Background Notes, 1991

Background Notes: Mexico

PA/PC Source: Office of Public Communication, Bureau of Public Affairs Date: Sep 30, 19919/30/91 Category: Country Data Region: North America Country: Mexico Subject: Military Affairs, Cultural Exchange, Travel, History, Trade/Economics, International Organizations, North America Free Trade [TEXT] Official Name: The United Mexican States

PROFILE

Geography
Area: 1.978 million sq. km. (764,000 sq. mi.); about three times the size of Texas. Cities: Capital--Mexico City (1990 est.: pop. 20 million). Other cities--Guadalajara, Monterrey, Puebla de Zaragoza, Leon. Terrain: coastal lowlands, central high plateaus, and mountains up to 18,000 ft. Climate: Tropical to desert.
People
Nationality: Noun and adjective--Mexican(s). Population: (1990 census): 81 million. Annual growth rate: (1991 est.): 2.3%. Ethnic groups: Indian-Spanish (Mestizo) 60%, American Indian 30%, Caucasian 9%, other 1%. Religions: Roman Catholic 97%, Protestant 3%. Language: Spanish. Education: Years compulsory--10. Literacy-- 88%. Health: Infant morality rate (1991)--32/1,000. Life expectancy (1991)--72 years. Work force (26 million, 1989): Agriculture, forestry, hunting, fishing--26%. Manufacturing--13%. Commerce--14%. Services--31%. Mining and quarrying--1%. Construction--10%. Transportation and communication--5%.
Government
Type: Federal Republic. Independence: First proclaimed September 16, 1810; Republic established 1822. Constitution: February 5, 1917. Branches: Executive--President (chief of state and head of government). Legislative--bicameral. Judicial--Supreme Court, local and federal systems. Political parties: Institutional Revolutionary Party (PRI), National Action Party (PAN), Party of the Democratic Revolution (PRD), Popular Socialist Party (PPS), Authentic Party of the Mexican Revolution (PARM), Party of the Cardenist Front of National Reconstruction (PFCRN), Mexican Democratic Party (PDM), Revolutionary Workers Party (PRT), Mexican Ecology Party (PEM). Suffrage: Universal over 18. Administrative subdivisions: 31 states and a Federal District. Flag: Green, white, and red vertical bands. Centered is an eagle holding a snake in its beak and perching on a cactus.
Economy
(1990 figures) GDP: $236 billion. Per capita GDP: $3,000. Annual real GDP growth: 4%. Avg. inflation rate: 30% Natural resources: Petroleum, silver, copper, gold, lead, zinc, natural gas, timber. Agriculture: Products--corn, beans, oilseeds, feedgrains, fruit, cotton, coffee, sugarcane, winter vegetables. Industry: Types--manufacturing, services, commerce, transportation and communications, petroleum and mining. Trade (1990): Exports--$30 billion: manufacturing 52%, petroleum and derivatives 38%, agriculture 8%, other 2%. Imports--$27 billion: intermediate goods 60%, capital goods 23%, consumer goods 17%. Major trading partners--US, EC, Japan. Official exchange rate: (July 1991): 3,030 pesos =US$1 (controlled rate); 3,029 pesos = US$1 (free market rate).
International Affiliations
UN and many of its affiliate agencies, World Bank, International Monetary Fund (IMF), International Civil Aviation Organization (ICAO); General Agreement on Tariffs and Trade (GATT); Seabeds Committee; Inter-American Defense Board (IADB); Organization of American States (OAS); Latin American Integration Association (ALADI); INTELSAT.

PEOPLE

Mexico is the most populous Spanish-speaking country in the world and the second most populous country in Latin America (after Brazil). The official 1990 census put Mexico's population at 81 million, up from 29 million in 1950. About 70% of the people live in urban areas. Many Mexicans emigrate from rural areas that lack job opportunities--such as the underdeveloped southern states and the crowded central plateau--to the industrialized urban centers and the developing areas along the US-Mexico border. According to 1991 US Bureau of the Census estimates, the population of greater Mexico City is roughly 20 million, which would make it the largest urban concentration in the world. The border region has also undergone a sharp rise in population, as well as Guadalajara, Monterrey, and other cities. Education in Mexico is being decentralized and enhanced in rural areas. The increase in school enrollments during the past 2 decades has been dramatic. Education is mandatory from ages 6 through 14 or until primary education is completed. Primary enrollment from 1970 through 1989 increased from less than 10 million to nearly 15 million. In 1989, 98% of the population between the ages 6 and 14 were in school. (Latin America as a whole averages 85% enrollment.) Enrollments at the secondary level have also shot up from 1.4 million in 1972 to as many as 4.4 million by 1989. Between 1959 and 1989, enrollments in institutions of higher learning skyrocketed from 62,000 to 1,186,600. At the heart of Mexico's cultural expression are its history and quest for national identity. Contemporary artists, architects, writers, musicians, and dancers continue to draw inspiration from a rich history of Indian civilization, colonial influence, revolution, and the development of the modern Mexican state. Artists and intellectuals alike emphasize the problems of social relations in a context of national and revolutionary traditions.

HISTORY

Advanced cultures, including Olmec, Maya, Toltec, and Aztec, existed in Mexico before the Spanish conquest. Hernando Cortes conquered Mexico in 1519-21 and founded a Spanish colony that lasted nearly 300 years. Independence from Spain was proclaimed by Father Miguel Hidalgo on September 16, 1810, and the republic was established on December 6, 1822. Prominent in the War for Independence were Father Jose Maria Morelos, Gen. Augustin de Iturbide, who defeated the Spaniards and ruled as emperor for a short period, and Gen. Antonio Lopez de Santa Ana, who controlled Mexican politics from 1833 to 1855. Santa Ana was Mexico's leader during the conflict with Texas, which declared itself independent from Mexico in 1836, and during Mexico's war with the United States (1846-48). The presidential terms of the venerated Benito Juarez (1858-71) were interrupted by the Hapsburg monarchy's rule of Mexico. Archduke Maximilian of Austria, whom Napoleon III of France established as Emperor of Mexico in 1864, was deposed by Juarez and executed in 1867. Gen. Porfirio Diaz was President during most of the period between 1877 and 1910. Mexico's severe social and economic problems erupted in the revolution, lasting from 1910-1920. Prominent leaders in this-- some were rivals for power--were Francisco I. Madero, Venustiano Carranza, Pancho Villa, Alvaro Obregon, and Emiliano Zapata. The Institutional Revolutionary Party (PRI), formed in 1928 under a different name, continues to be the most important political force in the nation.

GOVERNMENT

The Constitution of 1917 provides for a federal republic with powers separated into independent executive, legislative, and judicial branches. The executive is the dominant branch, with power vested in the President, who promulgates and executes the laws of the Congress. The President also legislates by executive decree in certain economic and financial fields, using powers delegated from the Congress. The President is elected by universal adult suffrage for a 6-year term and may not hold office a second time. There is no Vice President; in the event of the removal or death of the President, a provisional president is elected by the Congress. The next presidential election will be held in August 1994. The Mexican Congress is empowered to legislate on all matters pertaining to the national government. Congress is composed of a Senate and a Chamber of Deputies. Consecutive reelection to the Congress is prohibited; 64 senators, 2 from each state and the Federal District (i.e., Mexico City), are elected to 6- year terms. Deputies serve 3-year terms. Under constitutional and legislative reforms adopted in 1986, the Chamber of Deputies was enlarged in 1988 from 400 to 500 members. In the expanded lower chamber, 300 deputies are directly elected to represent single- member districts, and 200 are selected on an at-large basis by a modified form of proportional representation. The 200 at-large seats were created to give the opposition parties more of a voice in the Chamber of Deputies. For over 60 years, Mexico's Government has been controlled by the Institutional Revolutionary Party (PRI), which has won every presidential race and most gubernatorial races. To secure its continuance in power, the PRI has over the years relied on extensive patronage and massive government and party organizational resources. Following federal elections in 1988, a total of six parties gained representation in the Chamber of Deputies and two in the Senate--the latter a first in Mexican history. The combined opposition won an unprecedented 237 seats out of a total of 500 in the lower house and 4 of 64 in the upper. In municipal elections held through December 1989, the government recognized several opposition victories by both left-of-center and right-of-center parties. In the state of Michoacan, for example, the center-left PRD won almost half of the state's municipalities, including the state's capital and most populous city, Morelia. In midterm elections held in August 1991, the PRI bounced back with a major victory. It increased its representation to 320 in the Chamber of Deputies, won numerous local and municipal offices, and, based on official figures released, appeared to have won five gubernatorial contests; one gubernatorial race will be rerun. The judiciary is divided into federal and state court systems, with federal courts having jurisdiction over most civil cases and those involving major felonies. Under the constitution, trial and sentencing must be completed within 12 months of arrest for crimes that would carry at least a 2-year sentence. Trial is by judge, not jury, in nearly all criminal cases. Defendants have a right to counsel, and public defenders are available. Other rights include defense against self-incrimination, the right to confront one's accusers, and the right to a public trial. Supreme Court justices are appointed by the President and approved by the Senate. Mexico's armed forces in 1991 numbered about 170,000 personnel. The army makes up about three-fourths of the total. One year of limited training is required of all males reaching age 18. A paramilitary force of communal landholders is maintained in the countryside. Principal military roles include narcotics control, maintenance of public order, and civic action assignments such as roadbuilding and disaster relief. Military expenditures constituted about 0.4% of GDP in 1990.
Principal Government Officials
President--Carlos SALINAS de Gortari Foreign Minister--Fernando SOLANA Morales Ambassador to the United States--Gustavo PETRICIOLI Iturbide Ambassador to the United Nations--Jorge MONTANO Martinez Ambassador to the OAS--Santiago ONATE Laborde Mexico maintains an embassy in the United States at 1911 Pennsylvania Ave. NW, Washington, DC 20006 (tel. 202-728-1600). Consular offices are located at 1019-19th Street, NW. (tel. 202- 293-1710), and the trade office is at 1776 I St. NW, 20016 (tel. 202-728-1679). Consulates general are located in Chicago, El Paso, Los Angeles, New Orleans, New York, San Francisco, and San Antonio, and consulates (partial listing) in Boston, Dallas, Detroit, Miami, Philadelphia, and St. Louis.

POLITICAL CONDITIONS

President Carlos Salinas de Gortari began his 6-year term in 1988. Salinas, holding a Harvard Ph.D., was Secretary of Programing and Budget in the de la Madrid Administration (1982-88), where he played a prominent role in formulating economic policy. Significant themes of the Salinas Administration have included adopting market-oriented economic policies, lowering inflation and reducing the foreign debt burden, pursuing a free trade agreement with the US and Canada, opening the political system, combatting narcotics trafficking, bolstering environmental protection, and curtailing corruption and human right abuse.

ECONOMY

The Mexican Government has taken bold steps in recent years to restructure the economy. Monetary and fiscal discipline and a wage/price stabilization program have reduced inflation from over 150% in 1987 to 10% for the first half of 1991. With the acceleration of market-oriented reforms, Mexico's real GDP growth rate went from 2% in 1987 to 4% in 1990. The Mexican economy has gradually decreased its dependence on petroleum exports, which accounted for 34% of 1990 exports, down from 75% in 1982. The government has taken steps to put public finance on a sound footing through privatization and deregulation of state owned companies, elimination of subsidies to inefficient industries, dramatic reduction of tariff rates, and shrinking the overall financial deficit from nearly 17% of GDP in 1987 to a projected 2% of GDP in 1991. In 1982, the Mexican Government owned 1,155 parastatal enterprises; by late 1990, the number had dropped to 452. Real short-term interest rates were down to about 9% in mid- 1991 from 30% a year earlier. In addition, in 1989 Mexico was the first country to participate in a US-sponsored plan, the "Brady Plan," to help developing countries reduce their foreign debt to foreign commercial banks. This helped reduce Mexico's debt from a high of $107 billion in 1987 to about $93 billion in 1990. This has further restored business confidence and sparked a return of expatriated capital. One of the Mexican Government's most salient initiatives is a proposed North American Free Trade Agreement (NAFTA) with the US and Canada [see box], as well as similar agreements with several Latin American neighbors. The NAFTA is part of President Bush's Enterprise for the America's Initiative, which envisions a hemispheric-wide system of free trade. Mexico's economic growth is vital to its political prospects, thus of great interest to the United States. Mexico's economy also has a substantial and direct impact on US border communities. Our close economic interrelationship is important to the stability and growth of both countries. Mexico is our third-ranked trading partner, purchasing two thirds of its imports and sending two thirds of its exports here. Chief US exports to Mexico are motor vehicle parts, office equipment, and agricultural products; top imports from Mexico include petroleum, cars, piston engines, and coffee. The US is the source of two-thirds of direct foreign investment in Mexico. Both US exports and investment have increased as Mexico has progressively opened its economy.
Agriculture
Mexico's agrarian reform program began more than 50 years ago; lands have been distributed to hitherto landless farmers. By now, almost all available land has been distributed. Raising the productivity and living standards of subsistence farmers has been slow, however, due to poor soils and a burgeoning rural population. Nevertheless, increased production of basic crops, such as corn and beans, has been stressed by the government. Emphasis is also given to export crops such as coffee, tomatoes, and winter vegetables. The government hopes to revitalize food production by extending its economic reform program to the agricultural sector. After several years of stagnant agricultural production, improved weather conditions in 1990 helped boost Mexico's production of corn, sorghum, and beans. On the other hand, rice and soybean production fell, as farmers shifted toward more profitable crops.
Minerals and Energy Resources
Mexico is rich in mineral and energy resources, and mineral exports are an important element in foreign trade. A leading producer of silver, sulfur, lead, and zinc, Mexico also produces gold, copper, manganese, coal, and iron ore. The discovery of extensive oil fields in the coastal regions along the Gulf of Mexico in 1974 enabled Mexico to become self-sufficient in crude oil and to export significant amounts. With crude oil production averaging 3 million barrels per day during 1990, Mexico ranks as the world's fifth largest oil producer. About half of the oil is refined and consumed domestically, leaving the remainder for export. Proven oil reserves total 45 billion barrels, about 7% of the world's proven reserves. Total hydrocarbon reserves, including natural gas, are estimated at 67 billion barrels.
Manufacturing and Foreign Investment
During 1990, Mexico's manufacturing sector accounted for about one-fourth of the GDP and nearly 52% of exports. It grew by 5% during that year. Important gains have been made in the production of cement, aluminum, synthetic fibers, chemicals, fertilizers, petrochemicals, and paper. A growing automobile industry has become one of Mexico's most important industrial and export sectors. Approvals for foreign investment in 1990 exceeded $4 billion, up from the 1989 total of $3 billion. The Secretariat of Commerce and Industrial Development in 1989 announced sweeping revisions of Mexico's foreign investment regulations. Among the most important of these is the explicit permission for foreigners to have majority ownership in companies. This is in effect a reversal of the intent of the 1973 Foreign Investment Law which in most cases limited foreign ownership to 49%. The government has also announced that special trust funds will be set up to liberalize foreign access to the Mexican stock market. Key sectors of the economy remain restricted to Mexicans or the state, including energy, power generation, and railroads.
Transportation and Communications
Mexico's land transportation network is one of the most extensive in Latin America. The 36,000 kilometers of railroads are government owned. Tampico and Veracruz on the Gulf of Mexico are Mexico's two major ports, although the government is developing additional ports on the Gulf of Mexico and on the Pacific as well. A number of international airlines serve Mexico, with direct or connecting flights from most major cities in the United States, Canada, Europe, and Japan. Most Mexican regional capitals and resorts have direct air links with Mexico City or the United States. The Salinas Administration is attempting to enhance transportation through modernization of infrastructure and services, deregulation and development of more efficient intermodal transport, and privatization in all sectors except as constitutionally restricted. Mexico has a well-developed telecommunications system, with its own satellites, hundreds of television stations, more than a thousand radio stations, and a number of satellite receiver stations. Mexico is a member of the International Telecommunications Satellite Consortium (INTELSAT). In 1990, the communications sector grew by 16%. A major development during that year was the privatization of the national telephone company, Telefonos de Mexico (TELMEX), with one-fifth of the shares going to private owners.

FOREIGN RELATIONS

The Government of Mexico has sought to maintain its interests abroad and project its influence largely through moral persuasion and selective economic assistance. In particular, Mexico champions the principle of non-intervention, self-determination, and certain legal corollaries--the Estrada, Calvo, and Drago doctrines. In its efforts to revitalize Mexico's economy and open it to international competition, the Salinas Administration has sought closer relations with the US, Western Europe, and the Pacific Basin. While in the past, Mexican and US policies have differed over regional conflicts in Central America, both countries agree on the ultimate goal of establishing a lasting peace and recognize that such a peace requires a redressing of the region's historic patterns of economic and social injustice. To that end, Mexico participates in a number of recent regional initiatives to promote peace, democratization, and economic development in Central America. Mexico's cooperation in world affairs has extended outside of the hemisphere. In August 1990, immediately after the Iraqi invasion of Kuwait, the Mexican Government announced that it would increase oil production capacity by 100,000 barrels a day, despite capacity restraints, to demonstrate its solidarity. Mexico actively participates in several international organizations. Although Mexico is a strong supporter of the UN system, it also pursues its interests through a number of ad hoc international bodies. Mexico has been selective in its membership in other international organizations. To date, it has declined to become a member of the Organization of Petroleum Exporting Countries and the Nonaligned Movement. Nevertheless, in 1986 Mexico acceded to the General Agreement on Tariffs and Trade (GATT).

US-MEXICAN RELATIONS

US foreign relations with Mexico are among its most important and complex. They are shaped by a mixture of mutual interests, shared problems, growing interdependence and differing national perceptions. Historical factors, cultural differences, and economic disparities add further intricacy to the relationship. The scope of US-Mexican relations goes far beyond the official contacts between each capital; it entails extensive commercial, cultural, and educational ties. Along our 2,000-mile border, state and local governments interact closely. The two countries cooperate to resolve many issues, including trade, finance, narcotics, immigration, environment, science and technology, and cultural relations. An independent, strong, and economically healthy Mexico is a fundamental US interest. Both governments actively discuss ways to improve cooperation on an array of bilateral issues. Since 1981, this process has been formalized in the US-Mexico Binational Commission, composed of several US Cabinet Members and their Mexican counterparts. The Commission holds annual plenary meetings, and many subgroups meet during the course of the year to discuss a range of topics, including trade negotiations and investment opportunities, financial cooperation, narcotics, migration, law enforcement, cultural relations, education, border cooperation, environment, labor, agriculture, housing and urban development, fisheries, and tourism. The most recent meeting was held in Mexico City September 8-9, 1991.
Principal US Embassy Officials
Ambassador--John D. Negroponte Deputy Chief of Mission--Allen L. Sessoms Counselor for Political Affairs--Theodore S. Wilkinson Counselor for Economic Affairs--Donald. F. McConville Counselor for Labor Affairs--John W. Vincent Counselor for Public Affairs (USIS)--Robert L. Earle Counselor for Consular Affairs--Patricia Langford Consul General--Jon. G. Edensword Counselor for Scientific and Technological Affairs--Ahmed Meer Counselor for Administrative Affairs--Thomas J. Fitzpatrick Counselor for Commercial Affairs--Roger Wallace The US Embassy in Mexico is located at Paseo de la Reforma 305, 06500 Mexico, DF. Telephone (from the US): 011-52-5-211- 0042. There are also US Consulates and Consulates General in Ciudad Juarez, Guadalajara, Hermosillo, Matamoros, Mazatlan, Merida, Monterrey, Nuevo Laredo, and Tijuana.
Travel Notes
Customs: Either a passport or a certified copy of a birth certificate together with a photo ID such as a driver's license is required for entry. A tourist card, obtained at the port of entry, is also required. Climate and clothing: The high plateau area around Guadalajara and Mexico City is springlike throughout the year, a bit cooler in winter, and a little warmer in summer. The Yucatan Peninsula, the Monterrey area, and the US border areas are very hot in summer and pleasant in winter. Business suits for men and street dresses or pantsuits for women are appropriate in the cities. Sport shirts are worn for all social occasions in the coastal zones. Health: Cooked food is safe to eat; raw vegetables often are not. Tapwater is usually not potable. Medical facilities in the larger cities are good. A leisurely pace is recommended for the first few days in the higher altitudes. Transportation: Direct international air service from many US airports is available to Mexico City, Cancun, Guadalajara, Merida, Monterrey, and other points. Bus service in Mexico is good. Auto rental is available.

North American Free Trade Agreement

On June 12, 1991, the governments of the United States, Canada, and Mexico began formal negotiations for an historic North American Free Trade Agreement (NAFTA). The trilateral negotiations will be an opportunity to build on the existing US- Canada agreement. The proposed NAFTA would be a catalyst for increased trade, investment, and jobs in all three countries. It would create the world's largest market, with annual production of $6 trillion and more than 360 million people. The negotiations seek a broad agreement to eliminate restrictions on the flow of goods, services, and investment among the United States, Canada, and Mexico. This includes phasing out tariffs over a period of years (the period is 10 years in the US- Canada agreement), elimination (as far as possible) of non-tariff barriers, and full protection of intellectual property rights (patents, copyrights, and trademarks). NAFTA negotiating groups cover a range of topics, including market access, services, investment, intellectual property rights, trade rules, dispute settlement, labor, and environment.
International Boundary and Water Commission
Preceded by several short-term commissions to survey and mark the boundary after its creation in 1848 and modification in 1853, the International Boundary Commission was established as a permanent joint commission by treaty in 1889. The Water Treaty of 1944 extended its authority to the land boundary and added to its responsibilities boundary water problems then becoming more important. The 1944 treaty renamed the body the International Boundary and Water Commission, United States and Mexico (IBWC). It also required that the US and Mexican commissioners be engineers. The IBWC has a wide range of responsibilities and specific programs for solution of US-Mexican water and boundary problems. These include distribution between the two countries of the waters of the Colorado River and the Rio Grande; joint operation of international dams on the Rio Grande to control floods, conserve waters, and generate electricity; other joint flood control works along boundary rivers; solution of border water quality control problems; and stabilization of the river boundaries. These responsibilities and programs are carried out in accordance with various treaties and agreements. The IBWC has successfully resolved many difficult and longstanding problems. For example, the Chamizal Settlement of 1963 resolved a 100-year-old dispute at El Paso/Ciudad Juarez by exchange of territory and rechanneling the Rio Grande. A permanent solution to the international problem related to the salinity of the Colorado River was reached in 1973. Since the early 1980s, the IBWC has focused on troublesome border sanitation problems and has been studying groundwater resources along the boundary. Published by the United States Department of State--Bureau of Public Affairs -- Office of Public Communication--Washington, DC--Series Editor: Peter Knecht(###)