1. Not really, but you HAVE to pay attention.

3. A snapshot via Economic Indicators Mexico= Solid middle class nation Conclusions from chart A –CPA has gone up –Debt has risen –Inflation has been controlled

4. Continue… Chart B –Poverty has decreased in general –Gini coefficient=Mexico is less unequal but it needs to improve.

5. Continue II… Chart C –Exchange compared to the world –Third line=accumulation of foreign funds into the country net of outflow. –Deposit rate= a fee, paid on borrowed capital

7. Organization of the Economy and Government Policy Member of the OECD Predicts Mexican population=105 million 2005 76.5% of population was urban in 2005, in 2000, 74.6% population was urban

9. No Taxes = Po’ Mexicans Less than 20% of the labor force is registered with tax authorities. –OECD predicts over 43% of jobs

10. Employment Big Companies<Small Companies But more people work in big companies. Shift from agricultural work to manufacturing

11. Dirty Rich Man! Carlos Slim, example of economic extremes.

12. Financial Organization and Monetary and Foreign Exchange Policy Mexican financial system reflects economic booms and busts from the past Financial liberalization was gained by diminishing direct role of government institutions, but these institutions gained a new role.

14. Center of Mexican Moolah Bank of Mexico A.K.A. Banco de Mexico or Banxico Independent since 1993 Manages monetary, foreign exchange policy Wants= minimize inflation, maximize macroeconomic stability -Lowering inflation is the skinny jeans of economists Banxico and Financial Ministry work to set value of peso Supply and demand for peso affects its value -Banxico not so independent from the government

16. Look at all the failure! CNBV, the Insurance Commission, the Pension Funds commission still not stable, but working on it since the 1994/1995 crisis dependent on the Financial Ministry Mexican banks nationalized in 1982, privatized in 1991

17. Continuation… Mexican Stock Exchange=Bolsa. Medium business=hard to find financing Microenterprises= microcredit institutions (small loans) are different from banks. Government tries to be as transparent as possible to gain trust=more developed market in future.

19. Mexico Loves Foreigners FDI (foreign direct investing)= foreign nations bring technology, money, jobs, econ activity to Mexico. Brings $18 billion to Mexico, 16,000 foreign firms, and $210 billion in stocks.

20. People use MoneyGram, in case you don’t know. Remittances= money sent to Mexico from a foreign land to citizens. IADB (Inter-American Development Bank) estimated in 2006, remittance to Mexico= $23 billion. CONTROVERSY!

22. Trading Partners and Trade Policies NAFTA= developed b/c of close relations Mexico & USA had for years. Boomed FDI Secret economy abolished, everything became transparent and known.

23. Continued… ALADI / LAIA (Latin American Integration Association) more trade in Central America EU= negotiated free trade with Mexico. –Mexico is in two of the biggest markets in the world. –China becomes a threat after joining the WTO

24. Fiscal Policy Fiscal Policy= government spending/revenues, needs reforms Should be counter cyclical (economy) economists say –Spend money/cut taxes in bad times – decrease gov. spending when economy is good b/c of the private sector.

25. Continued… Income tax and value added sales tax and Pemex (Petroleos Mexicanos) revenues=gov. revenue –Mexico is subject to Pemex’s ups and downs since most revenue comes from it, though not a lot. –informal economy=weak tax system

26. Continued II… Mexico’s president, Felipe Calderon, wants to but cannot privatize oil b/c it is protected in the Mexican constitution. Lack of oil=lack of money

27. Mexico’s New Econ Policies Budgetary stabilized plan= revenues from high oil prices are saved for future counter spending cycles. –Used to stimulate economy in hard times –It is working for Mexico and economy is getting better

28. Continued… Oportunidades or Progresa –Money is spent on needy if they follow rules ex. Immunizing children, taking them to school

29. Just Small Details Immigration in the North NAFTA Pollution

30. YOU ARE FREE FROM THE ECONOMICS MONSTER!

31. For now …