Even though Mexico is not the largest country in South America it is one of the more prominent countries in the region due to its close proximity to the US and its vantage point between North America and South America. As a consequence, the country has very close links with all areas of South America and North America and is a vital trade route for many companies. But what does Mexico have to offer someone looking to move to the region for a new life?
Where is Mexico?
As we mentioned above, Mexico is situated between the United States of America, Guatemala, Belize , the Pacific Ocean, the Caribbean Sea and the Gulf of Mexico. It has a population approaching 111 million and covers almost 760,000 mi.² making Mexico the fifth largest country in the Americas, the 14th largest independent state in the world and 11th most populous country on the planet. It is to all intense and purposes the capital of the Hispanic movement with the largest Hispanic population in the world.
It is the relatively unique position of Mexico in the world, and in particular in the Americas, which is attracting the attention of businesses and expats.
The weather in Mexico
While often seen as the gateway between North America and South America, many people will be surprised to learn that the vast majority of Mexico is actually in North America. However, the country itself is split by the Tropic of Cancer which effectively divides the country into two very different climates. Areas north of the Tropic of Cancer will experience cooler temperatures during the winter months and relatively warm summers. Those areas south of the Tropic of Cancer will experience constant temperatures throughout the year although these will vary depending upon the elevation of the area.
Not only does the temperature in Mexico vary from area to area, but there is significant variation in the height above sea level. When you also take into account the two mountainous ranges which take up part of Mexico it is no surprise to learn that the country itself offers one of the widest variations in climate in South America. In simple terms, northern Mexico is the area dominated by hot temperatures and deserts while the southern area is very different with snowfall on the high mountains and significantly lower temperatures throughout the year compared to the north.
Working in Mexico
Inadvertently, the Mexican economy is often thought of as fairly weak and relatively unattractive for international businesses and expats, but nothing could be further from the truth. The economy of Mexico is actually the 11th largest in the world and while there have been periods of economic crisis and downturns over the years, like so many other countries in South America, political stability and financial economic growth are now moving hand in hand. Recently we saw Mexico sovereign debt receive one of the higher credit ratings from the likes of Moody’s and Fitch which is a perfect reflection of the ever-changing and growing economic climate of the region.
The Mexican economy is to all intents and purposes a free-market and has attracted significant interest in the industrial and services sector. When you also take into account significant expansion and investment in areas such as ports, railroads, telecommunications, electricity generation, natural gas distribution and airports it is not difficult to understand why the economy is so prosperous.
The economy has for some time been dominated by the car manufacturing faction industry and the very close relationship with United States of America. However, unlike many “developing” countries, Mexico is not just a production and distribution center for the worldwide car industry, it is actually an area of the world with significant investment in technology and production lines. This is what has effectively separated Mexico from many other “developing” countries and when you consider the likes of General Motors, Ford, Chrysler, Toyota, Honda, BMW and Mercedes-Benz have strong links to Mexico, it is easy to see that the country has massive potential for the future.
The country is also prominent in the area of cement and building not to mention the fact it houses the second largest Coca-Cola bottling plant in the world. When you also take into account the ever growing tourism industry in and around Mexico there is much to see and much hope for the future.
Transport network in Mexico
Many years ago it was realised that in order for Mexico to be prosperous in the future there needed to be significant investments in an internal transport network and an external airport sector. Thankfully this is something which the country has never been short of, internal investment, and Mexico now boasts in excess of 72,000 miles of paved roadway and approaching 7,000 miles of multilane freeways and expressways. The country was also one of the first in the Americas to adopt a useful internal rail network which now boasts nearly 20,000 miles of track.
When you also take into account the fact that Mexico has approaching 2,000 airports, with Mexico City International Airport the largest in Latin America and the 44th largest in the world, not to mention the 30 domestic airline companies operating from Mexico there will be no problems finding a flight or a way to the region. After years of investment in the internal transport network there is no doubt that the country is now benefiting from the foresight of previous government ministers.
Major areas of Mexico
Mexico is one of largest countries by land mass in the world and as such has a number of prominent cities which are attracting the attention of expats and businesses around the world. So what are the more prominent areas and cities of Mexico?
Mexico City is the largest city in Mexico with a population of over 21 million, far in excess of the second-place city which is Guadalajara. The city itself is composed of a number of boroughs and municipalities which bring together this massive area of Mexico which is the effective hub of the country.
The economy of Mexico City, and greater Mexico City, has undergone a major change over the last 50 years moving from a predominantly industrialised economy to a services-based economy. Just prior to this changeover, which occurred around the 1980s, over 50% of the workforce was employed in the industrial sector. This has now changed to around 70% employment in the services sector with areas such as trade, financial services, insurance companies, telecommunications, transportation and informatics now amongst the major business sectors.
It is this ability to adapt and react to the changing economic environment which has seen Mexico City prosper, even though the overall input to GDP has fallen to around 21% of late.
While Guadalajara is the second-largest area in Mexico, with a population of 4.3 million (including the surrounding regions), it is well behind the 21 million plus population of Mexico City. Situated towards the west coast of Mexico this is an area of the country which is very prominent in commerce and trade with other areas of Mexico. Due to its relative strength in the trade sector there have been significant property projects completed, and more ongoing, within the city of Guadalajara and the surrounding regions.
With a population of just over 3.9 million the area of Monterrey is very prominent within the Mexican economic layout although as with any other city in Mexico, it does no compare with the strength of Mexico City. While the near 4 million population figure takes into account the surrounding areas, the economy in the city of Monterrey is dominated by the likes of steel, cement, glass, auto parts and brewing, like so many other areas of Mexico.
It is interesting to see that, like so many other cities in Mexico, there is a history which goes back to the 1600s yet Mexico City still sees the lion’s share of internal and international investment in the country. While this is unlikely to change in the short to medium term, there is no doubt that areas such as Monterrey are fighting to attract the attention of investors.
The region of Puebla has a combined population of around 2.6 million with over 1.6 million inhabiting the city of Puebla itself. While comfortably in the top four most highly populated areas of Mexico and with a history which goes back to the early 1600s yet again the automotive industry is a prominent employer in the region with the likes of Volkswagen very visible. The region has historically always been strong in the area of agriculture with crops such as corn, beans, wheat, oats, avocados, pears, apples and peaches, although more recently industries such as basic metals, chemicals, electronics and textiles have come more into play.
The cost of living in Mexico
While there is no doubt that the general economy of Mexico has grown dramatically over the last few years there’s also little doubt that this prosperity has not been shared amongst the whole population. As a consequence, the standard of living and cost of living across Mexico can vary widely although the likes of Mexico City are obviously some of the more expensive areas in which to live. However, on the whole, compared to countries such as the UK the cost of living in Mexico is relatively low and it is possible to live a relatively high standard of living on UK income and UK wages.
It is also the fact that many of the food products sold in Mexico are farmed locally which has allowed prices to remain relatively low with no import costs and relatively small transportation costs. However, the relatively cheap cost-of-living in Mexico is something which you may well have to investigate in great detail as there are large variations in both the standard of food/goods and the cost of food/goods. Finding an acceptable balance between the two is the key to enjoying a good standard of living for relatively small amounts of money.
The future of Mexico
Mexico has always had a close association with the United States of America and this is likely to remain for time and a day. However, there is also no doubt that the Mexican economy is stronger today than it ever has been despite the collapse of the worldwide economy and the USA in particular. The ability to enlarge its trade partner base and also attract the attention of international investors to the region will play a major role in the future prosperity of Mexico – the base is already there and the signs are good.
Mexico has a reputation and an image which is often shattered when people visit the region and see exactly what is on offer. As we mentioned above, even the climate of Mexico can be very different to that stereotypical image given in the worldwide media although the north of Mexico is very hot, the south of Mexico is nowhere near the same type of climate. As a consequence, the large variations in the weather in Mexico offer a number of alternatives for those looking at a new home for the future.
As with so many other South American countries, political stability and financial stability have been at the centre of recent growth in the economy. However, it is also worthwhile remembering that previous governments have invested significant amounts of money in the transportation network within Mexico which is now starting to pay major benefits. It is this forward thinking which will keep Mexico moving ahead in the future and will attract the attention of overseas companies and expats. This is a country which has for many years been towards the bottom of the expat visit list but is now becoming more popular.
Against this background of economic prosperity in the region it is also worth remembering that the relative wealth of individuals in Mexico does vary wildly and there is still a major problem with poverty. However, hopefully as the Mexican economy continues to prosper we should see the benefits of this growth shared amongst those at the bottom end of the income scale.