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PowerPoint Presentations OF THE FOLLOWING PROJECT

Course Project



Based on is a recent development, For a long time, was controlled and governed by a single political party. So, the elections weren’t very meaningful — only one party had a chance of winning. This made Mexico undemocratic in many respects. That changed, and Mexico has improved its democracy, especially in accountability to the people, dramatically.

“The president is elected by plurality vote. In the 1988 and 1994 elections, the winner won about half of the votes cast, but in the 2000 election the winner, Vicente Fox, won only 42.5 per cent of the votes. Proposals exist to amend the constitution to introduce a run-off election between the two front-runners if no candidate wins an absolute majority in the first round. Their success will depend primarily on the electoral prospects of the major parties, as well as considerations of the cost of a second round.

The president is elected for a six-year term and can never be re-elected or reappointed. This prevents presidents from becoming entrenched in power, but it also diminishes their accountability because they never have to face the electorate again. Considering the ideological and symbolic roots behind the prohibition on presidential re-election (it was a focal point in the Mexican Revolution), it is unlikely that this clause will be repealed soon.”

Gilbreth, Chris, and Gerardo Otero. “Democratization in Mexico: The Zapatista Uprising and Civil Society.” Latin American Perspectives 28.4 (2001): 7-29. Web. 16 June 2011.

Mexico having opted for a democratic system, it is obvious that it opens its market to foreign investors, and that absolutely enhances international trade and diversity as integration in the global business world.

Is Mexico a stable country?

“Mexico is potentially on the brink of fast expansion, driven by several factors, such as those outlined above. The reforms in Mexico, if properly implemented (which is a big if), will bring about changes that will improve Mexico’s competitiveness and ease of doing business. This will attract significant foreign direct investment.

Given the recent volatile swings in emerging market currencies, the stability of the Mexican peso is something investors should value. Additionally, Mexico’s country rating was recently upgraded. This will allow the country to raise money for investment at a lower rate than before.

The U.S. is Mexico’s largest trade partner. The potential of Mexico’s geographical location can’t be taken for granted. A boost in the U.S. economy will eventually reflect in the Mexican economy. The timing, though, isn’t entirely certain since investors may continue to discount emerging markets in general, despite Mexico perhaps being undervalued relative to its potential.

While Mexico is likely a great long-term investment, investors should remain diversified and spread investments across markets. As mentioned above, the U.S. market still offers a possibly bullish outlook that can ultimately boost the Mexican economy.”

By Larry Fink, Chairman and CEO

There is no actual instability at the political level. So, business is not shaken at all by instability, whether at the local or international level.

3- Consider whether the economy is market based or a command economy

“Mexico has long been the most accessible Latin American market and nothing in the past decade has changed that. The local currency sovereign market is large and liquid, with no capital controls. Trades can be settled through Euroclear as well as locally, ensuring minimal hurdles for foreign buyers. Even more importantly, the government remains welcoming to foreign investors, with clear and transparent monetary and fiscal policy and no prospect of capital controls.

All this makes it the obvious destination for local currency bond managers to deploy much of the cash they are receiving from new investors. “We can be nimble in Mexico, going in and out,” says Edwin Gutiérrez, a portfolio manager on the emerging markets debt team at Aberdeen Asset Management.

That puts Mexico in clear opposition to Brazil, which “says it would like to attract investment but sends mixed signals”, through its imposition of the 6% IOF tax on foreign investments into government bonds.

The IOF tax means that despite offering some of the highest real yields available in fixed income, Brazil is now relatively unattractive for new money. Foreign participation in the local currency sovereign market is around 11% – largely unchanged since the point when the tax was introduced. There is no reason to take currently onshore capital out of the country, especially since it can be moved between different government instruments without penalty, says Gutiérrez.

But for new investments, Mexico offers much more flexibility.

While most debt managers view the IOF tax as a backwards step, conversely Brazil is the country that has clearly made the biggest improvements in its equity market. Where once the only investable options were unattractive state-owned firms, today investors can choose from hundreds of local companies, including whole sectors such as IT that barely existed a decade ago.

The direct cause of this was the stock exchange’s decision to introduce the Novo Mercado board in 2000. Although this change took several years to build momentum, it has ultimately made a huge difference, says Fiona Manning, an investment manager on Aberdeen’s global emerging markets team.

A listing on this board required higher standards of companies, such as a single share class with voting rights. Previously, listed shares were typically preference shares without voting rights, which resulted in easy abuse of minority shareholders.”

INVESTMENT: Barriers to entry18/03/2012 | By Cris Sholto Heaton

Mexico is not a command economy as it is open to foreign investment, thereby allowing investors from around the world, especially the United States to do business inside Mexico, and does not impose a deep government control on investments.

GDP and GDP growth rate of Mexico

“Mexico is the second largest economy in Latin America. After the Peso Crisis in 1994, Mexico returned to steady growth rates, expanding on average 0.76 percent from 1996 to 2012 on a quarter over quarter basis. Mexico has an export-oriented economy: more than 90 percent of trade is under free trade agreements. In recent years, exports of manufactured products have been expanding more than 10 percent per year, mostly due to the increase in car production. Nevertheless, in order to keep the current pace of growth the country needs to reduce its dependence on the United States; increase its tax base and open the state-controlled energy sector. This page provides – Mexico GDP Growth Rate – actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for – Mexico GDP Growth Rate – was last refreshed on Wednesday, September 9, 2015.