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International Business Management

Joby Chen - Eric Shih - Pauline Klieber - Caroline Himadewi Santoso - Chang-Lien C

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Economic History Timeline [1]

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Economic History Timeline [1]

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Economic History Timeline

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Economic History GDP [1]

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Economic History GDP [1]

GDP annual growth rate - in percentages

Year Mexico World

1991 4.2 1.0

1992 3.6 1.3

1993 2.0 1.2

1994 4.4 3.0

1995 -6.2 2.9

1996 5.2 3.2

1997 6.8 3.5

1998 4.9 2.1

1999 3.9 3.2

2000 6.6 4.3

2001 -0.2 1.6

2002 0.8 2.0

2003 1.7 2.7

2004 4.0 4.0

2005 3.2 3.42006 4.9 3.9

2007 3.3 3.9

2008 1.5 1.8

2009 -6.5 -2.0

n.a.: non-available

Source: CEI based on national sources and IMF.

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Economic History GDP [1]

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Financial crisis in 1982 [2]

1.Oil problem

2.Neglect agricultural

3.Expand the money supply

3.International interest rate increase

Finally, the GDP fell from average 6.7 to average

1 by the end of the 1982. Its also one of themost seious economy crisis in Mexicos history.

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Mexican peso crisis in 1994 [3]

Political Instability :

Assassination of Donaldo Colosio, thepresident candidate of PRI.

Armed rebellion in Chiapas region. kidnappingof numerous executives and anotherassassination of a PRI leader heightened the

political tension Instability made foreign investors worry.

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Mexican peso crisis in 1994

Fixed Exchange Rate (Under Carlos Salinas

government)

Mexican government maintain a fixed exchange

rate between peso and dollar to ensure theforeign investor and to fight against inflation byusing foreign exchange reserve.

Result in over-estimation on value of peso

and increase in import.

Current Account Deficit increase from 4.1billion in 1989 to 28.9 billion in1994.

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Mexican peso crisis in 1994

Run out of dollar reserve and had to devaluatepeso by 15% on December 1994. Whichalarmed the investor and triggered a run on

the currency (Sell peso, buy dollar). A viciouscycle that further decrease Mexicos Foreign

exchange reserves.

Eventually peso devalued by 42.17% on thethird day of depreciation announcement

US provided loans and guarantees to Mexicototaled almost $50 billion

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Economic Strategy

Join NAFTA 1994

Partnership with EU in 2000

"EU-Mexico Economic Partnership, PoliticalCoordination and Cooperation Agreement

Join OECD in 1994 Organization forEconomic Co-operation and Development

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(North American Free Trade

Agreement)[4]

Membership: Mexico, U.S. ,Canada

Goal: To eliminate barriers to trade betweenMexico, U.S. ,and Canada.

Agriculture: A controversial

issue within NAFTA.

Influence on Mexico Farmer:

The farmer in Mexico against

the U.S. government subsidies

to the corn sector.

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EU-Mexico Economic Partnership [5]

Political Coordination and CooperationAgreement

Social cohesion, to reduce poverty, inequality and

exclusion. Strengthening of the competitiveness and

deepening of the free trade area with the EU, inorder to support Mexicos economic development.

Education and culture, in order to strengthen anddeepen the cultural links between the EU andMexico with mutual benefit.

Technological and scientific cooperation.

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Mexico and the OECD [6]

Financing the MDGs (Millennium Development Goals) Official

development assistance (ODA) is a necessary and complementarysource of finance for development

Building a global partnership for development

Supporting strategic areas of progress

Economic growth and social protection

Conflict and fragility

Gender equality and womens empowerment : investing in womanand girls

Improving health outcomes

Climate change and development : finance climate changes

Improving domestic resource mobilisation

Organisation forEconomic Co-operation and Development : international economicorganization stimulate economic progress and world trade

18th of May 1994

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Human Development Index

Country 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011.. Very high

human

development0.766 0.786 0.810 0.834 0.858 0.876 0.879 0.882 0.885 0.885 0.888 0.889

.. High humandevelopment

0.614 0.630 0.648 0.662 0.687 0.716 0.721 0.728 0.733 0.734 0.739 0.741.. Medium human

development0.420 0.450 0.480 0.517 0.548 0.587 0.595 0.605 0.612 0.618 0.625 0.630

..

Low humandevelopment 0.316

0.334

0.347

0.363

0.383

0.422

0.430

0.437

0.443

0.448

0.453

0.456

57 Mexico 0.593 0.629 0.649 0.674 0.718 0.741 0.748 0.755 0.761 0.762 0.767 0.770

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Energy Consumption & Reserved [7]

Mexico is a major non-OPEC oil producer, withone of the world's largest oil companies, Pemex.

Mexico is one of the top three sources of U.S. oilimports.

Mexicos natural gas consumption is risingprimarily due to greater use of the fuel in powergeneration.

Most of Mexicos electricity generation comesfrom conventional thermal sources, chiefly natural

gas.

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Petroleum Consumption & Reserved

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Petroleum Consumption & Reserved

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Natural Gas Consumption & Reserved

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Natural Gas Consumption & Reserved

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Electricity Consumption

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Coal Consumption & Reserved

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Coal Consumption & Reserved

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Can Mexico become richer?

3 economic pillars : oil production ( 10th largest producer), industrial sector(new technologies, automobileindustry, heavy industry and agribusiness) , tertiary sector(Tourism)

Tourism : 2010: 10th place in the world, with 22.4 million visitors

plans to climb the 5th step of the podium.

2011: 190 million tourists

Head of the G20 in November 2011

Barack Obama wants number of illegal immigrants in USA to go down help with economic development ofMexico

Last 10 years reduced public debt under non-PRI party (starting from 2000) : the most touched by 2009 crisis

14th biggest economy in the world (2nd

after Brazil in Latin America)

2012 : 1st exporter in Latin America, 40% of the total traffic

Part of OECD, NAFTA and partnership with UE

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References (not in alphabetical order)

1. Santaella, Julio. December 1998. Economic Growth in Mexico. Viewed onOctober,3rd 2012. Retrieved from http://www.iadb.org/regions/re2/santafin.pdf.

2. Wikipediahttp://en.wikipedia.org/wiki/Economic_history_of_Mexico#1982_crisis_and_recovery

3. MBALIB http://wiki.mbalib.com/zh-tw/%E5%A2%A8%E8%A5%BF%E5%93%A5%E9%87%91%E8%9E%8D%E5%8D%B1

%E6%9C%BA4. http://www.imf.org/external/pubs/ft/fandd/2005/12/schipke.htm

5. http://eeas.europa.eu/mexico/csp/07_13_en.pdf

6. http://www.oecd.org/mexico/mexicoandtheoecd.htm

7. http://www.eia.gov/countries/country-data.cfm?fips=MX

8. http://lecercle.lesechos.fr/economie-societe/international/ameriques/221139689/mexique-

futur-grand-meconnu9. http://www.revemexicain.com/economie_mexique.php

10. http://www.nationsencyclopedia.com/Americas/Mexico-ECONOMIC-DEVELOPMENT.html

11. http://www.economywatch.com/economic-development/mexico.html

12. http://www.diplomatie.gouv.fr/fr/pays-zones-geo/mexique/presentation-du-mexique/

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Thank you for your attention !