Growth And Development Of The Economy In Mexico

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Growth and development of the economy in Mexico

Introduction

Foreign investment in Mexico has had an important growth since the nineties to a large extent as a result of the Mexican State’s decision to adopt a series of commercial opening structural policies, economic integration with other regions of the world and macroeconomic stability policies. Additionally there have been few relevant steps that affect the climate or favorable environment for both foreign and national productive investment. Such as the development of a deregulation and more recent competence policy regarding transparency and access to information among others.

As part of the economic integration processes in which Mexico has been actively inserted since the late eighties, it has been in this regard to adopt processes of commercial and investment integration together. From the legal point of view, through a significant number of international treaties, Mexico has incorporated as a mechanism to resolve conflicts that derive from these obligations. One of the least analyzed aspects of integration processes has been that of the punctual analysis of the disciplines and criteria for treatment of foreign investment and their relationship with the climate of productive investments as government policy.

It is important to emphasize that this process of change was not exclusive to Mexico, but rather registered within major transformation currents related to the globalization of the economy and a reorientation of the role of the State that was common with its own nuances in each country, under conditions under conditionsof global paradigms of democracy, market and rule of law.

Developing

  • Why is it good for companies to invest in Mexico?

Mexico has become a country, with more attractive for foreign direct investment, due to the positive characteristics of the country;and the benefits it brings to the economy for investment entry.

Some characteristics is the geographical location, because Mexico located next to the first world economy, which interests investors is to make negotiations more accessible in addition to having the advantage of being able to provide in just time and have the possibilities of making transactionseconomic.

Mexico has an extensive variety of natural resources, how are the land and climate conducive to the promotion of all types of industries, since there are materials such as oil, minerals, agricultural products, etc. that would represent a lower cost of raw material for the production of products, also has resources that help the promotion of tourism industry such as archaeological zones, mountains, jungle, deserts, etc.

It is interesting that the workforce that is counted in our country is cheap that n most developed countries. It is important to mention that how Mexico has a young and relatively trained population is what makes production costs lower and more competitive, there is a favorable work environment, because in recent decades it was Mexico qualified as the bestdestination for the placement of foreign capital, since 500 main companies in Latin America have been established, they have established their operations in Mexico, at the same time. It is benefited by having the most extensive network of FTA free trade agreements, which ensure access to the markets of North America, European Union, the countries of the European Free Trade Association, Israel and ten countries partner of Latin America betweenothers. Because preferential tariff fees are negotiated in free trade agreements for the importation of products from countries.

Mexico grants legal security and protection to foreign investors through agreements for reciprocal promotion and protection for investments, of which our country has signed with twenty countries. The Mexican government has promoted transparency in its actions, respect for the rule of law and the application of the law, resulting in a stable environment favorable for business.

It is important to mention the advantages that Mexico obtains by admitting foreign direct investment.

Mexico benefits from admitting direct investment from other countries, above all, the technological, economic and knowledge spill that enters the country, will achieve greater comprehension of trade, giving an impulse to a more competitive business environment contributing to economic growth to economic growth.

The strictly economic benefits can help improve the environment as well as the social and labor conditions of the region where this investment is located, with this investment, the country also acquires a better attitude towards the work obtained from the new culture that enters withThe investment of foreign companies.

  • Why do foreign companies look for other countries to manufacture their products?

One of the main reasons is that countries lookCommercial preferences of free trade agreements that serve for companies can overcome barriers to trade such as tariffs or to physically approach their target market, thus reducing logistics and transportation costs.

Regarding services in the services sector. EE companies.The UU, sometimes they choose to resocialize their customer service operations and establish administrative process centers in other countries to reduce costs and offer a culturally closer service to their customers and the wets of the North American market.

A company will always seek efficiency, companies invest in several locations so that each product is manufactured where there is better value for money. This is known as vertical investment. For example, Volkswagen is based in Germany, but produces and assembles cars in various parts of the world to reduce costs, but also to access the entire North American market thanks to the treaty of free trade from its plants in the Mexican states of Pueblaand Tlaxcala.

Another reason why companies seek to invest in other countries is that they are usually lookingof life etc.

  • What do you think are the disadvantages of foreign investment?

A disadvantage is that the job positions of those companies that invest are for the citizens of the country of investment origin, for example: the five -star Grand Tourism Hotel Managers are from the country that investing.

Although most governments presume the enormous volume of direct investment that reach their countries, this investment is a sample of inability of local entrepreneurs to generate their own businesses that allow them to allow them and provide goods and services to the inhabitants of the inhabitants of theregion.

Frequently they carry their own management teams, they use unqualified workers for production, their income and the size of the companies allows them to exercise too much international influence on the political decisions adopted in institutions such as WTOs. Foreign companies are where pollution legislation is not effective and therefore are able to reduce their private costs, with the creation of external costs. Foreign companies can be installed in countries where laws are weak or almost allowing local workers through salary levels and poor working conditions.

  • Do you know a foreign company or factory that has production in Mexico?

The dynamics of resistance and social response to face the mastery of capital over life on the planet have been reproducing, in fact, since the large corporations, at first American and, later European and Asian, dedicated themselves to expanding their operations toother countries to deepen its growth and accumulation logic.

It can be said that there is a connection of the struggles of the labor movement, with their claims for improvements in working conditions and in the distribution of business benefits, with which today it has protagonists for example, resistance campaigns that throughout the last centuryThey were made against companies such as United-Fruit- today Chiquita Brands, Nestlé, Shell, Nike or McDonald’s and that today take place in front of transnationals such as Telefónica, Coca-Cola, Chevron-Taxco and Repsol.

McDonalds, Coca-Cola, KFC, Pizza Hut, Burger King, Mattel, Fisher Price, Walt Disney, Universal, WB, IBM, HP, Intel, Gogle, Microsort, Goodyear, Micheline,

  • What is and what products do you make?

Its objective of having many companies in the market is that monopylic policies are not practiced.

  1. We have Coca-Cola and Pesi, they make soft drinks and a product line.
  2. Domino’s Pizza, McDonald´s and Pizza Hut;They make hamburgers
  3. DHL and Fedex.- Messaging companies.
  • How do you think this company contributes to Mexico’s economy?

Mexico’s economy is based on the free market, export -oriented. The largest economy in Latin America, Latin America, larger economies of Oda America only after the US. UU and Brazil.

Due to the exchange rate, corporations have granted investment degrees to the sovereign debt of Mexico.

Despite its macroeconomic stability that has reduced inflation and minimum historical interest rates and that has increased per capita income, there are gaps between rich and poor, the northern states and those of the south, and among the rural population. Some challenges for Mexico are to modernize the tax system and labor laws as well as reduce income inequality.

Since the economy is a mixture of modern and ancient agricultural industries and systems, both called each time by the private sector, recent governments have expanded competition in maritime ports, telecommunications. The generation of electricity, the distribution of natural gas to modernize infrastructure, is an export -oriented economy, with a foreign trade regulated in free trade agreements, with more than 40 countries. Mexico with its American partners represented 90% of its exports and 55% imports.

The investment summit happens in Mexico City, covering the opportunities and challenges of development and investment through private capital, entrepreneurial capital, infrastructure, real estate, agriculture, tourism, energy and natural resources

Mexico is the tenth largest export economy in the most complex world according to the economic complexity index

Mexico will seek greater growth rate, increase infrastructure investments spending, implement policies aimed at savings and allow a better allocation of resources in the economy, carry out an allocation of the combination of production factors a better allocation of resources in resources in resources inThe economy, carrying out a more efficient allocation of resources, a greater return on investment and greater efficiency in the combination of production factors, promoted through the strategy of participation, the reduction of violence, thefight against corruption and in general the strengthening of the rule of law, boost the development of human capital of young people.

conclusion

One of the most important consequences of the change of economic model was the process of integration to the international economic system and, in particular, that of the American continent. In this process Mexico determined to play a very active role that sought to make the most of its competitive advantages and develop a strategy that would position it as an attractive place for international investment and trade.

As for the destination of the FDI, it also concentrates on developed countries. UNCTAD data estimates that in 2000 only 33% of FDI flows were destined for developing countries.25 of that percentage, 70.4% concentrated in ten countries, of which only 3 were Latin Americans (Brazil 10%, Mexico 4.6 and Argentina on 3.7%). It is particularly important to notice the spectacular growth of the IED percentage received by the countries of Asia, which grew from 21% in 1975 to 64% in 2000 (China received on its own the 17.5%). Thus, given the growing demand for capital and relative shortage in the international system, we attend intense competition between developing countries for attracting FDI flows. Table 2 (see on a posterior page) shows this situation.

The relative importance of FDI in the economy of receiving countries varies from one to another. One way to measure it is to compare it with the GDP of the country in question. A general tendency in all countries is the significant increase in its relative importance in national economies. Table 3 (see next page) clearly shows this situation. In the particular case of Mexico, for 1999 direct foreign investment represented the 16.4% of the gross domestic product.  

Free Growth And Development Of The Economy In Mexico Essay Sample

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