Mexico: an overview

Mexican President Felipe Calderon waves a Mexican flag. Credit: Getty Images

Mexico has the second-largest economy in Latin America after Brazil. It is a major oil producer and exporter, and a third of all government revenue comes from oil. Most of the crude oil is bought by the US.

It has a free-market economy in the trillion-dollar class and per-capita income is one-third that of the US, but income inequality is high. The Mexican economy is highly dependent on the money that Mexican migrant workers in the US send home. With rural areas being abandoned and a high number of shanty towns ringing Mexico's cities, many poor Mexicans try to cross the border into the US, and more than a million are arrested doing so every year.

Since the implementation of Nafta (North American Free Trade Agreement) in 1994, which was widely criticised by left-leaning economists and academics, Mexico’s share of imports from the US has increased from 7 per cent to 12 per cent. More than 90 per cent of trade falls under free trade agreements.