Tuesday, October 1, 2019
Desert Economy Struggling To Stay Afloat Essay
When Americaââ¬â¢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, ââ¬Å"Making The Desert Bloom,â⬠brings to light the condition that Mexicoââ¬â¢s economy is currently in, restricted by cartels, monopolies and its unfortunate situation with America. When stocks plummeted and jobs were lost in america, Mexicoââ¬â¢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 doesnââ¬â¢t look promising. Mexicoââ¬â¢s unemployment rate peaked at 6.4% in 2009 and is only slowly getting better. The foundation of Mexicoââ¬â¢s economy is based on its exports. With americans share of Mexicoââ¬â¢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 Mexicoââ¬â¢s. In 2010, the murder rate was 17 out of every 100,000 people, expected to cause a 1% drop in Mexicoââ¬â¢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 Mexicoââ¬â¢s potential, the country needs to get everything in order to to revive itself from the current recession. Mexico has been hit by the steepest recession of any latin american country. A recession can be explained by a significant decline in activity across the economy effecting in industrial production, employment, income and trade. Between 2008 and 2009, 700,000 jobs were lost in Mexico. In certain parts, 4 in 10 business shut down. The head of economic planning in Mexicoââ¬â¢s fiancee ministry, Miguel Messmacher, has seen a major shift in the direction of exports out of his country. Sales to latin America and asia are growing twice as fast as those to America. Mexicoââ¬â¢s largest export is the automotive industry, although its exports to America make up only 65%. Eduardo soils head of the industryââ¬â¢s national association thinks this is a good sign because it always Mexico to establish markets in other countries, opening up more opportunities. His goal is to get it down to 50%. Others argue that Mexico can not become a ââ¬Å"commodity exporter.â⬠just because countries like china have a demand for soy beans, doesnââ¬â¢t mean that Mexico should start growing and export this product. They believe the economic future still lies in Americaââ¬â¢s economy. They way out of the recession is to gain a bigger piece of Americaââ¬â¢s slowly growing economy.
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