Public PolicyMadison Samuels, Andrew Kendall,

Megan Glova, Lauren Dunlap

HDI,GDP, GNIAndrew Kendall

HDI

Human Development IndexBased on a formula that takes into account

the three factors of longevity (life expectancy at birth), knowledge (literacy and average years of schooling), and income (according to PPP).

Mexico’s literacy rate is 86.9% for men and 85.3% for women.

Mexico’s life expectancy is 73.25 for men and 79 for women.

GDP

Gross Domestic ProductGDP is the monetary value of all the

finished goods and services produced within a country's borders in a specific time period.

Usually calculated on an annual basis.Official Exchange rate: $1.163 trillionGDP per capita (PPP): $15,300

GNI

Gross National IncomeGNI is the gross domestic product (GDP)

plus net receipts of primary income (employee compensation and investment income) from abroad.

The latest value for GNI in Mexico was $1,012,540,000,000, as of 2010.

Problems and ReformsMadison Samuels

Mexico’s Problems

Growing Gap Between Rich and PoorGrew due to rapid economic growth1940-1980 Mexico had one of the most

unequal income distribution of all the LDsThe bottom 40% never making more than

11% of the total wagesHas become a little less of a problem but

still an important one

Problems Continued

Rapid and Unplanned UrbanizationMajor cities (The Fed District, Guadalajara,

etc) became overpopulated disastersMillions of people without sewers,

electricity, or running waterBad highway planningNo mass transitAmong the worst traffic in the worldDirty air unsafe to breathe

Reform

President Miguel de la Madrid started dramatic reforms which continued through Salinas and Zedillo’s presidency

Sharp cuts in government spending◦Austerity plan reducing government spending◦Job cuts◦Subsidies to government agencies removed◦Eliminated hundreds of public enterprises

Reforms continued

Debt ReductionUS devised a plan that allowed more

generous repayment terms and gave loans a reduced interest rate

Mexico still suffers from debtAverage of $10 billion of interest

payments a year

PrivatizationEconomic power of Madrid’s government

were reducedPrivatized many public enterprisesSpecial laws and cheap labor made US

companies invest in Mexico

Attempted Energy Reform

Felipe Calderon, president starting in 2006, created a reform to give PEMEX (Mexican petroleum company) “greater budget autonomy” and to intensify the oil industry’s regulations

Also allowed PEMEX private contractors and contracting of refining

Legislature opposed because they believed Calderon was trying to privatize PEMEX

Population IssuesLauren Dunlap

Population Background

114 million peopleMost populous Spanish-speaking country

in the worldPopulation growth has slowed significantly

to approximately 1.1%Population is still increasingGaps in population between:

◦Urban and Rural ◦North and south

Urban Population

75% of entire population lives in the cities or along the coasts

21 million living in or close to itUrbanizing rapidlyShifting from rural to urban has disrupted

traditional politics in Mexico, including the patron-client system

Northern Population

More prosperous than south many involved in trade with the United

StatesMiddle class with high educationExpanding faster than south

Southern Population

Less influenced by urban areas and the United States

Lower incomes than in the NorthTypical adult only has about 6 years of

schooling (compared to the north’s 8 years)

Population Issues Summary

Gap between North vs. South and Urban vs. Rural divide the population

Incomes of the poorest half of the population are growing faster than the average

Population issues are effecting the economy

Foreign AffairsMeghan Glova

Foreign Policy

After the 1982 crisis, it became obvious that a policy was needed to encourage an increase in Mexican exports and open markets to foreign goods.

Foreign Policy Continued

After 1982, Mexican private industries were encouraged to produce goods to export, tariffs were reduced (and even eliminated), and there were loosened restrictions on foreign property ownership

Maquiladora

In the 1960`s a manufacturing zone was established south of the United States border in Northern Mexico. The workers in this maquiladora district produced a majority of their goods for United States consumers.http://www.youtube.com/watch?v=EDMpwwIToTc

Maquiladora and NAFTA

In 1995, Mexico, the United States and Canada signed the North American Free Trade Agreement (NAFTA) to eliminate free trade barriers in the three countries. Now, those working in the maquiladora make up 20% of Mexico`s labor force.

Trade Agreements

GATT/WTO (1986) -The General Agreement on Tariffs and Trade- Attempted to promote an increase in free trade among countries.- This agreement created the World Trade Organization (WTO) - Mexico has now begun to export goods besides oil, and has started to trade with a variety on different countries besides the United States.

Trade Agreements

NAFTA Main goal: integrate the economies of

Mexico, Canada and the United States by reducing restrictions and eliminating tariffs so companies have more freedom to expand.

Negatives for Mexico: Mexico could be “overshadowed” by the United States, and these two countries have gotten into political battles over road transport.

Immigration Policy

NAFTA does not allow a free flow of labor across borders.

Vicente Fox proposed an immigration policy including guest worker programs, amnesty for illegal immigrants, increase in issued visas, and movement to an eventual open border.

Fox`s plan would have let Mexicans work in the United States legally and offered green cards to illegal immigrants living in the United States.

Fox assured he would prevent additional illegal immigration by tightening the Mexican border

Immigration to US

“Building Blocks”Article on free trade by The Economist.

http://www.economist.com/news/finance-and-economics/21568717-regional-deals-are-only-game-town-supporters-free-trade-are-they-any