The Economy of Mexico
In 2016, Mexico’s nominal gross domestic product was $1.1 trillion, with an average per-capita income of $8,700. The economy of Mexico experienced moderate growth between 2001 and 2008, but dropped significantly by 6% during the global financial crisis of 2008. The country currently employs 53 million people and has a 6.5% unemployment rate. More than half of the workforce works in the services sector.
Economic challenges in Mexico
Mexico faces a range of economic challenges. The country’s rapid growth is tempered by internal economic issues, including the presence of criminal groups that obstruct business activities and charge them for “security.” On the World Bank’s ease-of-doing-business index, Mexico ranks 60th out of 190 countries. For example, electricity is a challenge, and the process of filing taxes takes about 241 hours per year for formal-sector firms. In the southern states, where the economies are most disadvantaged, there is also a shortage of basic infrastructure.
Another set of economic challenges is the government’s inability to get the wealthy to pay their fair share of taxes. Some of the wealthiest people and companies in Mexico have long avoided paying taxes. Whether or not this government will be able to convince the fat cats to pay their fair share depends on how it implements new tax laws and how it restructures the financial system to reduce the leakage in tax collection.
While these economic challenges pose problems for many Mexicans, some reported positive experiences. Three of them mentioned the improvement in working conditions, while two others talked about a better housing situation. These workers stressed the importance of the need to ensure that workers receive basic human rights. The governments of Mexico and Canada should work together to ensure that workers’ rights are protected.
In addition to the high cost of living, Mexico is not able to pay its debts, putting the country in a vulnerable position. Mexico’s currency depreciated in the late 1980s, which made it more expensive for the private sector to finance its debts. Further, the currency’s depreciation prevented the country from attracting additional external credit.
As a result, many Mexicans are returning home. In fact, the number of Mexicans attempting to migrate to the United States has decreased to zero, according to the Princeton University Mexican Migration Project. Furthermore, tougher immigration laws in the southern U.S. have forced many people to leave the country and return to Mexico.
Among other factors contributing to the deterioration of working conditions, Mexican agricultural workers face racial discrimination. In addition to this, they are often subject to abuse. Many of them have little or no access to human rights protections. In some cases, they are even forced to work in conditions that are not safe.
Another area of concern is the state of the environment. The state of Jalisco is engaged in an effort to clean up the industry and protect the environment. It is working to adopt a new regulatory framework for the sector, aiming to steer it away from toxic chemicals. During the recent conference, groups of local brick cooperatives from throughout Mexico were represented. There was also an array of experts, microfinance institutions, and civil society organizations.