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Busines and Economy of Mexico

Mexico is a developing nation with an essentially healthy economy. Although burdened by debt and inflation, market-oriented reforms and minimal government interference are steering the economy. Large-scale exports and the indigenous production of most of Mexico’s own requirements are supporting the system. Petroleum, mining, manufacturing, textiles, electronics and tourism are well developed and promote the economy.

Till the mid-1900s, agriculture and mining drove the economy. The government promoted industry from the 1940s and Mexico now produces most of its own goods.

The manufacturing and service industries received a tremendous boost in the 1970s with the export of large quantities of oil to the United States. This was a short-lived period of rapid economic progress under the oil-based economy. With skyrocketing oil prices, Mexico decided to cash in on expected income and indulged in heavy borrowing for construction projects. When oil prices crashed in the 1980s, however, the economy declined and unemployment became widespread. The country is still burdened by debt and a slow economy, conditions that worsened in the aftermath of a devastating earthquake.

The manufacturing industry has been financed mainly by Mexico’s business community, with contributions from government and foreign investors. Mexico City is the chief industrial centre, which produces about 50% of the nation’s goods. Guadalajara and Monterrey follow on the production line. The country produces chemicals, clothing, iron and steel, motor vehicles, processed foods, processed petroleum, beer, cement, electrical machinery, fertilisers, household appliances, rubber, wood pulp and paper.

Agriculture is centered chiefly on producing corn, the Mexican staple. A large variety of crops are grown in Mexico because of the tremendous variations in climate, rainfall, altitude and temperature. The rich soils of the plateaus of Southern Mexico are ideal for farming. But large tracts of the rugged mountains are uncultivable and receive no rainfall.

The large farming estates or haciendas of the 19th century have now been distributed among the peasants. The haciendas have given way to the Ejidos, which are farmlands held commonly by the community. Agriculture in Mexico provides 28% of all jobs, but accounts for only 8% of the goods and services of the country. This leaves farmers in utter poverty and there is a sharp disparity in rural and urban living standards.

The mining industry remains important to Mexico’s economy. About one-sixth of the world’s silver is mined in Mexico, as is a large amount of petroleum, natural gas and iron ore.

Mexico trades chiefly with the United States, but trade with West Europe and Japan is increasing. The liberalisation of Mexico’s trade policies and the crackdown on drug trafficking should have a positive impact on the economy.

Business Guide

Mexico has a basically sound economy and provides a good environment for trade, investment and collaborations. It’s a good idea to do your homework about the country’s business dealings. Remember that there are cultural differences that you should respect. Here are a few tips to help you in your business dealings:

• Introductions, salutations and greetings must be polite and personal, with a handshake and an inquiry about the family. Use titles and degrees when addressing.

• Mexicans do not expect you to be on time, especially for social occasions. When extending invitations, it is insulting to mention departure time.

• Business etiquette requires you to be courteous and respectful of your colleagues in public. It’s polite to talk about the family to establish rapport, or dwell on the weather and fashion.

• Mexicans do stand closer to each other while communicating. Light gestures such as a pat or touch of the arm are acceptable.

• Take a gift and remember to send a thank you note when invited to an associate’s home for a meal.

• Do be “patient, persistent and prepared.”

• Mexicans are status conscious and you must respect power hierarchies.

• You need to establish personal contact rather than make a phone call to do business.

• Be prepared to invest time.

• Be prepared for “wining and dining”, dropping names.

Banking hours are Mon-Fri 0900-1600. Some banks are open longer hours and others are open on Saturday afternoons.

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