Introduction and Policy Recommendations
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Several foreign born students living in California have completed a study of their home country governments' economic policies as compared to the MIEPA list of policies as outlined above. The study on Mexico is shown below. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2012. Used herein with permission]
To read a disclaimer about the analysis in this file, scroll to the bottom of the file.
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Comparison of Mexico's economic policies to MIEPA criteria as prepared by native student of Mexico, Ms. Damaris Ortiz, studying in San Francisco in Spring, 2012.
RATING SUMMARY POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 5.0 15.0 15.0 100% 2 4.5 13.5 15.0 90 3 1.0 3.0 15.0 20 4 4.5 13.5 15.0 90 5 1.5 4.5 15.0 30 6 3.0 9.0 15.0 60 7 3.5 10.5 15.0 70 8 4.0 12.0 15.0 80 9 1.5 4.5 15.0 30 10 2.0 6.0 15.0 40 11 4.0 12.0 15.0 80 12 1.0 3.0 15.0 20 13 4.0 8.0 10.0 80 14 3.5 7.0 10.0 70 15 3.0 6.0 10.0 60 16 3.5 7.0 10.0 70 17 2.0 4.0 10.0 40 18 2.5 5.0 10.0 50 19 3.0 6.0 10.0 60 20 2.0 4.0 10.0 40 21 1.5 3.0 10.0 30 22 4.0 8.0 10.0 80 23 4.5 9.0 10.0 90 24 1.0 2.0 10.0 20 25 1.5 3.0 10.0 30 26 3.5 7.0 10.0 70 27 3.0 6.0 10.0 60 28 3.5 7.0 10.0 70 29 2.5 2.5 5.0 50 30 3.0 3.0 5.0 60 31 4.0 4.0 5.0 80 32 1.0 1.0 5.0 20 33 1.0 1.0 5.0 20 34 3.0 3.0 5.0 60 TOTAL 96.0 212.0 375.0 56.5% ===== ====== ===== =====Return to MIEPA's Home Page
MEXICO - INDIVIDUAL POLICIES - DAMARIS ORTIZ
1. Freedom from Internal Control: 5.0
Mexicans can move around the country with no restrictions whatsoever.
Sources: Personal Opinion
2. Freedom of Speech: 4.5
Article 6 and 7 protect the freedom of speech. There are no restrictions on this law and people really take advantage of this. Teachers, students, and indigenous groups always try to march in the capital of the country to be heard and the government has a good response except of the massacre of 1968, also known as the Tlatelolco Massacre “Mexico ’68,” where the government killed thousands of people.
Sources: Personal Opinion ; http://en.wikipedia.org/wiki/Mexico_68
3. Effective, Fair Police Force: 1.0
Because of the corruption in Mexico, the government can’t fully control the police force and its effectiveness. The main problem in Mexico, is that the many government employees do not follow the rules and that is where the corruption comes from. In some places one is even afraid of the police because they will ask for money in exchange of one’s liberty, if not money is provided they could take you in jail sometimes for a misdemeanor. This is a problem where Mexico really needs to focus to improve.
Sources: Personal Opinion
4. Currency: 4.5
The Currency in Mexico is the ‘Peso.’ Banco the Mexico is the only bank that can provide the pesos. Current exchange as of today: 13.79 pesos per dollar.
5. Private Property: 1.5
There is a lot of piracy in Mexico. There are well established business but Mexico takes the 4th place worldwide in piracy and 1st place in Latin America. In 2006 it brought 200 million dollars in losses.
Sources: Personal Opinion ; http://www.jornada.unam.mx/2007/07/04/index.php?section=economia&article=027n1eco
6. Commercial Banks: 3.0
Since the 1997 when the economy was slowly improving, commercial banks have offering better rates for the population. There is a saying in Mexico about the banks and the economy, it is that we do not own our own country, and it is said because most banks are foreign own, an example is Banorte and Bank of Mexico. Although the rates to individuals are getting better, for smalls business are still very high.
7. Communication Systems: 3.5
Mexico has very good communication systems. The communications market in Mexico is among the longest in America, released in 1990, with notable privatization of state monopoly TELMEX (telefonos de mexico.) Telmex has a diversified its operations by incorporating the services of Internet and mobile telephony. In April 2009, the ITESM (instituto tecnologico y de estudios superiores de Monterrey) reported 25,217,500 users, 78% of personal computers internet access, had access to broad band. There are approximately 7.6 million Internet hosts in Mexico, eight in the world rakings.
8. Transportation: 4.0
Transportation within the states is efficient and somewhat affordable, they use long distance bus. To get around the city Distrito Federal, is very convenient since the city is very busy with cars so the easiest way to get across the big cities is the subways or taxi services. Mexico has railroad network that unites cities within the country. However, the majority of the population chooses to use bus because it is faster and covers more national destinies. In fact one can take train from United States or Canada to get to Mexico.
9. Education: 1.5
Mexico’s level of education is very low, but the irony is that the country invest more money than many other countries. The problem is that the government is investing money and not monitoring the progress some programs have. For example In 2011 the program “Escuela de Calidad” (quality schools) had an increase of 25% which comes to 1,602,000 of pesos. UNESCO (Organization of the United Nations Educational, Scientific and Cultural Organization) since 2009 warned that in 2010 education in Mexico was at serious risk to the announced budget cuts. Also put the country on a list of nations with poor performance in the education sector in 2008, along with Congo, Sudan, Pakistan, Saint Vicent, Cameroon, Kyrgyzstan and Kenya. 5% of the GDP is placed for education purposes.
Sources: http://www.jornada.unam.mx/2010/04/04/sociedad/026n1soc ; http://www.uaemex.mx/feconomia/Publicaciones/Economia%20actual/EA_34/carmen.pdf
10. Social Mobility: 2.0
Mexico is a country where social mobility grows very slow, the statistic say that in the past 70 years, only 4% of the lower class population reaches the high class level, also every 8 out of 10 middle class population has gone down to the lower class level.
11. Freedom from Outside Control: 4.0
Today, Mexico is a sovereign, free and able to choose its own destiny, a democratic nation in which there is freedom to think, to criticize and dissent, freedom to organize to fight ideas and freedom to elect leaders and representatives. It is its own nation, which can choose what happens in it.
12. Border Control: 1.0
Border control is very violent at the border of Mexico and Guatemala and not very secured. It has improved some in the past year (2010-2011) because of the new government but it still has lot to improve on. Weak control on both sides of the borders. There is more poverty in El Salvador, and Guatemala than in Mexico and therefore many people cross the border everyday.
Sources: Personal Opinion
13. Foreign Currency Control: 4.0
Pesos is the currency in Mexico and it currently is 13.7 pesos for one dollar. Some states like Cancun accept dollar, depending on how high the truism.
14.Cultural and Language Homogeneity: 3.5
The Mexican culture is very diverse. Because the education levels are different in different areas of Mexico the cultural differences are even more noticeable. The main language spoken is Spanish but there are 68 dialects spoken in Mexico.
Sources: Personal Opininon ; http://es.wikipedia.org/wiki/Lenguas_de_México
15. Political Effectiveness: 3.0
Even thought the economic stability is not a very good one, the government has managed to keep improving even if it is just a small percentage. One of the worst presidents was Carlos Salinas de Gortari (1988 to 1994) under the PRI party, during the last year of there were unexpected events and macroeconomic mistakes, which questioned the capacity of Salinas de Gortari as a president of the nation. Specialists have analyzed the way of government in the country and it has been concluded that the country needs more capable people to govern such a large and complicated structured country.
Sources: Personal Opinion ; http://en.wikipedia.org/wiki/Carlos_Salinas_de_Gortari
16. Institutional Stability: 3.5
Since the change of government, people have a sense of stability and based on the past administration, the government has improved in the economic stability. As of 2012, people are electing the new government and the PRI is most definitely being judged based on the past economic results. Based on statistics, the PRI is not winning the elections.
17. Honest Government: 2.0
The PRI (Partido Revolucionario Insitucional) was in power for over 70 years. The fact that this party was in power for so long has people thinking that the government is not honest. Based on statistics, for many years re-elections people voted for a different party other than the PRI. Ranked in red numbers, Mexico is positioned in the 108th place, which means the corruption level is very high. It is difficult to say if the corruption level is lower because the PRI has been out of power for such a short period of time, not that the PAN is completely honest but the change needs more than just four years.
Source: Personal Opinion ; http://en.wikipedia.org/wiki/Corruption_Perceptions_Index
18. Common Laws: 2.5
Mexican government also has a constitution, which is set to protect the citizens. For many years since the PRI (Partido Revolucionario Institucional) has been in power. The protection to the citizens during this time was almost none. It was not until six years ago when the power was switched over to the PAN (Partido Accion Nacional) where citizens could see a different reality. This new party was involved more with the improvement of life in Mexico. The protection to the citizens and battles against the drug traffickers improved a lot. People have a better understanding of their rights but the government does not follow the constitution one hundred percent.
Source: Personal Opinion
19. Central Bank: 3.0
“El Banco de Mexico” is the central bank of the United States Of Mexico. Under constitution, it is autonomous in its functions and administration. Its purpose is to provide the economy of currency and its primary objective is to ensure the stability of the purchasing power of that currency. Also is up to promote the healthy development of the financial system and promote smooth operation of payment systems. In general people trust the bank and there has been no complains about financial problems with the central bank towards the population.
Sources: National reserves: http://www.banxico.org.mx/SieInternet/consultarDirectorioInternetAction.do?accion=consultarCuadro&idCuadro=CF106§or=4&locale=es ; Personal Opinion ; ?http://www.banxico.org.mx/
20. Domestic Budget Management: 2.0
Taxation form is based on individual and on business as well. Many do not declare taxes to an individual level, the government does not really check on those who do not declare them. On the other hand, small businesses have to pay taxes no matter what and if they miss the process, they would close down their businesses.
21. Government Debt: 1.5
The government is subdivided into 2 categories: external debt and domestic debt. External debt is owed to foreign governments, such as United States or Europe, banks, institutions and individuals.
External debt: US $46,208.08 million.?Domestic: US$192,218.7 million. ?Total: US$238,427.6 million.
Therefore Mexico’s debt level is: 5.9% of its GDP in foreign debt.24.4% of its GDP in domestic debt.30.3% of its GDP for total public debt.
22. Economic Statistics: 4.0
Most people don’t know what the economic statistics of the country are. Overall people don’t have trust in the government so it is hard for them to believe any of the public government information provided.
The economic statistics of Mexico can be found at: www.economia.gob.mx ; www.cia.gov
23. Protection of Public Health: 4.5
Mexican health care program IMSS (Mexican Social Security Institute, founded 1943) and the ISSSTE (Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado) are Public health care delivery, is accomplished via an elaborate provisioning and delivery system put in place by the Mexican Federal Government. Health care delivered through private health care organizations operates entirely on the free-market system, i.e., it is available to those who can afford it. IMSS and ISSSTE are programs, which helps the community even though the quality of service is the best, most of these programs fulfills the needs of patients.
Sources: http://en.wikipedia.org/wiki/Health_care_in_Mexico ; Personal Opinion
24. High Wage Policy: 1.0
The minimum wage is divided by different geographic areas, area A: 62.33 pesos per day; area B: 60.57 pesos per day and area C: 59.08 pesos. For the year 2012 the minimum wage went up 4.2% and even though this sounds like good news, it is not. The Fact that the wages are 62 pesos per day, which is around $6 dollars, makes poverty higher. This is why most families have their children work on the streets to support the families and due to the fact that none of these products are taxed, it is almost impossible to know exactly how much of this money is made by children working illegally. The statistics say that the wage will go up to a 5% this year, which will also increase the GDP.
Sources: Personal Opinion ; http://elinpc.com.mx/inpc-de-mexico/ ; http://elinpc.com.mx/tag/salario-minimo-en-mexico-2012/
25. Environmental Protection: 1.5
1992 was a very important year for the country but in a horrible way. It was the year when Mexico City was described the most polluted on the planet. The industrial and population growth were one of the principal factor that contributed to such fact (from 3 million in 1950 to 20 million today), and more than 3.5 million vehicles (30% of those are 20 years old).
Located in the crater of an extinct volcano, Mexico City is about 2,240 meters about sea level; the lower atmospheric oxygen levels at this altitude cause incomplete fuel combustion in engines and higher emissions of carbon monoxide and other compounds. In the difficult journey Metropolitan Environmental Commission has been trying to solve the problem. Recently there have been programs like PIICA and PROAIRE, which include a rotating one-weekday ban on a private car use. Reducing both ozone and PM10 (Pollution) by just 10% would result in average savings of US $760 million a year.
26. Strong Army: 3.5
Theatrically, the army is an entity known for non-corrupt. Generally, people trust the army because they have been good at defending the country from drug dealing and unsafe strikes (which happen very often). The military It is made by the navy, the army, and the air force. Last year’s spending on the military was 4.859 million dollars which is approximately 4% of the GDP.
Sources: Personal Opinion ; http://www.excelsior.com.mx
27. Protection of Foreign Currency Earning Enterprises: 3.0
The foreign currency earning enterprises play a big roll in the economy. It is the competency that is not helping the internal economy. For example the company AT&T in Mexico does not pay nearly as much for employment as what they pay here. At the end foreign companies just bring exports, which is not bad but it is not the best because domestic companies would make the economy grow faster.
28. Foreign Trade Impact: 3.5
Total exports 298.5 billons dollars plus the total imports 301.5 billions dollars, then divide that into the annual GDP 941 billion dollars equals that the foreign trade has an impact of 63.8% over the total GDP in 2004. ?Exports create more unemployment in the country, which directs people to look opportunities overseas.
Sources: http://en.wikipedia.org ; CIA Fact book on Mexico
29. Management of Foreign Currency Budget: 2.5
While Mexico has a trade deficit, it is only about 3% of GDP.
Exports: $298.5 billions dollars
Imports: $301.5 billions dollars
$298.5 billion dollars- $301.5 billion dollars / $941 billion dollars = 3%
Even though the exports grew 12.6%, the Producto Interno Bruto (GDP) only grew 4% (April 2011). Even though the numbers seemed to grow as of last year, the poor are getting poorer and the small businesses have fewer opportunities to grow into large businesses.
Sources: http://en.wikipedia.org ; http://eleconomista.com.mx ; http://buenasnoticiaseconomicas.com ; http://en.wikipedia.org ; CIA Fact book on Mexico
30. Layers of Collective Action: 3.0
Mexico is a democratic country. The country is made by free and sovereign 31 states and 1 federal district. The federal government is integrated by 3 powers, executive, judicial and legislative. But the sovereignty resides in the people. The federal executive power is deposited in the president of the United States of Mexico. They can rule for 6 years and have no chance of re-election. The senate is integrated by 3 senators for each federal entity and 32 are assigned for proportional representation. The senate is renewed every six years. The Chamber of Deputies is composed by 300 deputies that represent those electoral districts and 200 are elected for proportional representation.
Sources: Personal Opinion ; www.wikipedia.com
31. Pro-Business Climate: 4.0
Since the expansion of a small or medium business to a large company is difficult, the way to become part of a big company is by investing money and becoming a shareholder of an already existing and successful business. Mexico is very supportive of international business. Telmex for example is one of the leading international communications companies, which has established business in the U.S and Latin America.
Sources: http://www.promexico.gob.mx ; Personal Opinion
32. Government Enterprises: 1.0
Mexico is pretty much ruled by a few extremely wealthy families who are either business owners or leaders in government enterprises who are not there for their own achievement but because their families have been working there and their father or mother left the position for them. Because of the inequality and the corruption of these process of electing leaders, the economy of some of this company is not as good as it could be.
Source: Personal opinion
33. International Security Agreements: 1.0
National security is an issue for the country. International security is a bigger issue. Mexico is a pacifist country, which is not necessarily against war but, cannot afford it. The military system is overruled by the famous “mordida” which is a “bite” which is translated to corruption, a “bit of money” you give money to the military and they might just let you by with thousands of dollars worth of drugs.
Source: Personal opinion ; www.eleconomista.com.mx
34. Protection of Domestic Enterprises from Government Mandated Cost: 3.0
Mexico being a democratic country facilitates and supports small business and it is not difficult to obtain a business permit. Mexico is placed the 4th in facilitations to make business. Opening a bookstore for example is very easy, first one needs to obtain a permit from the government, have a capital and register the business. After three months the business owners need to pay taxes to the government and the business is analyze. If the government thinks this is profitable business they will let it run as long as they pay taxes. This is for small and medium business. For larger businesses however, it is very difficult. The same bookstore for example if they wanted to expand, they would have to create to pay social security through IMSS (social security institute of Mexico) and make monthly and bimonthly payments. That is one of the main obstacles for a small business to expand. For a restaurant, it is important to have a health department permit as well. Even though many permits are obtain, mane people open a small business and might be on troubles in the first year or two, and the government is not very supportive on helping business who are at risk of going bankrupt.
Sources: Personal Opinion ; www.eleconomista.com.mx ; http://www.diputados.gob.mx/LeyesBiblio/ ; www.altonivel.com.mx
DISCLAIMERAll the information and conclusions in each country analysis are solely the responsibility of the indivi dual student and have not been verified, corrected, checked for copyright infringement or evaluated in any way by MIEPA or Mike P. McKeever. You are solely responsible for the results of any use you make of the information and conclusions in these studies. Use them at your own risk as interesting supplemental information only instead of seasoned judgements about the policy factors contained herein. Each student has granted permission for his or her work to be displayed here under his or her own name or wishes to remain anonymous and have either created a pen name or used no name at all; if you wish to contact them for any reason, forward your request to MIEPA and the student will be notified of your interest.
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