The Economist article, Making The Desert Bloom, brings to light the condition that Mexico's economy is currently in, restricted by cartels, monopolies and its unfortunate situation with America.
Reilly
Connor Reilly
Economics - Mrs. Sickle
14 October 2011
Current Events
Desert Economy Struggling To Stay Afloat
When America’s economy fell into a recession in 2008, it took down mexico along with it. America is by far the largest buyer of Mexican products, last year alone doing $400 billion in business. The Economist article, “Making The Desert Bloom,” brings to light the condition that Mexico's economy is currently in, restricted by cartels, monopolies and its unfortunate situation with America. When stocks plummeted and jobs were lost in america, Mexico's economy as a whole fell by 6.1%, the northern state of Coahuila getting hit the worst with a drop of 12.3%. Until the recession, Mexico was on schedule to have a reasonable decade but with personal income growth now at only 0.6% , some of the worst in the world, it doesn't look promising. Mexico's unemployment rate peaked at 6.4% in 2009 and is only slowly getting better. The foundation of Mexico's economy is based on its exports. With americans share of Mexico's exports falling from 89% to 78% and expecting to get worse, mexico has a problem on their hands. At the beginning of the decade, Mexico claimed the largest Latin American economy but since has been over taken by brazil with a GDP grow to more then 2 times that of Mexico's. In 2010, the murder rate was 17 out of every 100,000 people, expected to cause a 1% drop in Mexico's annual growth rate. Foreign direct investment has fall from $30 billion to just half that over the last 5 years. With so many problems limiting Mexico’s potential, the country needs to get everything in order to to revive itself from the current recession.