Economy of Mexico

Economy of Mexico

According to businesscarriers, modern Mexico is one of the largest and most developed countries in Latin America. In 2002, its GDP amounted to 637.3 billion US dollars, and per capita – 6.2 thousand US dollars. According to the first indicator, Mexico ranks 2nd in the Latin American region after Brazil, and according to the second, it has been ahead of this country since 1999. In terms of production, Mexico ranks 9th in the world. The economically active population is 40 million people, total unemployment is 3.2 million people, partial unemployment is 4 million people. (2000). Inflation dropped from 16.6% to 5.7% in 1998-2002. In agriculture, whose share in 2002 was 5.1% of GDP, 20% of the economically active population is employed, in industry and construction (25.3% of GDP) – 24%, in the service sector (69.6% of GDP) – 56%.

Until 1980s the leading role in the economy was played by large state and private national enterprises. As a result of neo-liberal structural changes, the number of state-owned enterprises decreased from 1155 in 1982 to 80 in 2000. Over the years, banks, basic petrochemicals, electricity, satellite communications, as well as telecommunications, seaports and airports, transportation and supply of natural gas, iron roads, etc. At the same time, a significant part of the privatized enterprises ended up in the hands of foreign investors. By the end of the century, oil production, the development of radioactive minerals and nuclear power remained among the strategic sectors of the state.

The manufacturing industry is characterized by the highest growth rates: in 2001 144.1% compared to 1993 (100%); 17.2% of GDP in 2002, and in general for the industrial sector of the economy 73.5% (2002). The number of manufacturing enterprises increased from 1220 (1980) to 3095 in 1990 and 5697 in 2001. In 2002, 7.13 million people were employed in this industry. (17.6% of the economically active population).

A significant role in the manufacturing industry and in the economic life of Mexico as a whole is played by export-oriented assembly enterprises – maquiladoras, which work almost entirely (96%) on imported components. The number of these enterprises over the past 3 decades has increased from 454 (1975) to 3684 (2001), and the number of workers employed in them – from 67 thousand to 1 million people, respectively. In 2001, they accounted for 56% of the products of the metalworking and engineering industries, which play a leading role in the structure of the manufacturing industry as a whole (559.2 billion pesos out of 1544.2 billion pesos in the industry as a whole in 2001). The automotive industry accounts for 18.2% (2000), the number of employees is 511 thousand people, of which 237 thousand are in maquiladoras (2000) (see also Table 1). The main role in the automotive industry is played by TNCs – Nissan Mexicana, Volkswagen de Mexico,

The second largest manufacturing industry is the food industry (production of food, beverages and tobacco products) – 383.8 billion pesos, or 25% in 2001. The third is the synthetic industry (production of chemicals, petroleum products, rubber and plastic products) – 273.1 billion pesos. The textile industry in the national manufacturing sector is relatively underdeveloped. However, in the transnational – in the structure of maquiladoras production – it owns 15.8% of the cost of manufactured products (2nd place after mechanical engineering and metalworking).

The share of construction in the industrial sector of the Mexican economy is 15% and 4% in GDP (2002). Half of the sector’s production is in the hands of state-owned enterprises, and half is in the hands of private companies. In general, the sector employs 2.5 million people. (2002). 40.3% of the real value of manufactured products is for the construction of buildings and 26.8% for construction in the transport sector (2001).

Mexico ranks 7th in the world in gold mining (1% of world production in 2001) and 1st in silver mining (16.1%); 3rd in arsenic production (6.9%); 6th in lead mining (5%); 6th in zinc mining (5%); 2nd in bismuth production (22.4%); 3rd in cadmium mining (7.6%), 6th in molybdenum mining (4.2%), 2nd in fluorite mining (13.7%). In terms of crude oil reserves, Mexico ranks 9th in the world (2002), and 22nd in terms of natural gas reserves. In terms of crude oil production, Mexico ranks 7th (3127 thousand barrels per day, 2001), and natural gas – 10th. The leading company Pemex is the third largest crude oil producer among the world leaders, with a production volume of 3,450 thousand barrels. per day (including liquid gas, 2000); in terms of natural gas production, Pemex is in 7th place in the world.

The energy sector employs 260.5 thousand people. (3.2% of the industrial sector as a whole, 2001). The share of the energy sector in the industry of Mexico is 7.5%. The leading primary energy source is crude oil (70% of total primary energy production, 2001), followed by gas (18%), water (3%), timber (2.62%) and coal (2.45%). The structure of Mexico’s secondary energy is dominated by oil products (59.5%), gas (21.3%) and electricity (14.5%).

In the production of electricity within the public sector, 1/3 of the primary energy sources are water resources, 2/3 are heat sources. 30% of Mexico’s electricity production is in the hands of multinational corporations. 15% of electricity production in the private sector belongs to Iberdrola Corporation, 13% – Mitsubishi, 10% – the Spanish Union Fenosa.

Despite the constant decline in the share of the agricultural sector in the formation of GDP (3.7% in 2002 against 9% in 1986), agriculture remains an important sector of the Mexican economy: in 2000 it employed 8.7 million people, or 21.5% economically active population, in 2002 agricultural exports amounted to 3.8 billion US dollars. Of the 196 million hectares of the national territory of Mexico, 32 million hectares (16%) are suitable for agriculture, of which 24 million are cultivated. In terms of irrigated area (6.5 million hectares), Mexico ranks 1st in Latin America and 5th in the world.

Mexico was the first in Latin America to begin the implementation of agrarian reform, the legal basis of which was Art. 27 of the Constitution of 1917. During the years of reform, approx. 90 million hectares, land was received by 3.2 million households. To the beginning 1980s OK. 30% of the total number of households were private, 64% were echidal (communal) and 6% were mixed.

Mexico’s transition to a neoliberal development model forced a reconsideration of agrarian policy. The privatization of ejidos and the free exit of their members are allowed, with the possibility of creating associations with landowners of other types (private or state). The leading role in agricultural production is occupied by agriculture, which accounts for St. 1/2 of the entire cost of the industry product.

In 2000, the number of cattle amounted to 30.3 million, incl. slaughter 6.6 million, dairy 6.8 million. The number of pigs – 13.7 million, poultry – 476 million heads. It was produced (in million tons): meat (total) 4.3, incl. beef 1.4, pork 1.0, poultry meat 1.9; milk 9.5.

Mexico’s dependence on food imports is growing. In 2000, it provided 77% of the consumption of oilseeds, 48.3% of vegetable oils, 36.3% of cereals, 20.6% of meat, and 13.9% of root crops. Export orientation is maintained by vegetable growing, fruit growing and spice production. In 2001, the total production of wood amounted to 8.1 million m3 (pines – 6.6 million), of which 33% was for industrial purposes.

In the seas washing Mexico, there are approx. 100 varieties of fish and shellfish, of which shrimp, oysters, sardines and tuna are the most important. The main fishing areas are the shoals of the Mexican (75% of the catch) and the Gulf of California. In 2000, the total catch of fish products amounted to 1250 thousand tons. In recent decades, the development of aquaculture has become increasingly important, with an emphasis (80%) on the production of shrimp, the export of which in 2000 amounted to 61 thousand tons, with ser. 1990s annual aquaculture production exceeds US$1 billion.

The length of the railways is 26.7 thousand km, in 2002 66 million passengers were transported, the freight turnover was 47.8 billion tkm. The length of roads is 341 thousand km, of which 111.4 thousand are paved. There are 108 sea and river ports, the largest of which are: Acapulco, Altamira, Veracruz, Lazaro Cardenas, Manzanillo, Mazatlan, Tampico. The length of navigable sections of rivers and canals is 2.9 thousand km. The marine fleet consists of 44 ships with a displacement of 1,000 tons or more with a total carrying capacity of 987,000 tons. In 2002, 248 million tons of cargo was transported. There are 1852 airfields and landing sites, of which 231 are paved, including 57 international airports (34.1 million passengers and 352 thousand tons of cargo in 2002). The length of oil pipelines is 28.2 thousand km, gas pipelines – 13.3 thousand km, product pipelines 10.2 thousand km, The state oil company Pemex is implementing a program for 2001-06 to build 7,900 km of new pipelines. The monopoly in the field of wired telephone communication is the Telmex company, privatized in several stages in 1990-94, since 1997 the admission of independent operators began, the number of stationary devices at stake. 2002 amounted to 15 million, the number of mobile phones for 1990-2002 increased from 63.9 thousand to 25.8 million.

For a long time, the largest tourist center in Mexico was Acapulco on the Pacific coast, from the beginning. 1970s they became Cancun on the Caribbean coast. The number of hotel rooms in 2002 reached 482.1 thousand. The number of tourists for 1993-2002 increased from 83 to 100.2 million, of which 80.5 million were US citizens visiting the border zones of Mexico on short visits. Tourism revenue increased from $4.6 billion to $6.7 billion over the same period.

The Bank of Mexico (central bank) has received autonomy from the executive branch since 1993, its ability to lend to the government is limited to 1.5% of current budget expenditures. The Bank of Mexico is solely responsible for the country’s monetary policy, sharing responsibility for monetary policy and government credit policy with the Ministry of Finance.

The basis of the Mexican credit system is made up of diversified banks, the total number of which is at stake. 2002 amounted to 33. Their total capital was 18 billion US dollars, assets – 161 billion, liabilities – 143 billion, the volume of loans – 95 billion. There are also 7 state development banks and 163 credit unions. After liberalization in ser. 1990s access of foreign capital to the banking sector under his control turned out to be approx. 90% of the assets were acquired by foreign investors in 2000-2002 by the 4 largest banks in the country.

The stock exchange was established in 1886. At the end. In 2002, 169 companies were listed, with a market capitalization of $286.3 billion. Foreign investors owned 44.6 billion shares of Mexican companies, up from a high of 66.7 billion registered in 1999. In the 1990s. sharply intensified the activity of institutional investors, among which stand out AFORES – private companies for the management of pension funds, created in accordance with the pension reform of 1997, whose resources exceeded the beginning. 2003 US$30 billion. There are 362 investment funds and 54 insurance companies (2002). In the hands of institutional investors St. 60% of all government bonds in circulation, incl. AFORES – 34%.

State budget revenues in 2002 amounted to 22.5% of GDP, expenditures – 23.7%. With a stable primary surplus of 1.5–2.5% of GDP, the overall fiscal balance has been reduced to a small deficit in the last decade, increasing from 0.3% of GDP in 1994 to 1.2% in 2002. Federal government tax revenues in 2002 were 11% of GDP, the basis was income taxes (43.8%) and VAT (29.9%). The activities of state-owned companies provided 28.9% of budget revenues, or 6.5% of GDP. The share of capital expenditures in expenditures tends to decrease: to 13.5%, or 3.2% of GDP in 2002. The ratio of public debt to GDP, which reached its maximum value in 1986 (76.5%), in 2002 was 20.9%. The share of foreign investments in government obligations for 1993-2002 decreased from 21.9 to 1.6% of the total circulation.

Mexico’s foreign trade turnover is characterized by a passive balance. In 2002, exports amounted to 160.7 billion US dollars, imports – 168.7 billion US dollars. For a long time, commodities, among which oil is the leader, were the main export item. However, after the debt crisis of the 1980s, and structural transformations, the share of raw materials in merchandise exports decreased from 75% in 1980 to 22% in 1995 and to 16% in 2000, while the share of industrial goods increased over these years from 10.5% to 64% and 83.5%, respectively. In 2002, industrial products accounted for 88.4% of exports (machinery and equipment for industrial and consumer purposes – 66.3%), oil and oil products – 9.0%, agricultural products – 2.4%, mineral raw materials – 0.2%. At the same time, for high-tech products already in the middle. 1990s accounted for 32.5% against 2.6% in 1980. In the 1990s. Mexico is the world’s 4th largest exporter of machinery and equipment to the US after Germany, Canada and Japan, surpassing the UK, Italy and France. K ser. 1990s Mexico accounted for 75% of high-tech products exported by the Latin American region.

Mexico also exports silver, cotton, textiles, shoes, sugar, fruits, vegetables, coffee, cocoa, shrimp, fish, etc. Main imports: machine tools and equipment, rolled steel, agricultural machinery, electrical equipment, automotive parts for assembly, auto parts for repair, aircraft and spare parts for them, food, raw materials and semi-finished products. The main foreign trade partners (2002,%) in terms of exports: USA (89.0), Canada (1.7), Spain (0.9), Germany (0.7), Venezuela (0.4); imports: USA (63.2), Japan (5.5), China (3.7), Germany (3.6), Canada (2.7).

Inflows of direct private investment in 2002 amounted to $13.6 billion, remittances from Mexicans working abroad – $9.8 billion (compared to $5.6 billion in 1998), foreign exchange reserves (at the end of the year) – 48 billion, external debt – 155 billion, of which 78.8 billion were in the public sector, 76.2 billion – in the private sector.

The per capita national income, calculated at the purchasing power parity of the currency, was estimated in 2001 at $8,240. Living below the poverty line, St. 40% of Mexicans with an income of less than $1 a day have St. 10% of the population, less than 2 dollars – almost 1/4. The minimum wage ($4.2 a day in 2002) is indexed annually to inflation. According to the Human Development Index, Mexico ranks 55th in the world.

Economy of Mexico