Library of Congress – Federal Research Division Country Profile: Mexico, July 2006 

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COUNTRY PROFILE: MEXICO 

July 2006

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Formal Name: United Mexican States (Estados Unidos Mexicanos). 

Short Form: México. 

Term for Citizen(s): Mexican(s). 

Capital: Mexico City (Ciudad de México), located in the Federal 

District (Distrito Federal) with a population of about 8.6 million. 

Major Cities: The Greater Mexico City metropolitan area encompasses Mexico City and several 

adjacent suburbs, including the populous cities of Ecatepec de Morelos (1.8 million residents) 

and Netzahualcóyotl (1.2 million). The total population of the Greater Mexico City metropolitan 

area is estimated at about 16 million. Other major cities include Guadalajara (1.6 million), 

Puebla (1.3 million), Ciudad Juárez (1.2 million), Tijuana (1.1 million) and Monterrey (1.1 

million). 

Independence: September 16, 1810 (from Spain).

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Public Holidays: New Year’s Day (January 1); Constitution Day (February 5); Birthday of 

Benito Juárez (March 21); International Labor Day (May 1); Independence Day (September 16); 

Discovery of America (October 12); Anniversary of the Revolution (November 20); Christmas 

(December 25); and New Year’s Eve (December 31). 

Flag: Three equal vertical bands of green (hoist side), white, and red; the 

coat of arms (an eagle perched on a cactus with a snake in its beak) is 

centered in the white band. 

HISTORICAL BACKGROUND

Early Settlement and Pre-Columbian Civilizations: Nomadic paleo-Indian societies are 

widely believed to have migrated from North America into Mexico as early as 20,000 B.C. 

Permanent settlements based on intensive farming of native plants such as corn, squash, and 

beans were established by 1,500 B.C. Between 200 B.C. and A.D. 900, several advanced 

indigenous societies emerged. During this “Classic Period,” urban centers were built at 

Teotihuacán (in central Mexico), Monte Albán (in the territory now making up the state of 

Oaxaca), and in the Mayan complexes (in the modern-day states of Chiapas, Tabasco, 

Campeche, Yucatán, and Quintana Roo, as well as at sites in the modern-day countries of 

Honduras, Guatemala, and Belize). These advanced societies developed written languages, 

displayed high levels of occupational specialization and social stratification, and produced 

elaborate art, architecture, and public works. After the unexplained collapse of the Teotihuacán 
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society around A.D. 650, the early civilizations of central Mexico were eclipsed by the Mayan 

city-states of the Yucatan Peninsula. The lowland Mayan communities flourished from A.D. 600 

to A.D. 900, when they too abruptly declined. The Post-Classic period (from about 900 to 1500) 

was characterized by widespread migration throughout Mesoamerica and the re-emergence of 

the central valley of Mexico as the site of large-scale urban settlement and political power. By 

the 1300s, the Aztecs had established themselves on the site of present-day Mexico City. The 

militaristic and bureaucratic Aztec state ruled a far-flung tributary empire spanning much of 

Central Mexico. 

Spanish Conquest, Colonization, and Christianization: During the early sixteenth century,

Spanish military adventurers based in Cuba organized expeditions to the North American 

mainland. The first major military expedition to Mexico, led by Hernán Cortés, landed near 

present-day Veracruz in 1519 and advanced inland toward the Aztec capital of Tenochtitlán 

hoping to conquer central Mexico. By 1521 Spanish forces under Cortés, reinforced by 

rebellious Indian tribes, had overthrown the Aztec empire and executed the last Aztec king, 

Cuauhtémoc. The Spanish subsequently grafted their administrative and religious institutions 

onto the remnants of the Aztec empire. During the early years of colonial rule, the conquistadors 

and their descendants vied for royal land titles (encomiendas) and Indian labor allotments 

(repartimientos). The early colonial economic system was based largely on the ability of the 

encomienda holders (encomenderos) to divert Indian labor from agriculture to the mining of 

precious metals for export to Spain. The encomienda became the basis for a semi-autonomous 

feudal society that was only loosely accountable to the central authorities in Madrid. 

New Spain and the Mercantile Economy: During the sixteenth and seventeenth centuries, 

Mexico experienced far-reaching demographic, cultural, and political change. New Spanish-style 

cities and towns were founded throughout central Mexico, serving as commercial, 

administrative, and religious centers that attracted an increasingly Hispanicized and 

Christianized mestizo population from the countryside. Mexico City, built on the ruins of 

Tenochtitlán, became the capital of Spain’s North American empire. Colonial society was 

stratified by race and wealth into three main groups: whites (European- and American-born), 

castas (mestizos), and native peoples; each had specific rights or privileges (fueros) and 

obligations in colonial society. New Spain was ruled by a viceroy appointed by the Spanish 

crown but in practice enjoyed a large degree of autonomy from Madrid. 

Throughout the colonial period, Mexico’s economic relationship with Spain was based on the 

philosophy of mercantilism. Mexico was required to supply raw materials to Spain, which would 

then produce finished goods to be sold at a profit to the colonies. Trade duties that placed 

stringent restrictions on the colonial economies protected manufacturers and merchants in Spain 

from outside competition in the colonies. In the mid-eighteenth century, the third Bourbon king 

of Spain, Charles III, reorganized the political structure of Spain’s overseas empire in an effort to 

bolster central authority, reinvigorate the mercantile economy, and increase tax revenues. New 

Spain was divided into 12 military departments (intendencias) under a single commandant 

general in Mexico City who was independent of the viceroy and reported directly to the king. 

War of Independence: The spread of late eighteenth-century Enlightenment philosophy, 

together with the egalitarian example of the American and French revolutions, motivated 
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Mexican-born whites (criollos) to seek greater autonomy and social status within the colonial 

system. Discrimination against criollos in the granting of high offices had long been a source of 

contention between Spain and Mexico City. In 1808 the invasion of the Iberian Peninsula by 

Napoleon Bonaparte and the forced abdication of the Spanish king, Charles IV, disrupted Spain’s 

faltering authority over Mexico. Rejecting the puppet regime installed by France, the incumbent 

viceroy allied himself with the criollos and declared an independent junta ostensibly loyal to 

Charles IV. Allies of the Napoleonic regime responded by staging a coup and installing a new 

viceroy, an action that set the stage for war between criollos and Spanish loyalists. On September 

16, 1810, Miguel Hidalgo y Costilla, a criollo parish priest, issued the Grito de Dolores (Cry of 

Dolores), a call to arms against Spanish rule that mobilized the Indian and mestizo populations 

and launched the Mexican war of independence. After a brief siege of Mexico City by insurgents 

in 1814, Spanish forces waged a successful counteroffensive that had nearly annihilated the 

rebels by 1820. However, the tide turned in favor of the criollos in February 1821, when a 

loyalist officer, Augustín de Iturbide, spurned the newly established constitutional monarchy in 

Spain and defected with his army to the rebels. Under the conservative Plan of Iguala, the rebel 

army agreed to respect the rights of Spanish-born whites (peninsulares) and preserve the 

traditional privileges (fueros) and land titles of the Roman Catholic Church. The Spanish, now 

outmaneuvered politically as well as militarily, lost the will to continue the war and recognized 

Mexican independence in September 1821. 

Empire and Early Republic: Upon the withdrawal of Spain, Iturbide declared himself emperor 

of Mexico and Central America. Within months, however, his imperial regime was bankrupt and 

had lost the support of the criollo elite. In February 1823, Iturbide was overthrown by republican 

forces led by General Antonio López de Santa Anna. The Mexican empire was dissolved when 

the United Provinces of Central America declared their independence in July 1823. Clashes 

between the conservative and liberal parties dominated politics during the early republic. 

Conservatives, who advocated a centralized republic governed from Mexico City and the 

maintenance of clerical and military fueros, had the support of the Roman Catholic Church and 

much of the army. Liberals, on the other hand, advocated federalism, secularism, and the 

elimination of fueros. Under the federal republic in effect from 1824 to 1836, Mexico was ruled 

by a series of weak and perennially bankrupt liberal governments. General Santa Anna and his 

allies fashioned a centralized republic that held power from 1836 to 1855. Although nominally a 

liberal, Santa Anna was primarily a nationalist who dominated Mexico’s politics for two 

decades. Santa Anna’s efforts to assert Mexican government authority over Anglo-American 

settlements in Texas spurred that region’s secession from Mexico in 1835. Excesses committed 

by a punitive Mexican expedition against Texan garrisons at the Alamo and Goliad provoked 

strong anti-Mexican sentiment in the United States and galvanized U.S. public support for Texan 

independence. In April 1836, Texan forces defeated and captured Santa Anna at San Jacinto. 

During a brief captivity, the Mexican general signed a treaty recognizing Texan independence 

from Mexico. 

Mexican-American War, Civil War, and French Intervention: A dispute with the United 

States over the boundaries of Texas led to war between the United States and Mexico in April 

1846. Two U.S. Army columns advancing southward from Texas quickly captured northern 

Mexico, California, and New Mexico, repelling Santa Anna’s forces at Buena Vista. An 

amphibious expeditionary force led by General Winfield Scott captured the Gulf Coast city of 
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Veracruz after a brief siege and naval blockade. Scott’s forces subdued Mexico City in 

September 1847, following a series of pitched battles along the route inland to the Mexican 

capital and its surrounding bastions. In the Treaty of Guadalupe Hidalgo that ensued, U.S. 

withdrawal was contingent on Mexico’s ceding of the territories of New Mexico and Upper 

California (the present-day states of California, Nevada, Utah, and parts of Arizona, New 

Mexico, Colorado, and Wyoming) and its acceptance of the incorporation of Texas into the 

United States. 

In 1855 Santa Anna was ousted and forced into exile by a revolt of liberal army officers. A 

liberal government under President Ignacio Comonfort oversaw a constitutional convention that 

drafted the progressive constitution of 1857. The new constitution contained a bill of rights that 

included habeas corpus protection and religious freedom and mandated the secularization of 

education and the confiscation of Catholic Church lands. It was strongly opposed by 

conservatives and church officials who objected to its anticlerical provisions. Seeking to avoid 

armed conflict, President Comonfort delayed its promulgation and instead decreed his own 

moderate reform agenda known as the Three Laws. However, in January 1858 after unsuccessful 

efforts by Comonfort to craft a political compromise, the factions took up arms, and the 

government was forced from office. A three-year civil war between conservative and liberal 

armies, known as the War of the Reform, engulfed the country. After initial setbacks, the 

liberals, led by the prominent Zapotec Indian politician and former vice president Benito Juárez, 

gained the upper hand. In January 1861, the liberals regained control of Mexico City and elected 

Juárez president. 

In January 1862, the navies of Spain, Britain, and France jointly occupied the Mexican Gulf 

coast in an attempt to compel the repayment of public debts. Britain and Spain quickly withdrew, 

but the French remained and, in May 1863, occupied Mexico City. Drawing on the support of the 

Mexican conservatives, Napoleon III installed Austrian prince Ferdinand Maximilian von 

Habsburg as Mexican Emperor Maximilian I. By February 1867, a growing liberal insurgency 

under Juárez and the threat of war with Prussia had compelled France’s withdrawal from 

Mexico. Maximilian was captured and executed by Juárez’s forces shortly thereafter. Juárez was 

restored to the presidency and remained in office until his death in 1872. 

Porfirio Díaz Era: From 1876 until 1910, governments controlled by the liberal caudillo 

Porfirio Díaz pursued economic modernization all the while maintaining authoritarian political 

control. In contrast to his liberal predecessors, Díaz established cordial relations with the 

Catholic Church, an institution he considered central to Mexican national identity. The Díaz 

years, known as the “Porfiriato” saw heavy state investment in urban public works, railroads, and 

ports—all of which contributed to sustained, export-led economic growth. The Porfiriato 

governments encouraged foreign investment in export agriculture and the concentration of arable 

land in the form of haciendas. Although the urban middle class experienced substantial 

improvements in quality of life, Mexico’s peasant majority found its livelihood threatened by the 

loss of communal lands to the haciendas. In response to growing unrest in the countryside, Díaz 

created the Rural Guard, a paramilitary force that became notorious for its repressive tactics. 

Mexican Revolution and Aftermath: By the turn of the century, opposition to Díaz had spread 

among dissident liberals who sought a return to the principles of the constitution of 1857. 
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Following Díaz’s fraudulent reelection in 1910, several isolated rural revolts coalesced into a 

nationwide insurrection. Unable to regain control of several rebellious state capitals, Díaz 

resigned the presidency in May 1911 and fled to France. A provisional government under the 

liberal reformer Francisco I. Madero was installed but failed to maintain the support of radical 

peasants led by Emiliano Zapata, who was conducting a rural insurgency in southern Mexico. 

Amid general unrest, a counterrevolutionary government under Victoriano Huerta assumed 

power in February 1913. Huerta’s authority was undermined when U.S. Marines occupied 

Veracruz in response to a minor incident. Following Huerta’s resignation in July 1914, fighting 

continued among rival bands loosely allied with Venustiano Carranza and Francisco “Pancho” 

Villa. United States support for Carranza prompted Villa to retaliate by raiding several U.S. 

border towns. In response, the United States dispatched troops under General John J. Pershing on 

an unsuccessful expedition into northern Mexico to either kill or capture Villa. Carranza 

negotiated a cease-fire among several of the warring Mexican factions in December 1916 and 

restored order to most of the country by accepting the radical constitution of 1917. Rural 

violence continued in the south, however, until the assassination of Zapata by Carranza’s forces 

in November 1920. The Mexican Revolution exacted a heavy human and economic toll; more 

than 1 million deaths were attributed to the violence. 

Consolidation of the Revolution: From the 1920s through the 1940s, a series of strong central 

governments led by former generals of the revolutionary armies governed Mexico. Most 

Mexican presidents complied with the constitutional provision mandating a single six-year term 

(sexenio) with no reelection. During the latter 1920s, President Plutarco Elías Calles established 

many of the institutions that would define the Mexican political system throughout the twentieth 

century. This system was based on an authoritarian state controlled by a hegemonic 

“revolutionary” party headed by a powerful president, economic nationalism, limited land 

collectivization, military subordination to civilian authority, anticlericalism, and the peaceful 

resolution of social conflict through corporatist representation of group interests. Tactics such as 

extensive use of state patronage, manipulation of electoral laws and electoral fraud, government 

propaganda and restrictions on the press, and intimidation of the opposition helped ensure the 

decades-long domination of government at all levels by the Institutional Revolutionary Party 

(Partido Revolucionario Institucional—PRI). Through their top-down control of the PRI, 

presidents acquired the power to handpick their successors, decree laws, and amend the 

constitution virtually at will. 

The ideology of the revolutionary regime took a leftward turn during the sexenio of Lázaro 

Cárdenas (1934–40). Cárdenas nationalized Mexico’s oil industry and vastly expanded the 

acreage of nontransferable collectivized farms (ejidos) set aside for peasant communities. During 

World War II and the early years of the Cold War, the governments of Miguel Avila Camacho 

(1940–46) and Miguel Alemán Valdés (1946–52) repaired strained relations with the United 

States and returned to more conservative policies. In the postwar years, Mexico pursued an 

economic development strategy of “stabilizing development” that relied on heavy public-sector 

investment to modernize the national economy. Concurrently, Mexican governments followed 

conservative policies on interest and exchange rates that helped maintain low rates of inflation 

and attracted external capital to support industrialization. This dual strategy helped maintain 

steady economic growth and low rates of inflation through the 1960s. 
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Crisis and Recovery: During the presidencies of Luis Echeverría (1970–76) and José López 

Portilllo (1976–82), the public sector grew dramatically and state-owned enterprises became a 

mainstay of the national economy. Massive government spending was sustained in part by 

revenues from the export of newly discovered offshore oil deposits. By the late 1970s, oil and 

petrochemicals had become the economy’s most dynamic sectors. However, the windfall from 

high world demand for oil would be temporary. In mid-1981 Mexico was beset by falling oil 

prices, higher world interest rates, rising inflation, a chronically overvalued peso, and a 

deteriorating balance of payments that spurred massive capital flight. In August 1982, the 

Mexican government defaulted on scheduled debt repayments—an event that heralded a 

regionwide debt crisis. President López Portillo responded to the crisis by nationalizing the 

banking industry, further undermining investor confidence. His successor, Miguel de la Madrid 

Hurtado (1982–88) implemented economic austerity measures that laid the groundwork for 

economic recovery. In September 1985, the country suffered another blow when two major 

earthquakes struck central Mexico. Between 5,000 and 10,000 people are believed to have died 

and 300,000 left homeless in the worst natural disaster in Mexico’s modern history. Many 

victims lost their lives in modern high-rise buildings constructed in violation of safety codes. The 

high death toll and the government’s inadequate response to the disaster further undermined 

public confidence in the PRI-dominated political system. 

In the run-up to the 1988 presidential and congressional elections, a splinter faction of left-wing 

former PRI members opposed to market reforms rallied behind the independent presidential 

candidacy of Cuahtemoc Cárdenas. In the first competitive presidential election in decades, the 

PRI candidate, Carlos Salinas de Gortari, was declared the winner with a bare majority of the 

vote. Numerous irregularities in the vote tally, including an unexplained shutdown of the 

electoral commission’s computer system, led to widespread charges of a fraudulent victory by 

the PRI. Overcoming a weak mandate and strong opposition from organized labor, President 

Salinas undertook a sweeping liberalization of the economy. Reforms included the privatization 

of hundreds of state-owned enterprises, liberalization of foreign investment laws, deregulation of 

the financial services sector, and across-the-board reductions in tariffs and nontariff trade 

barriers. Economic liberalization culminated in the negotiation of the North American Free 

Trade Agreement (NAFTA) with Canada and the United States in 1992. Salinas’s reforms were 

overshadowed by subsequent revelations of corruption within the top echelons of the PRI, as 

well as by the unexpected emergence of a rural insurgency in the southern state of Chiapas. 

Despite the assassination of the original PRI candidate, Luis Donaldo Colosio, the presidential 

election proceeded as scheduled in the fall of 1994. The replacement PRI candidate, Ernesto 

Zedillo Ponce de León, managed to stave off a serious challenge from the center-right National 

Action Party (Partido de Acción Nacional—PAN) to win the presidency. 

Transition to Democracy: During the mid-1990s, an economic crisis stemming from an 

unsustainable current account deficit and mismanagement of the government bond market 

plunged Mexico into a severe recession. President Zedillo spent much of his sexenio restoring 

macroeconomic balance and responding to demands for greater accountability and transparency 

of public institutions. Zedillo also had to contend with the Zapatista rebellion in Chiapas, which 

highlighted the poverty and marginalization that characterized many of Mexico’s indigenous 

communities. In the political realm, the Zedillo administration advanced electoral system 

reforms that leveled the playing field for opposition parties and set the stage for a genuine 
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transition to democracy. The July 1997 midterm elections left the PRI with a minority of seats in 

the Chamber of Deputies (the lower house of Congress), expanded opposition control of state 

governorships, and gave the left-wing Party of the Democratic Revolution (Partido de la 

Revolución Democrática—PRD) control of Mexico City’s government. The opposition’s 

momentum carried over into the September 2000 general elections. The PAN candidate, Vicente 

Fox Quesada, won the historic presidential race, becoming the first opposition head of state since 

the consolidation of the revolution. President Fox promised a deepening of Mexico’s economic 

and political reforms, declared “war” on organized crime, and planned to negotiate an immigrant 

“guest worker” program with the United States. Despite strong public support early in its term, 

the Fox administration was weakened by the PAN’s loss of congressional seats during the 2003 

midterm elections and the government’s failure to craft a legislative coalition in support of its 

reform agenda. By the end of his term in 2006, much of President Fox’s structural reform 

program remained unfulfilled. 

On July 2, 2006, Mexico held general elections for president, all seats in Congress, and several 

state governorships. The presidential race was closely contested between the PAN candidate, 

former Fox administration energy minister Felipe Calderón Hinojosa, and the PRD candidate, 

populist former mayor of Mexico City Andrés Manuel López Obrador. The PRI candidate, 

former Tabasco governor Roberto Madrazo Pintado, trailed in the race, as voters appeared wary 

of returning the PRI to the presidency. Opinion polls indicated that the election was largely a 

referendum on Mexico’s two decades of market-oriented economic reforms. Calderón promised 

to continue the reform agenda by promoting greater foreign investment and increasing the 

competitiveness of Mexico’s economy. He also pledged to continue Mexico’s recent shift toward 

a more internationalist foreign policy based on the promotion of free trade and regional 

democratic reform. By contrast, López Obrador vowed to focus on Mexico’s domestic problems, 

such as poverty and social inequality, and to halt so-called “neo-liberal” reforms. He promised to 

create thousands of jobs by funding massive public works projects and affirmed that he would 

seek to renegotiate NAFTA in order to protect Mexican farmers from an influx of imported U.S. 

corn. Further, López Obrador vowed to break up the unpopular commercial oligopolies that 

emerged from the privatization of state assets during the 1990s. 

A preliminary vote count showed the results of the presidential election to be extremely close. 

Calderón held a slight lead of about 0.5 percent of the total votes cast. Uncertainty about the 

accuracy of the preliminary figures led both of the leading candidates to claim victory. On July 6, 

2006, an official tabulation released by the independent Federal Electoral Institute (Instituto 

Federal Electoral—IFE) confirmed that Calderón had indeed won the election by a slim plurality 

of 35.89 percent versus López Obrador’s 35.31 percent of the vote (a margin of victory of 

244,000 votes out of 41.8 million cast). In response, López Obrador alleged that the voting 

process had been marred by fraud and announced his intention of challenging the results before 

the Electoral Tribunal. The PRD leader also announced that he would convene a series of 

nationwide demonstrations by his supporters in an effort to pressure the election authorities to 

order a full manual recount of all ballots. López Obrador’s call for massive demonstrations 

raised widespread concern that protests could turn violent and undermine Mexico’s political 

stability and economy. 
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The results of the 2006 congressional races saw both the PAN and the PRD gain seats at the 

expense of the formerly dominant PRI. For the first time in its history, the PRI lost its plurality of 

seats in both houses of Congress, an event observers interpreted as a further sign of the party’s 

decline. Nonetheless, the PRI retained a sufficiently large bloc of seats to remain an influential 

congressional force and was well positioned to become a coalition partner of any future Mexican 

government. The PRD retained control of the powerful mayoralty of Mexico City. All three 

major parties held state governorships. 

By mid-2006 Mexico had made progress in stabilizing the economy and reducing extreme 

poverty. However, significant disparities in wealth, high levels of crime, and corruption 

persisted. The less-developed states in the south continued to lag economically behind the more 

prosperous north and center, fueling illegal migration to the United States. Mexico’s economy 

was also lagging behind those of other middle-income countries, such as China, in terms of 

overall competitiveness. In addition to further consolidating Mexico’s transition to democracy, 

the 2006 general elections presented an opportunity to overcome executive-legislative stalemate 

and move toward consensus on economic and public-sector reforms. 

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GEOGRAPHY

Location: Mexico is located in the southern portion of North America, 

bordering the southwestern United States from California to Texas. The 

southernmost Mexican states of Quintana Roo, Campeche, and Chiapas 

define the northern border of the isthmus of Central America. 

Size: Mexico has an area of 1,964,375 square kilometers—making it 

the third largest nation in Latin America (after Brazil and Argentina). 

Land Boundaries: Mexico has 4,301 kilometers of international land borders: 3,152 kilometers 

with the United States, 956 kilometers with Guatemala, and 193 kilometers with Belize. 

Disputed Territory: Mexico has no outstanding international territorial disputes. 

Length of Coastline: Mexico has a 10,143-kilometer coastline: 7,338 kilometers on the Pacific 

Ocean and Gulf of California and 2,805 kilometers on the Gulf of Mexico and Caribbean Sea. 

Maritime Claims: Mexico claims a territorial sea of 12 nautical miles, a contiguous zone of 24 

nautical miles, an exclusive economic zone that extends 200 nautical miles off each coast and 

covers approximately 2.7 million square kilometers, and a continental shelf of 200 nautical miles 

or to the edge of the continental margin. 

Topography: Mexico has a varied topography consisting mainly of plateaus in the eastern twothirds of the national territory and a mountainous spine running through the western third of the 

country. The interior north of the Mexico City metropolitan area is mainly high plateau—known 

as the Mesa Central and Mesa del Norte. The average elevation in the plateaus ranges from about 

900 meters in the north to 2,400 meters in the southern portion of the Mesa Central. In the far 
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northwest, the Baja Peninsula stretches southeast from the U.S. border for 1,300 kilometers. The 

peninsula is extremely dry and rugged, with a very narrow coastal plain. The southern highlands, 

located south of the Mesa Central, contain a number of steep mountain ranges, deep valleys, and 

dry plateaus. The Yucatan Peninsula extends northeast from the Isthmus of Tehuantepec into the 

Gulf of Mexico. It is a flat, low-lying limestone plateau lacking in major rivers. Mexico has 

several massive mountain ranges, most of which extend from northwest to southeast: the Sierra 

Madre Occidental in the west, the Sierra Madre Oriental in the east, and the Sierra Madre del Sur 

in the south. Lesser ranges include the Sierra Madre de Chiapas and the Cordillera 

Neovolcánica—an east-to-west volcanic range spanning the breadth of the country just south of 

Mexico City. The country’s highest point, the Pico de Orizaba (5,636 meters), is located within 

the Cordillera Neovolcánica about 193 kilometers southeast of Mexico City. Mexico has 

extensive lowlands largely along the Gulf coast and in the Yucatan Peninsula. 

Principal Rivers: Mexico has nearly 150 rivers, two-thirds of which empty into the Pacific 

Ocean and the remainder into the Gulf of Mexico or the Caribbean Sea. Most rivers are short and 

non-navigable, running from coastal mountain ranges to the coast. Water volume is unevenly 

distributed throughout the country. Five rivers—the Usumacinta, Grijalva, Papaloapán, 

Coatzacoalcos, and Pánuco—account for 52 percent of the average annual surface water volume. 

Most of the larger rivers are located in the southeastern part of the country and flow into the Gulf 

of Mexico. Northern Mexico contains less than 10 percent of the country’s water resources. The 

Río Bravo del Norte (known as the Rio Grande in the United States) defines Mexico’s northern 

border from Ciudad Juárez east to the Gulf of Mexico. 

Climate: Mexico experiences great climatic variation owing to its considerable north-south 

extension and variations in elevation. The climate of much of northern and central Mexico is 

characterized by high temperatures and moderate to low rainfall. The highlands of the central 

plateau generally have a moderate climate with few extremes of hot or cold. Temperatures in 

Mexico City, for example, range from an average of 17° C in July to 12° C in January. The 

northern and central areas of the plateau are arid to semiarid; the drier regions receive about 300 

millimeters of rainfall annually. Annual rainfall increases to about 600 millimeters in the 

southern part of the plateau, including the Mexico City area. The northern coastal areas, 

including Baja California, are arid. Rainfall along the Pacific Coast averages just 130 

millimeters, as compared with 250 to 600 millimeters along the northern Gulf coast. Much of 

southern Mexico has a tropical climate with distinct rainy and dry seasons. Temperatures in the 

coastal regions range from 21° C to 27 ° C. Annual rainfall, which ranges from 1,500 millimeters 

to 2,000 millimeters, occurs mainly during the rainy season of May to October. The Gulf coast is 

subject to hurricanes. 

Natural Resources: Mexico has abundant natural resources. In addition to extensive subsoil 

resources, the country has a rich biodiversity and varied wildlife. As of 2003, about 5 percent of 

Mexico’s land area was under a protected status. Protected sites included six wetlands of 

international importance (Ramsar sites) totaling 1.1 million hectares and 12 biosphere reserves 

totaling 6.8 million hectares. 

Land Use: Although nearly half of Mexico’s total land area is officially classified as 

agricultural, only 12 percent of the total area is cultivated. Extensive irrigation projects carried 
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out in the 1940s and 1950s greatly expanded Mexico’s cropland, especially in the north. Onethird of Mexican territory is officially designated as grazing land. These lands are located mainly 

in the north. Some 9 percent of Mexico’s territory consists of forest or woodland, 59 percent of 

which is in the tropics, 15 percent in the subtropical zone, and 26 percent in the temperate and 

cool zones. Temperate forests cover some 49 million hectares, almost one-third of which are 

open to logging, mainly in the states of Chihuahua, Durango, and Michoacán. 

Environmental Factors: Mexico faces significant environmental challenges affecting almost 

every section of the country. Vast expanses of tropical and subtropical forests in the south have 

been denuded for cattle raising and agriculture. Deforestation has contributed to serious levels of 

soil erosion nationwide. Soil destruction is particularly pronounced in the north and northwest. 

More than 60 percent of land is considered in a total or accelerated state of erosion. The result is 

a mounting problem of desertification throughout the region. Mexico’s coastline is threatened by 

inadequately protected petroleum extraction in the Gulf of Mexico, which has damaged marine 

ecosystems. Mexico City is one of the world’s most polluted urban areas. Vehicle emissions and 

other airborne contaminants have been blamed for a wide range of respiratory illnesses. Polluted 

water from Mexico City has been linked to congenital birth defects and high levels of 

gastrointestinal illnesses in the neighboring state of Hidalgo. Government antipollution measures 

have met with limited success. 

Time Zones: Most of Mexico, including Mexico City, is in the Central Time zone (Coordinated 

Universal Time (UTC)/Greenwich Mean Time (GMT)–6 hours). The state of Northern Baja 

California is on Pacific Time (UTC/GMT –8 hours). The states of Baja California Sur, Sonora, 

Sinaloa, Chihuahua, and Nayarit are on Mountain Time (UTC/GMT –7 hours). In Mexico, 

however, Mountain Time is usually referred to as “Pacific Time” because most of these states 

border the Pacific Ocean. The state of Quintana Roo is on Eastern Time (UTC/GMT –5 hours). 

Mexico uses daylight saving time (DST). During 2006 DST was scheduled for April 2 to 

October 29. 

SOCIETY

Population: In 2005 Mexico had an estimated population of 106.2 million. The population 

growth rate has been falling since the 1970s, declining from an average of 3.4 percent annually 

during the 1960s to 1.8 percent annually in the 1990s. The decrease is largely attributable to 

declining fertility. Emigration to the United States has increased significantly since the 1970s. 

The number of Mexican-born residents in the United States grew from an estimated 760,000 in 

1970 to 8.5 million in 2000 (8.7 percent of Mexico’s population in the 2000 census). 

Immigration has not been a significant factor in population growth since the 1920s. Nationwide, 

population density was 52 residents per square kilometer according to the 2000 census. Density 

varied widely among the 31 states and Federal District from a high of 5,975 residents per square 

kilometer in the Federal District to a low of 12 residents per square kilometer in Baja California 

Sur. Mexico experienced heavy urbanization during the latter half of the twentieth century. In 

1950 less than half the population (42.6 percent) lived in communities of 2,500 or more 

inhabitants. By 2005 more than three-quarters (76.2 percent) of Mexicans lived in such 

communities. The national population is heavily concentrated in central Mexico along a roughly 
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11

northwest to southeast axis from Guadalajara to Veracruz. This area includes the heavily 

populated contiguous states of Jalisco, Guanajuato, Michoacán, Hidalgo, México, Distrito 

Federal, Morelos, Puebla, and Veracruz-Llave—which together are home to about half the 

national population. Major urban agglomerations are also found in the north centered on the 

cities of Ciudad Juárez, Tijuana, and Monterrey—with just over 1 million residents each. In the 

south, the largely Amerindian populations in the states of Chiapas and Oaxaca live mainly in 

small- to medium-sized towns and villages. 

Demography: Mexico’s birthrate has been declining since the 1960s. During the 1990s, the rate 

of natural increase was 1.6 percent, half the rate observed during the 1960s (3.1 percent). In 2004 

there were 18.8 live births and 4.5 deaths per 1,000 population. In 2005 life expectancy at birth 

was estimated at 75 years (72 years for men and 77 years for women). The total fertility rate 

(children born per woman) was 2.4 in 2005. Infant mortality stood at 21 per 1,000 live births 

versus 79.3 deaths per 1,000 live births in 1970. The 2005 age structure of the population was as 

follows: 0–14 years, 31 percent; 15–29 years, 28 percent; 30–49 years, 26 percent; 50–64 years, 

10 percent; 65 years and older, 6 percent. The median age was 25.3 years, and females slightly 

outnumbered males by a ratio of 1.05:1. As a result of declining fertility and rising life 

expectancy, by 2025 Mexico’s population is predicted to age overall; the share of the youngest 

cohort (0–14) will decline to 24 percent and that of the oldest will rise to 10 percent. 

Ethnic Groups: The two main ethnic categories of mestizo and Indian/Amerindian are defined 

broadly along cultural rather than racial lines. The term “mestizo” describes persons with a 

solely European background, those with a mixed European-indigenous ancestry, and indigenous 

people who have adopted the dominant Hispanic societal values. According to anthropologists, 

the terms “Indian” or “indigenous” describe persons who identify themselves as such, use an 

indigenous language in daily speech, remain actively involved in indigenous communal affairs, 

or participate in religious ceremonies rooted in native American traditions. Approximately 60 

percent of the population is mestizo, 30 percent Amerindian or predominantly Amerindian, 9 

percent white or European, and 1 percent “other.” 

Languages: Spanish is the dominant language for both the mestizo and Indian populations. 

Approximately 6 million Mexicans spoke an indigenous language as a first language in 2000. 

The number of indigenous language speakers rose slightly in absolute terms from 1990 to 2000 

but declined slightly as a percentage of the total Mexican population (7.2 percent in 2000 versus 

7.8 percent in 1990). Indigenous speakers are highly concentrated in the southern states of 

Guerrero, Oaxaca, Quintana Roo, Chiapas, and Yucatán. Among indigenous language speakers, 

83 percent also speak Spanish, while about 1 million are monolingual. Linguistically isolated 

communities are most prevalent in the states of Chiapas and Guerrero. Specialists have identified 

12 distinct Mexican indigenous linguistic families, more than 40 subgroups, and at least 90 

individual languages. According to the 2000 census, nearly 24 percent of all native speakers 

spoke Náhuatl, the language of the Aztec people and the most geographically dispersed native 

language. Other major indigenous languages include Maya, Zapotec, Mixtec, Otomí, Tzeltal, and 

Tzotzil. 

Religion: Roman Catholicism is the main religion; 88 percent of the population five years of age 

and older identified themselves as Roman Catholic in the 2000 census. Protestants and 
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12

Evangelicals were the second largest religious group, accounting for approximately 5 percent of 

the population. The rapid growth in Protestant and Evangelical membership slowed during the 

1990s, averaging a 3.7 percent annual rise from 1990 to 2000 (versus 10 percent during the 

1970s and 5 percent during the 1980s). 

Education and Literacy: During the past several decades, Mexico has made significant 

advances in literacy and the provision of public education. In 2001 the adult literacy rate stood at 

91.4 percent (93.5 percent among men and 89.5 percent among women). Mexican law mandates 

universal primary and secondary education. Nine years of education are compulsory, but in 

practice this legal requirement is largely ignored. In 2002 Mexico had 25.6 million students in 

primary, secondary, and postsecondary educational institutions—an increase of 11 percent since 

1995. In 2002 the share of public spending invested in education was 24 percent—the highest 

among Organization for Economic Cooperation and Development (OECD) countries and almost 

twice as high as the OECD average level (12.9 percent). Most current spending at the primary 

and secondary levels goes to the compensation of staff, leaving few resources for infrastructure 

and training. Despite recent increases in funding, spending per primary student in Mexico is still 

very low, approximately one-quarter of the OECD average of US$5,313. The same holds true for 

lower secondary education. Enrollment rates in primary education are high; however, many 

students—especially those from poor families—do not complete high school, opting instead to 

enter the workforce. The performance of Mexican secondary school students in math, reading, 

and science is the lowest of all OECD countries and ranks well below the OECD average. 

Health: Aggregate health statistics have improved greatly since the 1970s. However, Mexico 

lags well behind other Organization for Economic Cooperation and Development (OECD) 

countries in health status and health care availability. Total health care spending accounted for 

6.2 percent of gross domestic product (GDP) in 2003; per capita spending on health care was 

US$583 (adjusted for purchasing power parity)—about a quarter of the OECD average. During 

2003, 46.4 percent of health spending was paid from public sources—comparable to the share of 

public spending in the United States but significantly below the OECD average. Private 

financing in Mexico is almost entirely in the form of out-of-pocket payments, as only 3.1 percent 

of total expenditures on health are funded through private health insurance. In 2003 Mexico had 

1.5 doctors and 2.1 nurses per 1,000 population, a significant increase in health care personnel 

over the previous decade but again below the OECD averages for these indicators. The mortality 

rate for children younger than five years was 28 per 1,000 live births in 2004. Ninety-one percent 

of the population had direct access to potable water and 77 percent to sanitation. In 2003 the 

incidence of HIV/AIDS among persons aged 15 to 49 was 0.3 percent. 

Welfare: Mexico has made progress in reducing poverty since the late 1990s, performing above 

the Latin American average. However, nearly half of the population continues to live in poverty; 

about 15 percent of the total population subsists in extreme poverty with limited access to food 

and basic services. Residents of southern Mexico consistently trail the rest of the country in 

quality-of-life indicators. Urban workers in the informal sector of the economy do not have 

access to the same level of health care as their counterparts in the formal sector, nor do they 

qualify for retirement or pension benefits. About half the workforce is registered with the 

Mexican Social Security Institute. 
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13

ECONOMY

Overview: Mexico is a middle-income country with a developing economy that is closely linked 

to the much larger economy of the United States. Mexico’s economy ranks as “mostly free” in 

the 2006 Index of Economic Freedom (a joint publication of the Wall Street Journal and the 

Heritage Foundation). From the 1940s through the late 1960s, successive governments followed 

an economic strategy of import substitution and fiscal and monetary restraint intended to 

promote growth while holding inflation in check. During the 1970s, populist governments 

abandoned fiscal discipline and oversaw a massive expansion of consumer subsidies and state 

ownership of productive sectors. Unsustainable public-sector spending backed by over-reliance 

on oil export revenues and abundant international credit contributed to chronically high inflation 

and wild fluctuations in economic performance. As a result, the economy experienced spurts of 

rapid growth followed by sharp depressions in 1976 and 1982. The mid- to late 1980s were years 

of economic austerity and stagnant growth during which Mexico was able to balance its national 

accounts while combating high inflation. Gross domestic product (GDP) grew at an average rate 

of just 0.1 percent per year between 1983 and 1988. During these years, monetary policy was 

severely restricted and public-sector spending sharply curtailed. 

The late 1980s and early 1990s saw far-reaching market-oriented structural reforms, including 

privatization of hundreds of state-owned enterprises, liberalization of foreign investment laws, 

deregulation of the financial services sector, and across-the-board reductions in tariffs and 

nontariff trade barriers. These reforms, which culminated in the ratification of the North 

American Free Trade Agreement (NAFTA) in 1994, attracted an influx of US$148 billion in 

foreign direct investment (FDI) during the next decade. From 1988 to 1994, GDP growth 

averaged 2.6 percent, sustained by exports and an influx of foreign capital. However, the 

collapse of the peso in December 1994 and the ensuing economic crisis erased most of the real 

wage gains from the previous years. In response to the 1994 crisis, Mexico passed legislation 

granting greater independence to its central bank. Growth resumed in the late 1990s, but the 

recovery was cut short by the spillover effects of the 2001 recession in the United States. Since 

2002 a worldwide commodity price boom, a U.S. economic recovery, and sound macroeconomic 

policies have helped boost economic growth while allowing inflation to remain in the single 

digits. ((OT)) 

The economy is hampered by structural weaknesses that limit Mexico’s potential for future 

growth and job creation. Mexico’s workers are generally low skilled and have less schooling 

than workers in advanced industrial economies. This deficit in human capital manifests itself in 

terms of stagnant labor productivity and real wages, as well through the existence of a large 

“informal” labor sector that deprives the education, health care, and social security systems of 

crucial tax revenues. Income distribution remains highly unequal; about half of Mexico’s 

population lives in poverty. 

Despite recent reforms, public policy continues to impose artificial restraints on the economy’s 

competitiveness and growth potential: rigid labor and commercial codes discourage hiring and 

inhibit informal workers from transitioning into the formal economy; the lucrative energy sector, 

which remains state-owned, suffers from numerous inefficiencies and undercapitalization; and 

the federal government relies heavily on the oil industry for revenues, which consequently 
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14

renders public budgets vulnerable to cyclical fluctuations in hydrocarbon prices. While the 

liberalizing reforms associated with NAFTA have been a boon to northern and central Mexico’s 

manufacturing centers, few new jobs have materialized for the predominantly agricultural states 

in the south and southwest. This uneven development pattern has failed to slow large-scale wage 

migration to the United States. As global competition for capital investment has increased—

particularly from low-cost manufacturing in Asia—Mexico’s status as a premier export hub for 

the North American market has eroded. 

Gross Domestic Product (GDP): GDP stood at US$699.5 billion dollars in 2005 (US$1.07 

trillion in terms of purchasing power parity), representing a per capita GDP of approximately 

US$6,500 (US$10,500 in terms of purchasing power parity)—the highest in Latin America. In 

early 2006, Mexico was entering the third consecutive year of economic expansion with 

predicted annual GDP growth of approximately 3.5 percent. Economic output in 2005 was 

divided among the sectors as follows: services, 69.5 percent; industry, 26.5 percent; and 

agriculture, 4 percent. 

Government Budget and Public Finance: During 2005, federal government expenditures were 

US$184 billion (equivalent to 26 percent of gross domestic product), slightly outpacing revenues 

of US$181 billion. The public sector typically relies on profits from the state-owned 

hydrocarbons sector for a quarter of its revenues. Federal tax revenue is derived from several 

sources: corporate and individual income taxes, a nationwide value-added tax, and excise taxes 

on the mining industry. State and local governments rely heavily on federal government revenue 

transfers for their budgets. 

Inflation: Inflation has trended generally downward since the late 1980s (when it exceeded 150 

percent), thanks to a commitment by successive governments and the independent central bank 

to anti-inflationary fiscal and monetary policies. During the first quarter of 2006, core inflation 

stood at an annualized rate of approximately 3 percent. 

Agriculture, Forestry, and Fishing: In 2005 agriculture accounted for only 4 percent of gross 

domestic product but employed 18 percent of the labor force. Agricultural practices range from 

traditional techniques, such as slash-and-burn cultivation of indigenous plants for family 

subsistence, to the use of advanced technology and marketing in large-scale, capital-intensive 

export agriculture. The staple food crops are maize, wheat, sorghum, barley, rice, beans, and 

potatoes. The principal cash crops are coffee, cotton, sugarcane, fruit, and vegetables. Other 

important agricultural goods include beef, poultry, dairy products, and wood products. 

Agricultural exports, valued at US$5.77 billion in 2004, are primarily destined for the United 

States. Forestry production is geared toward the exploitation of domestic fuelwood, sawlogs for 

construction, and pulpwood for processing in domestic paper mills. Mexico’s coastal fishing 

grounds offer a rich variety of fish and other seafood. The Pacific coast accounts for nearly 

three-quarters of Mexico’s total catch, producing mainly lobster, shrimp, croaker, albacore, 

skipjack, and anchovies. Mexico’s Gulf and Caribbean waters produce shrimp, jewfish, croaker, 

snapper, mackerel, snook, and mullet. In 2003 the total catch exceeded 1.5 million metric tons. 

Non-fuel Mining and Minerals: Mexico has abundant mineral resources and has historically led 

the world in the production of silver. During 2004 silver production exceeded 3 million tons. 
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15

Other significant mining products in 2004 were iron (6.9 million tons), sulphur (1.1 million 

tons), fluorite (0.84 million tons), sodium sulphate (0.61 million tons), zinc (0.38 million tons), 

copper (0.35 million tons), and manganese (0.14 million tons). Mexico also possesses substantial 

deposits of mercury, bismuth, antimony, cadmium, phosphates, and uranium. 

Industry and Manufacturing: Manufacturing is the economy’s leading export sector, 

accounting for 84 percent of total export revenues (US$158 billion in 2004) and about a quarter 

of gross domestic product. About a quarter of Mexico’s labor force is engaged in some type of 

industrial or manufacturing activity. The manufacturing sector was transformed by the 

liberalizing reforms of the late 1980s and early 1990s, which privatized hundreds of state 

enterprises and greatly expanded opportunities for foreign direct and portfolio investment. 

Manufacturing attracts about half of all foreign direct investment in Mexico, two-thirds of which 

is concentrated in the maquiladora sector, comprising more than 2,000 businesses employing 

1.13 million workers in 2004. Overall manufacturing output in 2004 was dominated by three 

activities: food, drink, and tobacco (29.5 percent); metals, machinery, and equipment (28.9 

percent); and chemicals, petrochemicals, rubber, and plastics (14.9 percent). Other major 

components of manufacturing output included textiles, clothing, and leather goods (6.3 percent); 

metals (5.2 percent; and paper products (3.5 percent). Principal industrial centers are located in 

and around the Mexico City metropolitan area, Monterrey, and Guadalajara. 

Energy: Mexico is the world’s sixth largest oil producer, extracting an average of 3.4 million 

barrels per day of crude oil in 2005. As of January 2005, Mexico had 14.6 billion barrels of 

crude oil reserves—the third largest reserves in the Western Hemisphere—mostly located in the 

Cantarell fields in the Gulf of Mexico. About half of Mexico’s crude oil production is consumed 

domestically, while the other half is exported—mainly to the United States. Over the past two 

decades, the oil sector’s share of total export revenues has fallen sharply as the economy has 

diversified and as an increasing share of production has been dedicated to meeting domestic 

demand. Crude oil exports accounted for 12 percent of total export revenues in 2004 versus 61 

percent in 1985. Although production has remained relatively constant in recent years, few new 

oil reserves have been discovered. Mexico’s state oil corporation, Petróleos de Mexico (Pemex), 

operates an extensive pipeline network consisting of approximately 453 pipelines spanning 4,700 

kilometers. 

In addition to crude oil, Mexico has 420 billion cubic meters of proven natural gas reserves. 

Since the late 1980s, Mexican demand for natural gas has outpaced production, which stood at 

37 billion cubic meters in 2004. Mexico also has 1.3 billion tons of recoverable coal reserves. 

During 2003 it produced 11.9 million short tons of coal while consuming 20.4 million short tons. 

Most coal consumption is used for electricity generation, while the remainder is used for 

steelmaking. Mexico has a single nuclear power plant, the 1,400-megawatt Laguna Verde plant 

near Veracruz. 

Mexico generated 209.2 billion kilowatt-hours of electric power in 2003: 83 percent by 

conventional thermal sources, 9 percent by hydroelectricity, 5 percent by nuclear power, and 3 

percent by renewable sources. The bulk of conventional thermal capacity in the national 

electricity grid consumes fuel oil, followed by coal and natural gas. The country consumed 193.9 
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16

billion kilowatt-hours of electric power in 2003. Demand is expected to grow by 6 percent per 

year during the next decade. 

Banking and Finance: Banking and finance is the most advanced component of the services 

sector, attracting about 25 percent of total foreign investment. Mexico has a central bank and six 

types of banking institutions: public development banks, public credit institutions, private 

commercial banks, private investment banks, savings and loans associations and mortgage banks. 

Other components of the financial system include securities market institutions, development 

trust funds, insurance companies, credit unions, factoring companies, mutual funds, and bonded 

warehouses. Since 1994 Mexico’s central bank (Banco de México) has been largely autonomous. 

The bank is governed by a five-member board composed of a chairperson or “governor” and four 

“subdirectors.” The governor serves a six-year term; subdirectors serve eight-year terms and are 

appointed on a staggered basis. All members are appointed by the president but once confirmed 

may not be removed except in cases of gross misconduct or incapacitation as outlined in the 

Central Bank Law. 

Services: Services (including financial services) make up the largest segment of the Mexican 

economy, accounting for 69.5 percent of gross domestic product (GDP) in 2005 and employing 

about 60 percent of the national workforce. In recent years, major transnational retailers have 

expanded their presence in the country. Merchandise counterfeiting and intellectual property 

rights crimes are pervasive within the informal retail sector, threatening the profitability of the 

formal retail sector. The tourism sector, which caters primarily to U.S. travelers, accounts for 

about 8 percent of GDP. Mexico is the primary foreign destination for U.S. travelers, receiving 

11.6 million U.S. visitors in 2004. 

Labor: During 2005, the labor force was estimated at 34.5 million (out of a total population of 

106.2 million). Approximately 1 million new workers enter the labor force annually; however, 

the Mexican economy typically creates only about half as many new jobs. The Mexican labor 

market is characterized by the existence of a large informal sector in which workers are mostly 

unskilled, do not pay taxes, and do not receive benefits, and a formal sector in which jobs 

generally require more skills, and working conditions and benefits are regulated by strict labor 

laws. The informal sector is estimated to make up between 40 and 65 percent of the total labor 

force. During 2005 Mexico reported a low unemployment rate of approximately 4 percent; 

however, real wages have stagnated during the past decade, and 25 percent of the workforce is 

believed to be underemployed. In 2003 the labor force was distributed by occupation as follows: 

services, 58 percent; industry, 24 percent; and agriculture, 18 percent. 

Foreign Economic Relations: Mexico’s extensive trade linkages to the United States dominate 

its foreign economic relations. During 2004 the leading markets for Mexican products in terms 

of percentage of total exports were the United States, 87.5 percent; Canada, 1.8 percent; Japan, 

1.1 percent; and Spain, 1.0 percent. Mexico’s leading suppliers in terms of percentage of total 

imports were the United States, 56.3 percent; China, 3.8 percent; Germany, 3.6 percent; and 

South Korea, 3.0 percent. Since the early 1990s, Mexico’s foreign economic relations have 

emphasized active participation in the World Trade Organization (WTO) and the negotiation of 

free-trade agreements (FTAs)—most notably the North American Free Trade Agreement 
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17

(NAFTA) with Canada and the United States in 1993. Mexico has entered into regional and 

bilateral FTAs involving more than 40 countries. 

Trade Balance: Since the late 1990s, the overall merchandise trade balance has been slightly 

negative, largely as a result of growing deficits with the European Union and Asia (mainly 

China). During 2005 Mexico’s total merchandise imports were valued at US$223.7 billion versus 

US$213.7 billion in exports Mexico’s trade deficit with the rest of the world is largely offset by a 

trade surplus with the United States. This surplus has grown steadily since the late 1990s, driven 

initially by the boom in manufacturing exports and, more recently, by high world oil prices. 

During 2004, Mexico’s trade surplus with the United States stood at US$53.7 billion. 

Balance of Payments: In recent years, Mexico has overcome a historical pattern of 

unsustainable high current account deficits. Since the late 1990s, the current account deficit has 

shrunk to sustainable levels of generally less than 3 percent of gross domestic product (GDP). 

Current transfers—made up largely of wage remittances from Mexicans living in the United 

States—have become an important contributor to Mexico’s external accounts, providing capital 

inflows estimated to be as much as 2.5 percent of GDP. In 2005 Mexico’s current account deficit 

was estimated at US$9 billion. 

External Debt: Total external debt was US$145 billion in 2005. At 21 percent of gross domestic 

product (GDP), Mexico’s external debt-to-GDP ratio is one of the lowest in Latin America. The 

debt-service ratio (the ratio of debt service to export earnings) has declined from 25.5 percent in 

2001 to an estimated 15.8 percent in 2005. 

Foreign Investment: Mexico is the second largest host of foreign direct investment (FDI) in 

Latin America after Brazil. During the 10-year period following the ratification of the North 

American Free Trade Agreement (1994–2004), Mexico attracted a cumulative US$148 billion in 

FDI, about 50 percent of which was invested in manufacturing and another 25 percent directed 

toward the financial services sector. Net portfolio investment has been rising since 2002; by mid2005, foreign holdings of government bonds totaled approximately US$10 billion, while foreign 

investment in the Mexican stock market exceeded US$85 billion. 

Foreign Aid: The World Bank provides expertise and financial support to Mexico. Presently, the 

bank is financing 32 projects in the country, with an average annual commitment of up to 

US$1.7 billion. The World Bank’s 2005–2008 Country Assistance Strategy (CAS) for Mexico 

projects loans totaling about US$4.8 billion during the strategy’s four-year timeline and is 

designed to support the government’s commitment to fighting poverty and inequality. 

Currency and Exchange Rate: Mexico’s currency is the peso (MXN). In July 2006, the 

exchange rate was approximately US$1=MXN11. 

Fiscal Year: Calendar year. 
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18

TRANSPORTATION AND TELECOMMUNICATIONS 

Overview: Mexico’s economy relies heavily on the country’s road network and maritime ports 

for the transportation of cargo. The extensive road system handles the bulk of domestic 

passenger and cargo surface transportation, while airports are struggling to keep up with the 

growth in international passenger travel. In recent years, the privatization of railroads and ports 

and the granting of toll road concessions have attracted substantial foreign investment and 

encouraged modernization of facilities. 

Roads: Mexico has one of the most extensive road networks in Latin America, linking nearly all 

areas of the national territory. In late 2004, the country had 365,000 kilometers of roads, 105,000 

kilometers of which were paved and 260,000 kilometers unpaved. The network includes 6,336 

kilometers of modern toll highways. Although extensive, much of Mexico’s public road system 

is in poor condition as a result of insufficient investment in maintenance and an over-reliance on 

heavy trucks to haul overland cargo. Roads handle 59 percent of total cargo transportation and 99 

percent of domestic passenger journeys. 

Railroads: Railroads transport 10 percent of total cargo and play only a minor role in passenger 

travel. The rail system consists of 19,510 kilometers of track, nearly all of which is made up of 

1.435-meter, standard-gauge line. The largest rail line historically has been the state-owned 

Mexican National Railways (Ferrocarriles Nacionales Mexicanos—FNM), which owns about 70 

percent of total track. During the late 1990s, the FNM was broken up into regional rail lines and 

privatized. The newly privatized entities were granted 50-year leases to operate on the rail 

system’s main routes. By 2004, 81 percent of total rail traffic was handled by private companies. 

Mexico City maintains a subway system comprising eight lines with 135 stations and a total 

route length of 158 kilometers. 

Ports: The maritime port system has grown rapidly from about 75 ports in the mid-1990s to 108 

ports in 2005 with the expansion of international trade. The system has experienced an influx of 

foreign capital as a result of the comprehensive privatization of port facilities begun during the 

1990s. The largest ports, located on the Pacific coast, include Manzanillo, Lázaro Cárdenas, 

Salina Cruz, Guaymas, and Mazatlán. Important ports on the Gulf Coast include Veracruz, 

Tampico, and Coatzacoalcos. During 2004 Mexican ports handled 266 million tons of cargo, 

including 120 million tons of petroleum and derivatives, 35 million tons of bulk mineral 

products, and 9 million tons of bulk agricultural products. Between 1997 and 2004, Mexico’s 

container ports doubled their cargo volume from 902,831 twenty-foot equivalent units (TEUs) in 

1997 to 1,902,560 TEUs in 2004. Passenger arrivals, driven by the U.S. cruise industry, nearly 

tripled from 2.3 million in 1997 to 6.3 million in 2004. Mexico’s ports handled 1,202 cruise ship 

arrivals in 2004. 

Inland Waterways: Mexico’s 2,900 kilometers of navigable rivers and coastal canals play only 

a minor role in the transportation system. 

Civil Aviation and Airports: Mexico’s civil aviation system is extensive and includes 227 

airports—35 of which are international airports—and approximately 1,500 airfields and airstrips 

nationwide. During 2005 Mexican airports handled 46 million passenger journeys, 27.8 million 
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19

of which were conducted on domestic airlines and 18.3 million on international airlines. The 

busiest airports are Mexico City (Benito Juárez—MEX), Guadalajara (Miguel Hidalgo y 

Costilla—GDL), Monterrey (General Mariano Escobedo—MTY), and Cancún (CUN). Despite 

recent capital expenditures on terminals and runways, the largest airports are struggling to meet 

rising demand for air transportation services. 

Telecommunications: Since the 1990s, telecommunications services have been transformed by 

privatization of the national telephone company and the advent of wireless technologies. 

Following the privatization of Teléfonos de México (Telmex) and the opening of the sector to 

other private carriers in the 1990s, fixed-line density rose from 6.4 lines per 100 in 1990 to 17 

lines per 100 in 2004. Availability of residential fixed-line service varies greatly by region; 

Mexico City and the more developed northern states experience much higher service densities 

than the eight poorest southern states. The continued high cost of fixed-line services, together 

with an incomplete build-out of the fixed-line network, has contributed to a proliferation of 

mobile telephone use. The number of mobile cellular telephone accounts rose from 14 million in 

2000 to more than 40 million in the first half of 2005. During 2004 the number of households 

with personal computers (PCs) stood at 137 per 1,000 residents. Paralleling telephone service, 

regional disparities are large; Mexico City and the northern states are well ahead of the south in 

home PCs per capita. During 2004 approximately 15 million Mexicans were classified as 

Internet users. Major telecommunications infrastructure includes 120 domestic satellite earth 

stations, 52 international stations and an extensive microwave radio relay network. 

GOVERNMENT AND POLITICS 

Political System: Mexico is a federal republic consisting of 31 states and a Federal District. 

During much of the twentieth century, Mexico was ruled by authoritarian governments under the 

control of the Institutional Revolutionary Party (Partido Revolucionaro Institucional—PRI). The 

PRI exercised hegemony over the political system while observing formal democratic 

procedures, such as regular elections, tolerance of opposition parties, and political campaigning. 

Mexico’s political system historically has concentrated power in the executive branch. By 

exercising strong leadership over the PRI party apparatus as well as their extensive constitutional 

prerogatives, Mexican presidents wielded formidable influence over public policy. Since 1997, 

however, when the first opposition-controlled Congress in Mexico’s modern history was voted 

into office, a more balanced relationship among the branches has developed. Following a series 

of political and electoral system reforms, during the 2000 elections the PRI lost its seven-decade 

monopoly on the presidency. The development of a three-party system at the national level has 

led to a more even distribution of power and has given rise to coalition-style politics. Mexican 

federalism has historically been weak. State and local governments rely heavily on the federal 

government for revenues. 

Constitution: Mexico’s formal government institutions are defined by the constitution of 1917, 

which is widely regarded as an expression of popular will that guarantees labor and civil rights, 

electoral democracy, and national independence. Inspired by both socialist and classical liberal 

political philosophy, as well as by earlier Mexican constitutions, the drafters prescribed a federal 

republic with separation of powers, recognized a broad range of political and social rights, and 
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20

treated many matters of public policy explicitly. Key provisions include Article 27, which, 

before being amended in 1992, imposed stringent restrictions on the ownership of property by 

foreigners and the Catholic Church and declared national ownership of the country’s natural 

resources; and Article 123, which affirms a variety of labor rights, including the right to organize 

and an eight-hour workday, and provides for the protection of women and minors in the 

workplace. Constitutional amendments may be passed with a two-thirds vote of both chambers 

of the federal Congress and ratification by a majority of the state legislatures. The constitution 

has been amended extensively since 1917. Major amendments include the granting of women’s 

suffrage in 1953, the easing of nationalist restrictions on foreign investment in 1992, and 

numerous electoral system reforms during the 1980s and 1990s. 

Branches of Government: The federal executive branch is headed by the president and 18 

cabinet-level ministers (secretaries). The president holds the formal titles of chief of state, head 

of government, and commander in chief of the armed forces. Presidents are elected directly by a 

simple majority of registered voters in the 31 states and the Federal District. Presidents serve a 

six-year term (sexenio) with no possibility of re-election; there is no vice president. If the 

presidential office falls vacant during the first two years of a sexenio, the Congress designates an 

interim president, who, in turn, must call a special presidential election to complete the term. If 

the vacancy occurs during the latter four years of a sexenio, the Congress designates a 

provisional president for the remainder of the term. The president has sole authority to appoint 

and dismiss cabinet secretaries—except for the attorney general, who must receive the consent of 

the Senate. 

The bicameral Congress is composed of a Senate and a Chamber of Deputies. The Senate’s 128 

seats are filled by a mixture of direct election and proportional representation (96 by direct 

election and 32 by proportional representation from party lists). In the lower chamber, 300 

deputies are directly elected to represent single-member districts, and 200 are selected by a 

modified form of proportional representation from five electoral regions. Senators are elected to 

six-year terms, and deputies serve three-year terms. All members of Congress are barred from 

immediate re-election but may serve nonconsecutive terms. The powers of Congress include the 

right to pass laws, impose taxes, declare war, approve the national budget, approve or reject 

treaties and conventions made with foreign countries, and ratify diplomatic appointments. The 

Senate addresses all matters concerning foreign policy, approves international agreements, and 

confirms presidential appointments. The Chamber of Deputies oversees all matters pertaining to 

the government’s budget and public expenditures. Each legislative chamber has a number of 

committees that study and recommend bills. If there is disagreement between the chambers, a 

joint committee is appointed to draft a compromise version. 

The judicial branch is divided into federal and state systems. Additionally, justice of the peace 

courts are available at the municipal level. Federal district courts exercise broad jurisdiction over 

federal crimes and writ of injunction (amparo) suits and civil controversies regarding the 

enforcement or application of federal law or international treaties, among others. The rulings of 

federal district courts may be reviewed by collegiate and unitary circuit courts and by the 

Supreme Court. In 2005 the federal judicial system had 172 collegiate circuit courts (covering 29 

circuits), 62 unitary circuit courts, and 285 district courts. The Supreme Court is made up of 11 
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21

justices (including the chief justice). The court holds biennial sessions in which it is divided into 

two chambers: Civil and Criminal Affairs and Administrative and Labor Affairs. 

Supreme Court justices are appointed by a two-thirds vote of the Senate from among a list of 

candidates submitted by the president. In the event that two-thirds of the Senate cannot agree on 

an appointee, the president may fill the vacancy without Senate approval. Justices serve a single 

15-year term without the possibility of reappointment. The chief justice is elected from among 

the sitting justices by a collegial vote of the membership. He or she presides over the court for a 

term of four years. Chief justices may not serve consecutive terms but may be reelected by their 

colleagues during their 15-year tenure on the court. District and circuit judges are appointed by 

the Federal Judicial Council, a quasi-independent judicial branch agency chaired by the chief 

justice of the Supreme Court. The seven-member council is in charge of carrying out judicial 

career laws, overseeing judicial functioning, and selecting judges at all levels below the Supreme 

Court. In addition to the chairmanship, three seats are occupied by judges appointed by the 

Supreme Court, two seats by notable judicial scholars appointed by the Senate, and one seat by a 

presidential appointee. Except for the chief justice, all council members serve a single five-year 

term. 

Administrative Divisions: Mexico is a federal republic with 31 states and a Federal District 

encompassing Mexico City and its immediate environs. Approximately 2,000 municipalities are 

legally recognized. 

State and Local Government: Each of Mexico’s 31 states has its own constitution modeled on 

the national charter and has the right to legislate and levy taxes other than interstate customs 

duties. Following the federal organization at the national level, state and local governments also 

have executive, legislative, and judicial branches. The state executive branch is headed by a 

governor who is directly elected for a six-year term and may not be reelected. State legislatures 

are unicameral, consisting of a single Chamber of Deputies that meets in two ordinary sessions 

per year with extended periods and extraordinary sessions when needed. Deputies serve threeyear terms and may not be immediately reelected. Legislative bills may be introduced by the 

deputies, the state governor, the state Superior Court of Justice, or a municipality within a given 

state. Governors appoint the justices of the Superior Court of Justice with the approval of state 

legislatures. These magistrates, in turn, appoint all lower state court judges. Municipal 

governments, headed by a mayor or municipal president (regente) and a municipal council 

(ayuntamiento), are popularly elected for three-year terms. 

Judicial and Legal System: Mexico’s judicial system and legal procedures, largely derived 

from Spanish and Napoleonic civil and criminal codes, reflect only minimal influence from the 

common law tradition. The system is characterized by strict adherence to legal codes and 

minimal jurisprudence. The most powerful juridical instrument is the writ of amparo (literally, 

“refuge”), a writ of injunction that can be invoked against acts by any government official. The 

trial system consists of a series of fact-gathering hearings during which the court receives 

documentary evidence or testimony, after which a judge in chambers reviews the case file and 

issues a final written ruling. The record of the proceeding is not available to the general public; 

only the parties involved have access to the official file and then only by special motion. The law 

provides for the right of the accused to attend the hearings and challenge the evidence or 
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testimony presented. The law also guarantees the right to an attorney, although in actual practice 

the understaffed public defender system is characterized by low professional standards, and as a 

result, most indigent defendants are inadequately represented. 

Electoral System: Article 41 of the constitution of 1917 and subsequent amendments regulate 

electoral politics in Mexico. Suffrage is universal for all citizens 18 or older, and voting is 

compulsory, although this provision is rarely enforced. The constitution enshrines the principle 

of direct election by popular vote of the president and most other elected officials. Executive 

officeholders may not be reelected, and legislators may not serve consecutive terms. Ordinary 

elections are held every six years for president and members of the Senate and every three years 

for deputies. Gubernatorial elections are distributed throughout a six-year presidential term 

(sexenio), so that no more than six governorships are contested in any given year. Elections at the 

federal, state, and local levels are administered by the Federal Electoral Institute (Instituto 

Federal Electoral—IFE). The IFE is a semi-autonomous organization established by the 1990 

electoral code, consisting of representatives from government and the major political parties. 

During the 1990s, reforms of the IFE strengthened its capacity to serve as a nonpartisan electoral 

commission. These reforms included the introduction of majority nonpartisan representation (six 

out of 11 seats) on the IFE governing board, a legal framework for Mexican and foreign 

observers to monitor elections, and an independent audit of the national voter list. Voting 

procedures and requirements incorporate numerous safeguards against fraud, including 

mandatory voter registration cards bearing photo identification and fingerprints. An autonomous, 

seven-member Electoral Tribunal adjudicates election disputes. 

Politics and Political Parties The Institutional Revolutionary Party (Partido Revolucionario 

Institucional—PRI) was the country’s preeminent political organization from 1929 until the early 

1990s. Historically, the PRI has been ideologically a center-left party, blending nationalism with 

mildly redistributionist public policies. Since its founding, the PRI has portrayed itself as a 

champion of workers and landless peasants. However, during the mid-1980s the “technocratic” 

wing of the party, which favored market-oriented reform, became dominant over its populist 

wing. Over the course of three general election cycles (1982, 1988, and 1994), the PRI’s 

leadership selected presidential candidates primarily based on their ability to implement marketoriented reforms. This trend alienated much of the PRI’s populist “político” wing, prompting 

many party members to defect to organizations farther to the left. 

Until the early 1980s, the PRI’s position in the Mexican political system was hegemonic, and 

opposition parties posed little or no threat to its power base or its near monopoly of public office. 

This situation changed during the mid-1980s as opposition parties of the left and right began to 

seriously challenge PRI candidates for local, state, and national offices. On the right, the 

National Action Party (Partido de Acción Nacional—PAN) has made the greatest inroads into 

national politics—most notably by attaining the presidency in 2000 and ending seven decades of 

PRI control over the executive branch. The PAN emerged as a conservative reaction to the 

nationalizations and land confiscations undertaken by PRI governments in the 1930s. Its power 

base is heavily concentrated in the wealthier states of the north and center of the country. The 

PAN resembles a standard Christian Democratic party, deriving its early support primarily from 

the Roman Catholic Church, the business sector, and other groups alienated by the left-wing 

populist policies of past PRI governments. On the left, the Democratic Revolutionary Party 
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(Partido Revolucionario Democrático—PRD) emphasizes social welfare concerns and opposes 

most economic reforms implemented since the mid-1980s. Although it encompasses much of the 

rank and file of the former communist and socialist parties, the PRD is controlled by former PRI 

leaders. Several minor parties also are represented in the Congress and in state and local 

governments: Labor Party (Partido del Trabajo—PT), Mexican Green Ecologist Party (Partido 

Verde Ecologista Mexicano—PVEM), New Alliance Party (Partido Nueva Alianza), and Social 

Democratic and Rural Alternative Party (Partido Democracia Social y Alternativa Rural). 

Mass Media: Mexico is considered the media capital of Spanish-speaking Latin America. In 

2004 the country had approximately 300 daily newspapers, 1,300 radio stations, and 460 

television stations, most under private ownership. Television is the most influential medium; a 

majority of stations are affiliated with either the Televisa or Tele Azteca national networks. The 

press is largely free; however, liberal defamation and libel laws have been widely cited as a 

constraint on press freedoms. Violence against journalists by drug smuggling gangs poses a 

growing concern, especially in northern Mexico. 

Foreign Relations: Traditionally, Mexico has sought to advance its interests abroad and project 

its influence largely through moral persuasion. In particular, Mexico has been a champion of the 

principles of nonintervention and self-determination. However, during the administration of 

President Vicente Fox Quesada (2000–2006), Mexico departed from its traditional foreign policy 

by supporting United Nations (UN) resolutions critical of Cuba’s human rights record and by 

taking a more active stance on Western Hemisphere regional issues. Mexico has also resisted 

efforts by the government of Venezuela to undermine a proposed Free Trade Area of the 

Americas. While the United States and Mexico are often in agreement on foreign policy issues, 

several differences remain. Mexico collaborates with the United States to combat terrorism and 

organized crime but opposed U.S. and British efforts to craft a UN Security Council resolution 

authorizing military force against Iraq in 2003. During President Fox’s term, Mexico has sought 

to negotiate a guest worker program that would allow greater legal migration to the United 

States. However, prospects for an immigration agreement were dealt a setback in the aftermath 

of the September 11, 2001, terrorist attacks and the ensuing concern over U.S. border security. 

Membership in International Organizations: Mexico is a member of numerous international 

organizations: Agency for the Prohibition of Nuclear Weapons in Latin America and the 

Caribbean (OPANAL), Asia Pacific Economic Cooperation (APEC) forum, Central American 

Bank for Economic Integration (BCIE), Bank for International Settlements (BIS), Caribbean 

Development Bank (CDB), Council of Europe (CE) (observer), European Bank for 

Reconstruction and Development (EBRD), Food and Agriculture Organization (FAO), Group of 

Three (Colombia, Mexico, Venezuela—G–3), Group of Six (G–6), Group of Fifteen (G–15), 

Group of Twenty-four (G–24), Inter-American Development Bank (IADB), International Atomic 

Energy Agency (IAEA), International Bank for Reconstruction and Development (IBRD), 

International Civil Aviation Administration (ICAO), International Confederation of Free Trade 

Unions (ICFTU), International Criminal Court (ICC), International Criminal Police Organization 

(Interpol), International Development Association (IDA), International Federation of Red Cross 

and Red Crescent Societies (IFRCS), International Finance Corporation (IFC), International 

Fund for Agricultural development (IFAD), International Hydrographic Organization (IHO), 

International Labor Organization (ILO), International Maritime Organization (IMO), 
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International Monetary Fund (IMF), International Olympic Committee (IOC), International 

Organization for Migration (IOM), International Organization for Standardization (ISO), 

International Red Cross Movement (ICRM), International Telecommunication Union (ITU), 

Inter-Parliamentary Union (IPU), Latin American Economic System (LAES), Latin American 

Integration Association (LAIA), North American Free Trade Agreement (NAFTA), NonAligned Movement (NAM) (observer), Nuclear Energy Agency (NEA), Organization for 

Economic Cooperation and Development (OECD), Organization for the Prohibition of Chemical 

Weapons (OPCW), Organization of American States (OAS), Permanent Court of Arbitration 

(PCA), Rio Group (RG), United Nations (UN), United Nations Conference on Trade and 

Development (UNCTAD), United Nations Educational, Scientific and Cultural Organization 

(UNESCO), United Nations High Commissioner for Refugees (UNHCR) executive committee, 

United Nations Industrial Development Organization (UNIDO), United Nations Institute for 

Training and Research (UNITAR), United Nations Monitoring, Verification, and Inspection 

Commission (UNMOVIC), Universal Postal Union (UPU), World Confederation of Labor 

(WCL), World Customs Organization (WCO), World Federation of Trade Unions (WFTU), 

World Health Organization (WHO), World Intellectual Property Organization (WIPO), World 

Meteorological Organization (WMO), World Tourism Organization (WToO), and World Trade 

Organization (WTO). 

Major International Treaties: Mexico is a party to numerous arms control, commercial and 

environmental treaties, as well as several regional and bilateral free-trade agreements: Act of 

Chapultepec, Biological Weapons Convention, Basel Convention on the Trans-boundary 

Movement of Hazardous Wastes, Chemical Weapons Convention, Convention on Biological 

Diversity, Convention on the International Maritime Organization, Convention to Combat 

Desertification, Convention on International Trade in Endangered Species, Framework 

Convention on Climate Change (UNFCCC), General Agreement on Tariffs and Trade (GATT), 

Geneva Protocol, Hague Conventions, Inter-American Democratic Charter, Kyoto Protocol to 

the UNFCCC, Law of the Sea Treaty, Limited Test Ban Treaty, Mexico-Bolivia Free Trade 

Agreement (FTA), Mexico-Chile FTA, Mexico-Colombia-Venezuela (Group of Three) FTA, 

Mexico-Costa Rica FTA, Mexico-Nicaragua FTA, Mexico-Northern Triangle (Guatemala, El 

Salvador, Honduras) FTA, Mexico-Israel FTA, Mexico-European Community FTA, North 

American Agreement on Environmental Cooperation, North American Free Trade Agreement 

(NAFTA), Nuclear Non-Proliferation Treaty (NPT), Renunciation of War Treaty, Rio 

Declaration on Environment and Development, Terrorism Prevention Convention, Treaty for the 

Prohibition of Nuclear Weapons in Latin America (Treaty of Tlatelolco), United Nations 

Conference on Disarmament, United Nations Convention on the Law of the Sea, Rome Statute of 

the International Criminal Court, Vienna Convention for the Protection of the Ozone Layer, and 

World Trade Organization (WTO) Agreement. 

NATIONAL SECURITY

Armed Forces Overview: Mexico maintains one the smallest militaries in the Western 

Hemisphere in per-capita terms. During 2004 it had 192,700 active armed forces personnel and 

300,000 reservists. Active-duty personnel are assigned to the various services: army, 144,000; 

navy, 37,000 (including 8,000 marines); and air force, 11,770. 
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Foreign Military Relations: Historically, relations between the military establishments of 

Mexico and the United States have not been close. Cooperation peaked for a brief period during 

and after World War II. In the Cold War atmosphere that followed, however, Mexico opposed 

U.S. concepts of regional security. During the late 1980s, relations between the Mexican and 

U.S. military establishments improved as cooperative efforts expanded in the fight against illicit 

drugs. Numerous Mexican officers receive training in the United States and are well acquainted 

with U.S. military doctrine, but on the whole, the Mexican armed forces are less influenced by 

the U.S. military than the armed forces of other countries in Latin America. 

External Threat: Mexico has no foreign nation-state adversaries and little ambition to impose 

itself upon other nations. It repudiates the use of force to settle disputes and rejects interference 

by one nation in the affairs of another. Although it has not suffered a major terrorist incident, 

Mexico considers itself a potential target for international terrorism. 

Defense Budget: In 2005 Mexico’s defense budget was US$3.1 billion or about 0.4 percent of 

gross domestic product. 

Major Military Units: The principal units of the Mexican army are nine infantry brigades and a 

number of independent regiments and infantry battalions. The main maneuver elements of the 

army comprise three corps, each consisting of three infantry brigades, all based in and around the 

Federal District. Distinct from the brigade formations, independent regiments and battalions are 

assigned to zonal garrisons. Infantry battalions, each composed of approximately 300 troops, 

generally are deployed in each zone, and certain zones are assigned an additional motorized 

cavalry regiment or an artillery regiment. The air force is organized into two wings and 10 air 

groups, as well as an airborne brigade. The air force’s principal base is located at Santa Lucía in 

the state of México. Other major air bases are located in the states of Baja California Sur, 

Oaxaca, Quintana Roo, Veracruz, and Yucatán. The navy’s operational command is divided 

between the nation’s two coasts. The Pacific fleet is headquartered at Acapulco; the Gulf of 

Mexico coast command is located at Veracruz. Each command has three naval regions. There are 

17 naval zones, one for each coastal state; some are subdivided into sectors. In addition to the 

surface fleet, the navy maintains an aviation arm and a marine force. 

Major Military Equipment: The army is equipped with 264 reconnaissance vehicles, 

approximately 860 armored personnel carriers, 194 towed artillery, five self-propelled artillery, 

1,575 mortars, 30 antitank guns, eight antitank guided weapons, 80 air defense guns, and an 

unspecified number of surface-to-air missiles. The navy inventory includes three destroyers, 

eight frigates, 109 patrol and coastal combatants, and 19 support and miscellaneous vessels. 

Naval aviation maintains 150 unarmed helicopters and eight combat aircraft. The navy’s marine 

component is equipped with towed howitzers, mortars, and amphibious vehicles. The air force 

has 107 combat aircraft and 71 armed helicopters. 

Military Service: The navy and air force are all-volunteer services, while the 144,000-strong

army includes 60,000 conscripts. Army conscripts are selected by lottery and are obligated to 

serve for one year. 
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Paramilitary Forces: The Federal Preventive Police (Policía Federal Preventiva–PFP) under the 

Public Security Secretariat (Secretaría de Seguridad Pública–SSP) combats organized crime and 

domestic insurgencies. The PFP, which relies heavily on reassigned military police and 

intelligence personnel, includes several specialized tactical and investigative elements, an 

independent intelligence arm, the federal highway police, a border and port security branch, and 

an internal affairs component. The PFP currently numbers approximately 11,000 personnel and 

is projected to expand gradually toward a full strength of 15,000 to 20,000 agents. 

Foreign Military Forces: None present. 

Military Forces Abroad: Consistent with its foreign policy of non-intervention in the affairs of 

other states, Mexico has declined United Nations (UN) requests for peacekeeping troops. 

However, in 2004 the Mexican Foreign Ministry stated that Mexico would be willing to 

contribute non-combat personnel to UN peacekeeping missions. Mexico has dispatched unarmed 

troops to Central America and Indonesia to provide humanitarian relief in the aftermath of major 

natural disasters. In September 2005, a Mexican army convoy delivered humanitarian supplies to 

survivors of Hurricane Katrina in Texas. Mexico maintains military attachés in several friendly 

foreign capitals. 

Police: Police forces, numbering 331,000 officers in 2005, exist at the federal, state and 

municipal levels. The paramilitary Federal Preventive Police (Policía Federal Preventiva—PFP) 

is the main enforcement arm of the federal government. The Federal Investigation Agency 

(Agencia Federal de Investigación–AFI) under the Office of the Attorney General is a 

multiskilled investigative agency comparable to the U.S. Federal Bureau of Investigation (FBI). 

The Special Unit Against Organized Crime (Unidad Especializada Contra la Delicuencia 

Organizada—UEDO), an investigative arm of the Office of the Attorney General, was specially 

created to combat organized crime. 

Internal Threat: Mexico faces numerous internal threats to public safety, most notably from 

established domestic drug trafficking networks that transport and distribute South American 

cocaine and other illicit substances destined for the United States. The country’s heavily armed, 

territorially organized drug trafficking networks regularly launch sophisticated, lethal attacks on 

police, rival drug gangs, journalists, and elected officials. Street crime and targeted crimes such 

as kidnapping for ransom are common in major cities. Politically inspired domestic insurgencies 

pose a minor, but persistent threat to public safety, mainly in the remote, mountainous zones of 

western and southern Mexico. 

Terrorism: As of the spring of 2006, Mexico had not experienced a major terrorist incident, 

although some drug trafficking gangs have begun to employ high-powered military-grade 

weapons in their attacks. Mexico historically has been a haven for Latin American and Spanish 

militant groups, including the Basque Fatherland and Liberty (ETA) and Revolutionary Armed 

Forces of Colombia (FARC) terrorist organizations. Increased intelligence and law enforcement 

cooperation between Mexico and the governments of Colombia and Spain in recent years has 

helped reduce the presence of these groups in the country. Given its status as a major U.S. 

commercial partner and ally against terrorism, Mexico considers itself a potential target for 

attacks by the al Qaeda terrorist network. Since the 2001 terrorist attacks on the United States, 
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Mexico has upgraded border security and deployed its armed forces at critical infrastructure sites 

throughout the country. 

Human Rights: According to the U.S. Department of State, during 2005 the government of 

Mexico generally respected and promoted human rights at the national level; however, violations 

persisted at the state and local level. Government efforts to improve respect for human rights 

were offset by a deeply entrenched culture of impunity and corruption, particularly among 

elements of the law enforcement community. As in much of Latin America, prison conditions 

generally are poor. The law prohibits discrimination based on race, gender, disability, or religion. 

Although the government continued to make progress enforcing these provisions, significant 

problems, particularly violence against women, persisted. There was a marked increase during 

the year in narcotics trafficking-related violence, especially in the northern border region.