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Mexico. Political System, Society, History, Economy and Obstacles to Economic Growth

by Thomas Werner (Author) Patrick Stalmach (Author)

Term Paper 2017 22 Pages

Business economics - Economic Policy

Excerpt

Table of Content

1. Introduction

2. Overview

3. History

4. Political System

5. Society

6. Economic growth

7. Obstacles for the economic growth

8. Conclusion

Bibliography

1. Introduction

Mexico, the second largest economy in Latin America, finds itself confronted with several internal and external issues. In the prior year, the country experienced a decline of the economic growth. Major reasons are on the one hand, the uncertain future after the presidential election of Donald Trump, as well as the decreasing industrial production of the main trade partner, the USA. In consequence, the oil price fell, and the Mexican currency lost 20% of their value. On the other hand, the domestic market is strongly influenced by misallocation of educational funds, failed reforms, which increased the income inequality and organized crime. This essay will reflect briefly on these topics, to give a short overview of the country`s economic background and the current situation. Furthermore, certain information about society, history and the political system will be provided to allow the reader a full insight into these connected topics.

2. Overview

Mexico is a constitutional republic in North America, even though depending on the definition a part of the country (ca. 12%) geographically belongs to Central America. It has borders to the United States in the north and to Belize and Guatemala in the south and access to the Caribbean Sea and the Gulf of Mexico in the east and to the Pacific Ocean in the west. The area is about 1.96 millionkm², which is more than five times the size of Germany. Mexico has the second-largest economy in Latin America and among the Spanish speaking countries it is the one with the highest population, with approximately 124.6 million people. It is made up of 31 states and 1 Federal District (Mexico City), which is also the capital and with a population of more than 20 million inhabitants it is listed on the 12th place of the highest populous cities worldwide. The official currency is the Mexican Peso (MXN).[1]

Mexico has various climate zones, in the north you will find a desert environment, in the center of the country there is a mix of a temperate and a semi-arid climate and the more you go to the south-east the more tropical the climate gets. Because approximately half of the country is located south of the Tropic of Cancer, Mexico has the ability to grow tropical fruits and vegetables nearly year-round. The rainforest of the country is also home to some of the world's most diverse species of fauna and flora.

Great tourism possibilities are provided by Mexico as well, beneath the crystal blue waters of the of the Caribbean and Pacific Sea with its white sand beaches, the ancient Aztec and Mayan ruins present visitors with an enriching historical experience. Hikers and adventure seekers will find their place in the volcanic mountains and forested jungle terrain.[2]

3. History

The Mayans, widely considered to be pre-Columbian America’s most brilliant civilization, thrived between approximately 250 and 900 A.D. They developed a calendar and writing system and they are also known for its art, architecture, mathematics and astronomical system. They were domiciled in Guatemala, Honduras, Belize, El Salvador, but the majority could be found in the south of Mexico. The Mayan civilization collapsed in the early 10th century, likely due to overpopulation and the resultant damage to the ecological balance. The Aztecs, the last of pre-Columbian Mexico’s great native civilizations, captured the central valley of Mexico around 1427 by partnering with the Toltecs, another Mesoamerican culture, and Mayans. This triple alliance conquered smaller cultures to the east and west until the Aztec empire extended their domination in Mexico from the Pacific Ocean to the Gulf Coast. At their height, the Aztecs ruled 5 million people. The word Azteca is derived from Aztlán, which was the name of the area the Aztecs lived.[3]

The Spanish conquest of the Aztec Empire began in February 1519.Spaniard Hernán Cortés arrived at Veracruz and believing that Cortés might be the serpent god Quetzalcoatl, Aztec King Moctezuma II invited the conquistador to Tenochtitlán, which was the capital of the Aztec Empire. This gesture proved disastrous because Cortés formed many allies on his way to the city. In May 1521, Cortez and his followers attacked and conquered the Aztecs. Cortés then colonized the area and named it Nueva España (New Spain). By 1574, Spain controlled a large portion of the Aztec empire and had enslaved most of the indigenous population. Also diseases were brought into the society by the Spaniards, which devastated the indigenous population of Nueva España, killing an estimated 24 million people between 1521 and 1605.[4]

During this rough time, colonists in Nueva España who had been born in Spain (peninsulares) clashed with Spaniards who had been born in Mexico (criollos). Many criollos had become rich and wanted equal political power, which now resided with the peninsulares. Spain’s influence on Nueva España was weakened through Napoleón Bonaparte’s occupation of Spain in 1808 because the country’s political and economic structure was compromised.

The most meaningful date in Mexican history, which is now celebrated as Mexican Independence Day, is the 16. September 1810. This day the most important local revolt was started by Miguel Hidalgo y Costilla (also known as Miguel Hidalgo), a parish priest in Dolores. Hidalgo issued the “Grito de Dolores” (“Cry of Dolores”), calling for the end of rule by Spanish peninsulars, for equality of races, and for redistribution of land. The movement for independence was inspired by the American and French Revolutions. Within the first year of the revolt, Hidalgo was captured and killed, but the war continued for the next 11 years to a victorious conclusion for the Mexicans. The Declaration of Independence of the Mexican Empire was finally declared on September 28, 1821. But Mexico still continued to be characterized by considerable instability and only two decades later another international conflict broke out in 1846. The Mexican-American war between the United States and Mexico (April 1846–February 1848) resulting from the United States’ annexation of Texas in 1845 and from a dispute over whether Texas ended at the Nueces River (Mexican claim) or the Rio Grande (U.S. claim). The result of the war was that the United States’ acquired more than 1,300,000 square km of Mexican territory.[5]

In the following years the state was marked by unbalanced distribution of wealth and power and by the long-standing dictatorship of Porfirio Diaz who was in power since 1876. The Mexican people, who were tired of this, initiated the Mexican Revolution in 1910.The 10-year civil war resulted in at least 2 million victims. One of the main achievements of the Mexican Revolution was the publication of a new constitution in February 1917. The drafters of the new Constitution took aim against those Mexicans living in luxury abroad while their estates in Mexico became degenerated. Finally, in 1934, Lázaro Cárdenas became president and reestablished the ancient ejido system, which established communally shared tracts of farmland. The system benefited both the citizens and the economy. The Mexican Revolution ended in 1940.World War II brought profound changes to Mexico. Its basic economic structure was transformed, through the development of roads, the building of factories and the establishment of irrigation systems.[6]

In recent years, the building of foreign-owned factories and plants in some of Mexico’s rural areas has helped draw the population away from Mexico City and redistribute some of the country’s wealth. The financial system was strengthened through the North American Free Trade Agreement (NAFTA) of 1994, by increasing Mexico’s financial ties to the United States and Canada, but the Mexican economy remains fragile. Despite its problems, the Mexican economy, with its growing industrial base, abundant natural resources and variety of service industries, remains highly important to Latin America.[7]

4. Political System

The federal republic of Mexico, which is based on presidential democracy, had several constitutions since it achieved its independence in 1821. Today the political system is built on the constitution of 1917, which composes the economic and political principles for the country.[8] The federal government is divided into the executive, legislative and judicial branch.

The executive power is represented by the president. He is the head of the government and the head of the state. Furthermore, he is the Supreme Commander of the military with the right to put his veto against bills. In addition, the president has the authority to entitle the attorney general, diplomats, high-ranking military officers and the Supreme Court justices. This powerful office is elected by popular vote for a six-year term and cannot be reelected. The current political leader is Enrique Peña Nieto, who was aligned in December 2012 and will be in the office until the next presidential elections in June 2018. He is a member of the party PRI (Institutional Revolutionary Party).[9] Mexico does not have a vice-president. Because of this lack, the constitution includes a process which states, that in case of death or incapacity of the president, the legislature chooses a provisional successor.[10]

The legislative branch is made of an upper house, the Senate and the lower house, the Chamber of Deputies. Formerly, the Chamber of Deputies consisted of 178 congressional districts. Today it counts a total number of 500 seats, which causes controversial discussions in the society. Like the president, the Senators are elected for a six-year term and the deputies for a period of three years. All members of the legislature cannot be reelected for the immediately succeeding term but may serve for nonconsecutive terms. This bicameral Congress of the Union is in charge of making federal law, declaring war, imposing taxes, approving national budget and international treaties and ratifying diplomatic appointments.[11]

The judicial system includes various courts, which are supervised by the Supreme Court of Justice. Their members are appointed by the president and approved by the congress. Even though there are federal courts as well as state courts, cases of high importance are held in federal courts by judges without the assistance of juries. Corresponding to the law, the defendants have different rights to guarantee fair trials and human treatment. Nevertheless, in practice, there are a lot of issues. Despite the efforts of some politicians to fight against fraud, theft and other violations of the law, most of the Mexicans do not have a strong confidence in the jurisdiction. Consequently, a lot of crimes remain unreported. Furthermore, especially indigenous and poor defendants experience often arbitrary arrests and detentions. Many of them are hold for long periods in prisons before their trials or sentencing. These overcrowded prisons are usually in poorly conditions, as there is a lot of corruption and abuses of different kinds.[12]

Mexico has a multi-party system. As the result of a shift to democratic pluralism, the center of the power drifted from the executive to the legislative division, establishing three main forces. The Institutional Revolutionary Party (PRI) positions itself as center/center-left. It is the oldest political party in Mexico. They ruled for seven consecutive decades and regained the power within the last elections in 2012 with the current president Enrique Peña Nieto. The National Action Party (PAN) is a liberal conservative party with a center-right-orientation. Another significant opposition party is the socialistic Party of the Democratic Revolution (PRD).[13]

One important principle is that the political leaders are only able to rule for a period of six years. This regulation was established to avoid, that a few persons can govern a country for decades, as often seen in the Asian or African countries. Nevertheless, there is also the risk, that politicians might abuse this regulation since they will not face re-election. In consequence, the deputies often tend to seek as much as possible from the system for their personal interest, which has a negative impact on their political decisions.[14]

In the last years Mexico has shown itself competent in altering the political formation through competitive elections. However, the country is still in a procedure of democratic consolidation, with much work to do, in order to get rid of bribery and corruption and obtain complete liability and transparency.

[...]


[1] German Foreign Federal Office 2017

[2] Zhou 2017

[3] Griffin 2017

[4] Encyclopedia History 2017

[5] Griffin 2017

[6] Smitha 2014

[7] Griffin 2017

[8] Griffin 2017

[9] Santander TradePortal 2017

[10] Griffin 2017

[11] Darlington 2016

[12] Griffin 2017

[13] Santander TradePortal 2017

[14] Darlington 2016

Details

Pages
22
Year
2017
ISBN (eBook)
9783668721227
ISBN (Book)
9783668721234
File size
555 KB
Language
English
Catalog Number
v428162
Institution / College
Schmalkalden University of Applied Sciences
Grade
1,3
Tags
Mexico Economy Latin America Hispanic America Business OBSTACLES to economic growth

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Title: Mexico. Political System, Society, History, Economy and Obstacles to Economic Growth