Mexico: Country Factfile

Overview Area
1,972,545km 2

Population density
55.0 people/km 2

Currency
Mexican new peso (NP = 100 centavos)

Location
Mexico extends for well over 2,000km from its northern border with the US down to the boundaries with Guatemala and Belize in the south. It has coastlines on both the Atlantic and the Pacific and embraces a wide range of territorial types. The landscape is partly volcanic and is subject to earthquakes. The capital is Mexico City.

Head of state
Felipe Caldern (2006)

Head of government
Felipe Caldern (2006)

Ruling party
The National Action Party (PAN) currently leads the governing coalition but a new coalition may eventually be formed following the latest election.

Political structure
Mexico is a parliamentary democracy with an executive president. The president is elected for a single six-year term by universal suffrage. Parliament has two chambers. The Chamber of Deputies has 500 members, elected for three-year terms; 300 members are elected in single-seat constituencies and 200 members are elected by proportional representation. The Chamber of Senators has 128 members, elected for six-year terms; 96 members are elected by plurality vote in multi-member constituencies and 32 are elected by proportional representation.

Last elections
Presidential elections were held in July 2006. Felipe Caldern of the National Action Party narrowly defeated Manuel Lpez Obrador (Alliance for the Good of All) in the five-candidate race. Elections to the Senate occurred at the same time in 2009. PAN won 52 seats and the Alliance for the Good of All won 36 seats. The Alliance for Mexico took 39 seats and the remaining seat was claimed by a smaller party. Elections to the Chamber of Deputies occurred in July 2009. PAN now holds 147 seats. The Institutional Revolutionary Party controls 241 seats and the Party of the Democratic Revolution has 72 seats. Other parties in the Chamber include the Ecologist Green Party (17 seats), the Labour Party (9 seats), the New Alliance Party (8 seats) and the Convergence Party (6 seats).

Political risk
The government is fighting a desperate war against powerful drug cartels. The three cartels based in the border cities of Tijuana and Jurez and on the Gulf coast reap profits of more than US$13 billion per year. The level of violence and the number of kidnappings is on the rise throughout the country and threatens to spill over the border with the USA. Poverty has been reduced but one in two Mexicans still lives in poverty. In the southern part of the country three in four are in poverty.

International disputes
Mexico has several problems with Washington. The major source of tension is the various proposals to tighten immigration controls in the US. Between 400,000 and 500,000 Mexicans leave Mexico each year for the US. However, Washington is unlikely to pass new laws on immigration for another year or more. Relations with Guatemala are occasionally strained owing to its assumed contacts with the Chaiapas rebels in the southern part of that country.

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Main industries
Agriculture makes of 3.4% of GDP and employs 12.8% of the workforce. Government aid to the sector is slanted significantly in favour of large farms but it is the many small farmers who face the most problems. Officials admit that only about 5% of all farms are efficient and profitable. Major exports are citrus crops, tomatoes, peppers, cotton, coffee and sugar cane. In 2010, there have been reports that drug cartel members have moved into several agricultural operations. The oil industry's significance has fallen but it is still important to the economy. Oil generates over 10% of the country's export earnings and 40% of all government revenues. Pemex, the state oil company, is the world's fifth largest oil company and the single most important entity in the Mexican economy. Mexico's federal government relies on Pemex for approximately one-third of its budget. This financial obligation makes it difficult for Pemex to make the necessary capital expenditures to maintain its production levels and to increase Mexico's hydrocarbon reserves. Manufacturing accounts for 18.0% of GDP. Output contracted by 6.5% in real terms in 2009 but a recovery began in the first quarter of 2010. Worst hit were the construction and automobile industries. Car makers represent about 30% of all manufacturing activity. Their output fell sharply in 2009 but gains of 20% or more are forecast for 2010 as the domestic and US markets recover. Vehicle exports soared in the first quarter of 2010. Meanwhile, textile producers continue to struggle. Manufacturers of machinery and equipment also face weak markets. Growth in the service sector is slowing. Tourism provides employment for more than 13% of the work force. The sector has been hit by a combination of problems but the real value of receipts still rose by 6.9% in 2009. Receipts are expected to rise by just 1.2% in 2010 however. The banking industry is very small. Private bank credit is less than 20% of GDP. This fact helps to insulate the country from the present turbulence in global markets but it also restricts companies' access to credit.

Economy
Facing a number of unique problems, Mexico's economy has been growing slower than that of most of other large Latin American countries for more than a decade. These include the violence related to the crackdown on drug cartels, a flu epidemic and trade disputes with the USA. Even worse, real GDP fell by 6.5% in 2009 the country's worst annual slump since 1932. Mexico's surprising decline began with the outbreak of H1N1 virus. It is estimated the flu alone cost the country more than US$2 billion in 2009. The recession in the USA led to a sharp drop in exports a feature which was accentuated by NAFTA. The recession in the USA also resulted in a large drop in Mexican remittances. More than ten million Mexicans equivalent to one-tenth of the country's population have been working in the USA. Unskilled migrants typically earn six times as much in the USA as they would at home. Mexico is also loosing many of its trained professions. Nearly 7% of all Mexican professionals are thought to have immigrated to the USA over the past decade. Migrants send home about one-quarter of their earnings as well as accumulating savings during their stay in the USA. Remittances have long been a major support for private consumption in Mexico.

Energy
Mexico has 11.3 billion barrels of proven oil reserves, the third-largest amount of conventional crude oil reserves in the Western Hemisphere. There have been complaints that Pemex (the state-owned oil company) does not have sufficient funds available for exploration and investment, owing to high financial burdens placed upon the company by the government. Pemex also has the problem that Mexican law does not allow for joint venture. Daily oil production has fallen by about 40% since 2004. Production at Cantarell, once the world's third-largest oil field, peaked in 2003. Today, the field struggles to produce a quarter of that. Proven reserves have been dropping so fast that the country could become a net importer in just a few years. Energy officials have called for US$130 billion of investment in Mexico's oil sector, as well as for permitting investment by foreigners. The money would be used for capital improvements and refinery upgrades. Pemex also hopes to increase crude oil production to 4 million barrels per day. In response, the government will cut the royalty Pemex pays over several years. Capital spending is expected to rise by around 20% but it is not thought this will be enough. Natural gas reserves total 0.5 trillion cubic metres. Both production and consumption of natural gas are steadily rising. Together, oil and natural gas will likely remain the dominant energy sources until 2020, accounting for well over 80% of total energy consumed.

Statistical Summary
2004 Inflation (% change) Exchange rate (per US$) Lending rate GDP (% real growth) GDP (national currency millions) GDP (US$ millions) Population, mid-year ('000) Birth rate (per '000) Death rate (per '000) No. of households ('000) 4.7 11.29 7.4 4.0 2005 4.0 10.90 9.7 3.2 2006 3.6 10.90 7.5 5.0 2007 4.0 10.93 7.6 3.3 2008 5.1 11.13 8.7 1.5 2009 5.3 13.51 7.1 -6.5

8,557,290.0 9,221,550.0 10,344,800.0 11,176,000.0 12,110,600.0 11,823,000.0 758,223.9 103,474.4 21.6 4.6 24,196.4 846,177.4 104,410.6 20.9 4.7 24,803.6 949,130.3 105,332.5 20.2 4.7 25,456.0 1,022,676.1 106,237.6 21.2 4.8 26,138.7 1,087,769.5 107,235.8 21.5 4.9 26,857.4 874,961.2 108,392.1 21.0 5.1 27,588.0

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Total exports (US$ millions) Total imports (US$ millions) Tourism receipts (US$ millions) Tourism spending (US$ millions) Urban population ('000) Urban population (%) Population aged 0-14 (%) Population aged 15-64 (%) Population aged 65+ (%) Male population (%) Female population (%) Life expectancy male (years) Life expectancy female (years) Infant mortality (deaths per '000 live births) Adult literacy (%)

187,998.6 196,809.7 10,796.0 6,959.0 78,278.3 76.0 31.2 63.2 5.7 49.3 50.7 72.0 77.0 17.7 91.0

214,233.0 221,819.5 11,803.0 7,600.0 79,319.8 76.3 30.7 63.5 5.8 49.3 50.7 72.2 77.0 17.2 91.6

249,925.1 256,058.4 12,177.0 8,108.0 80,351.5 76.6 30.2 63.9 5.9 49.3 50.7 72.4 77.2 17.0 91.7

271,875.3 281,949.0 12,852.0 8,375.0 81,378.5 76.9 29.6 64.3 6.1 49.2 50.8 72.6 77.4 16.7 92.8

291,342.6 308,603.3 13,289.0 8,526.0 82,390.2 77.2 29.1 64.7 6.2 49.2 50.8 72.7 77.5 16.6 93.0

229,783.0 234,385.0 13,598.6 8,718.9 83,566.4 77.5 28.5 65.1 6.4 49.2 50.8 72.9 77.6 16.4 93.4

Imports and Exports

Major export destinations North America Latin America Europe Asia-Pacific Other countries Africa and the Middle East 2008 Share (%) Major import sources 82.6 North America 7.6 Asia Pacific 5.9 Europe 2.5 Other countries 0.7 Latin America 0.4 Africa and the Middle East 2008 Share (%) 52.1 20.7 13.1 7.0 4.9 1.7

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