You are here -allRefer - Reference - Country Study & Country Guide - Mexico >

allRefer Reference and Encyclopedia Resource

allRefer    
allRefer
   


-- Country Study & Guide --     

 

Mexico

 
Country Guide
Afghanistan
Albania
Algeria
Angola
Armenia
Austria
Azerbaijan
Bahrain
Bangladesh
Belarus
Belize
Bhutan
Bolivia
Brazil
Bulgaria
Cambodia
Chad
Chile
China
Colombia
Caribbean Islands
Comoros
Cyprus
Czechoslovakia
Dominican Republic
Ecuador
Egypt
El Salvador
Estonia
Ethiopia
Finland
Georgia
Germany
Germany (East)
Ghana
Guyana
Haiti
Honduras
Hungary
India
Indonesia
Iran
Iraq
Israel
Cote d'Ivoire
Japan
Jordan
Kazakhstan
Kuwait
Kyrgyzstan
Latvia
Laos
Lebanon
Libya
Lithuania
Macau
Madagascar
Maldives
Mauritania
Mauritius
Mexico
Moldova
Mongolia
Nepal
Nicaragua
Nigeria
North Korea
Oman
Pakistan
Panama
Paraguay
Peru
Philippines
Poland
Portugal
Qatar
Romania
Russia
Saudi Arabia
Seychelles
Singapore
Somalia
South Africa
South Korea
Soviet Union [USSR]
Spain
Sri Lanka
Sudan
Syria
Tajikistan
Thailand
Turkmenistan
Turkey
Uganda
United Arab Emirates
Uruguay
Uzbekistan
Venezuela
Vietnam
Yugoslavia
Zaire

Mexico

Foreign Investment Regulation

Restrictions on direct foreign investment were eased during the administrations of presidents de la Madrid and Salinas. In 1990 the government revised Mexico's 1973 foreign investment law, opening up to foreign investment certain sectors of the economy that previously had been restricted to Mexican nationals or to the state. The new regulations permitted up to 100 percent foreign ownership in many industries.

However, in 1992 the government continued to retain sole rights to large parts of the economy, including oil and natural gas production, uranium production and treatment, basic petrochemical production, rail transport, and electricity distribution. Economic sectors reserved for Mexican nationals included radio and television, gas distribution, forestry, road transport, and domestic sea and air transport. The government limited foreign investors to 30 percent ownership of commercial banks, 40 percent ownership of secondary petrochemical and automotive plants, and 49 percent ownership of financial services, insurance, and telecommunications enterprises. However, foreign investors could obtain majority ownership of certain activities by means of a fideicomiso , or trust.

In November 1993, the government announced a new foreign-investment law that vastly expanded foreign-investment opportunities in Mexico. The new law replaced Mexico's protectionist 1973 investment code and united numerous regulatory changes that Salinas previously had imposed by decree without congressional approval. The new law allowed foreigners to invest directly in industrial, commercial, hotel, and time-share developments along Mexico's coast and borders, although such investment had to be carried out through Mexican companies. Foreigners previously had been prohibited from owning property within fifty kilometers of Mexico's borders, and their investments in areas beyond fifty kilometers had to be carried out through bank trusts. In practice, however, foreigners already had invested in many of the listed border industries and areas through complex trust and stock ownership arrangements, although risk and bureaucratic requirements had deterred some potential investors and financiers.

The new investment code also opened the air transportation sector to 25 percent direct foreign investment and the secondary petrochemical sector to full 100 percent direct foreign investment. Mining also was opened to 100 percent direct foreign ownership; previously foreigners could provide 100 percent investment but had to invest through bank trusts for limited periods of time. Other sectors opened to foreign investors included railroad-related services, ports, farmland, courier services, and cross-border cargo transport. The new code eliminated performance requirements previously imposed upon foreign investors, along with minimum domestic content requirements.

The Future of the Economy

The market-oriented structural reforms of the 1980s and early 1990s transformed Mexico's economy from a highly protectionist, public-sector-dominated system to a generally open, deregulated "emerging market." President Salinas's moves to privatize and deregulate large sectors of the Mexican economy elicited widespread support from international investors and the advanced industrial nations. With its positive effect on trade and capital flows, NAFTA was widely interpreted by Mexican decision makers as a validation of their market-oriented economic policies. The currency collapse of December 1994 and the ensuing deep recession, however, erased the economic gains that Mexico had achieved in previous years, shook the nation's political stability, and depressed hopes for an early return to growth.

Although Mexico remained in a difficult economic condition in mid-1996, the worst of the recession had passed and the country appeared headed toward recovery. The economy registered positive growth in the second quarter of 1996, inflation and interest rates abated, and portfolio investment returned, as reflected in Mexico's rising stock exchange index. Despite continuing problems exacerbated by low investor confidence, analysts agreed that Mexico's economy in the mid-1990s was fundamentally sound and capable of long-term expansion.

* * *

Mexico's postwar economic growth and development policies are reviewed in James M. Cypher's State and Capital in Mexico , Roger Hansen's The Politics of Mexican Development , and Clark W. Reynolds's The Mexican Economy . The best examinations of Mexican economic policy during the 1970s and 1980s are John Sheahan's Conflict and Change in Mexican Economic Strategy and Nora Lustig's Mexico: The Remaking of an Economy . Denise Dresser's Neopopulist Solutions to Neoliberal Problems: Mexico's National Solidarity Program offers an in-depth analysis of the structure and political implications of Pronasol, the Salinas administration's major anti-poverty program.

The United States Department of Agriculture maintains extensive statistical data on a variety of Mexican agricultural products, and its annual reports on various crops provide detailed information on specific sectors. Among the best treatments of Mexico's agricultural policy are the volume edited by James Austin and Gustavo Esteva, Food Policy in Mexico , and Steven Sanderson's The Transformation of Mexican Agriculture . Government-business relations are examined in Roderic A. Camp's Entrepreneurs and Politics in Twentieth-Century Mexico and The Government and Private Sector in Contemporary Mexico , edited by Sylvia Maxfield and Ricardo Anzaldua.

The United States Department of Energy's International Energy Annual provides statistical data on Mexican oil production and reserves. Petroleum policy is examined in Judith Gentleman's Mexican Oil and Dependent Development and Laura Randall's The Political Economy of Mexican Oil . Among the best examinations of Mexico's international economic relations are David Barkin's Distorted Development and Van R. Whiting, Jr.'s The Political Economy of Foreign Investment in Mexico . (For further information and complete citations, see Bibliography.)

Data as of June 1996

Mexico - TABLE OF CONTENTS

  • The Economy

  • Go Up - Top of Page

    Make allRefer Reference your HomepageAdd allRefer Reference to your FavoritesGo to Top of PagePrint this PageSend this Page to a Friend


    Information Courtesy: The Library of Congress - Country Studies


    Content on this web site is provided for informational purposes only. We accept no responsibility for any loss, injury or inconvenience sustained by any person resulting from information published on this site. We encourage you to verify any critical information with the relevant authorities.

     

     

     
     


    About Us | Contact Us | Terms of Use | Privacy | Links Directory
    Link to allRefer | Add allRefer Search to your site

    ©allRefer
    All Rights reserved. Site best viewed in 800 x 600 resolution.