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MEXICO
>> Regional Overview >> Mexico Overview 
Introduction
Mexico is a central foreign policy interest to the United States. Our 2,000-mile shared border creates an unusually wide variety of problems and sensitive political issues, which directly affect U.S. citizens. The two countries are economically interdependent. Under NAFTA, trade with Mexico has grown to account for almost 10% of all U.S. exports. The United States is Mexico's predominant trading partner, accounting for $79 billion in imports. The complex United States-Mexico bilateral relationship requires collaborative sustainable development responses to shared problems. In addition, lessons learned from joint development activities have value that extends beyond Mexico's borders. USAID has launched a new program, with collaboration from Mexico, that transfers the best models of development to Central America and other regions.
The U.S. has a direct and vital interest in Mexico's political and economic stability; its ability to control illegal drugs and related crime; protection of Mexico's natural resources; and the health and economic well-being of its people. USAID's programs directly address these major issues of U.S. foreign policy.
The Development Challenge
Although Mexico is recovering in macro-economic terms from the 1995 peso crash and the 1998 Asia economic crisis, its poverty levels and income distribution have worsened. Since 1995, there has been an estimated 60% drop in real wages. Around half of Mexico's 100 million people are now estimated to be living below the poverty line. The banking crisis that began in 1995 continues to constrain Mexico's ability to finance its own growth.
Mexico's economy cannot generate enough new jobs for its growing workforce. The informal (unsalaried) economy has grown at least 30% since 1995, suggesting that microenterprise is now an important source of employment and income for a significant proportion of Mexico's poor. A strong microenterprise sector could help create jobs and income needed to reduce the economic pressures which drive increasing migration to other countries, particularly the U.S. However, lack of strong institutional support severely constrains the growth potential of the microenterprise sector.
Mexico is experiencing fundamental democratic change, as evidenced in free and fair elections and the continued decentralization of governing authority from the federal to local levels. USAID supports Mexican initiatives in the areas of justice, local governance and legislative strengthening.
Deforestation and environmental degradation rates in Mexico are among the world's highest. USAID supports Mexican programs to protect biodiversity and critical ecosystems. This includes a special joint effort to address the causes and prevention of wildfires which caused massive loss of Mexico's forested land, and sent smoke pollution across the U.S. border in 1998.
As one of the world's top greenhouse gas emitters, Mexico is a high priority for the U.S. Government's (USG) Global Climate Change mitigation policies. The manufacturing sector is raising demand for energy faster than Mexico can meet it. However, public policies do not yet encourage efficient energy use. USAID is promoting widespread adoption and replication of economically viable renewable energy systems, as well as energy efficient, non-polluting technologies for industries, municipalities and agriculture.
Under the Government of Mexico's decentralization policy, the burden of planning and funding health programs has devolved to the states. USAID's HIV/AIDS program works with both the national and state-level governments, as well as non-governmental organizations (NGOs), to help create policies which address the growing HIV/AIDS problem cost-effectively; and to support strategic planning in priority states.
USAID's recently approved tuberculosis (TB) strategy responds to USG and GOM concern over the growing incidence of TB, particularly along the border. This program works at the Federal and State levels to promote improved planning, coordination, and increased use of modern technologies for TB detection, diagnosis and treatment in Mexico's decentralized health system. U.S. NGOs will complement GOM TB programs along the border.
Other Donors
The largest bilateral donor in Mexico is Japan, followed by Germany, Spain, France and the United. States. The World Bank and Inter-American Development Bank (IDB) together contribute about $1 billion annually to the Mexican economy. These funds are channeled to the budgets of various Mexican Government ministries to support poverty alleviation and social services. The Government of Mexico does not encourage direct donor collaboration. However, many of the models designed and tested by USAID (especially in environment and energy) have been replicated on a larger scale by GOM ministries, using either government funds or multilateral development bank funding. USAID is working actively to leverage other bilateral donor funds. For example, discussions are underway with the Japanese and the Italians to support HIV/AIDS programs at the State level, complementing existing USAID activities. Specific program collaboration has already been achieved with Japan for the USAID funded Parks in Peril program. USAID will build on experience and lessons learned from World Bank and IDB projects in order to carry out its new microenterprise strategy. In spite of the program's relatively small dollar size, USAID plays a highly effective leadership role among donors in catalyzing development change.
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: December 21, 2000 |
