). Industry, the state, and public policy in mexico. Place of publication not identified: Univ Of Texas Press. Print.
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