The economy of Mexico is a free market economy. The three major factors that make up the Mexican economy are industry, agriculture, and service. The rural areas of Mexico deal mainly with the agricultural parts of the Mexican economy, and the urban areas deal with the industry and services. Agriculture is considered to be one of the greatest failures of modern Mexico. 25% of Mexico's population lives in rural areas, but agricultural production only makes up 9% of the country's GDP (Mexico's Economy). Much of the agriculture lies in the production of fruits, vegetables, and sugar cane. Much of the industry is dominated by the private sector. The industrial sector accounts for 90% of all export earnings. The main industrial industry lies in the automotive industry. Although industry is dominated by the private sector, the ownership of oil deposits is only controlled by the government. The service industry of the country contributes most to Mexico's GDP. The service sector of the country accounts for 75% of Mexico's GDP . Furthermore, the service sector also provides 58% of the population with employment (Mexico's Economy).
Mexico is very friendly with many other countries. Mexico holds more trade agreements than any other country in the world. Mexico's largest trading partner is the United States. After oil and gas, most of Mexico's exports go to the United States. Mexico really relies on the United States to buy exports as 80% of Mexico's exports are bought by the United States (Villareal).
Sources:
Villareal, M. Angeles. "US-Mexico Economic Relation: Trends, Issues, and Implications."
Congressional Research Service. 25 Jan. 2012.
Web. 24 Feb. 2012. <http://www.fas.org/sgp/crs/row/RL32934.pdf>.
"Mexico's Economy." BAJA CALIFORNIA BajaQuest All
About BAJA. Web. 24 Feb. 2012. <http://bajaquest.com/faq/economy.htm>
Very good post! I was especially interested in your fact about their failed agriculture. I never really thought about Mexico's economy, but come to think of it, I'm pretty sure I've always assumed that their agriculture made them a lot of money. That happened in Puerto Rico too. I wonder if there's a connection.
ReplyDeleteI also had no idea Mexico was a free market economy.
I also appreciate that you added percentages. It's always nice to have numbers in order to truly understand something as complicated as a country's economy.
It's also good to read that Mexico's on good standing with other countries in terms of trade. I did not know that they hold the most trade agreements in the world.
My only question would be how tourism affects Mexican economy. Or does it affect the economy at all? I only ask because Mexico is a prime spring break spot so I'd assume they made a lot of money from tourists.
Nanyamka,
DeleteThank you for your posts. You have also made a good point. Tourism in Mexico is a very large part of the economy.Mexico actually ranks number one in tourism among the Latin American countries.Furthermore, according to the United Nations World Tourism Organization, Mexico ranks tenth in international tourism destinations.
As you said, the most notable attractions of Mexico are its vast beaches, but many people also travel to Mexico to see the Meso-American ruins as well as the colonial cities. The vast majority of tourists come from the United States and Canada.
Thank you for your questions and I hope this helped.