Business Brief: Mexico

Conversis’ business briefs are a series that give you a quick summary of the social, political, economic and cultural news that you need to be aware of if you’re doing business in a foreign country.

Here’s a snapshot of the information you get in a business brief.

Is Mexico a good country to do business in now?

There are definitely good money-making opportunities to be had in Mexico, but with corruption and crime still serious and chronic problems, any business dealings should be considered carefully.

Here’s why.

Mexico is a diverse nation, known for natural splendour, rich culture as well as great poverty, pollution and urban blight. The nation has made an impressive recovery from a deep recession in the 1990s, and increasing trade with North America is creating economic opportunities by opening doors for business investment. Foreign direct investment climbed nearly 30 per cent in the first six months of 2010 from a year earlier.
Ongoing social and economic concerns include low real wages, underemployment for large segments of the population, inequitable income distribution, and few advancement opportunities for the predominately Amerindian population in the impoverished southern states. In the four years since President Calderon declared his war on drug cartels, 28,000 people have died in drug-related violence.

Fast Facts

Population: 114.8 million

Language/s: Spanish

Religion/s: Christian; Roman Catholic 76.5%

Land area: 1.96 million square km

Currency: Peso

Capital: Mexico City

Internet domain: .mx

International dialing code: +52

Economic indicators: Real GDP growth: 4.2, GDP per capital (US$): $8,896.92

Economy

Mexico’s economy depends to a large extent on remittances sent home from Mexicans living and working in the United States, so the Mexican economy suffered in the global economic downturn. According to the OECD, however, a vigorous recovery began in 2009 on the back of strong export growth. The reliance on exports to the US and remittances from the US remains a risk as the US recovery weakens.

Politics

Mexico is a federal republic, led by a President who is elected by the people for a six-year term and serves as both head of government and of state. Legislative power is vested in the two chambers of the Congress of the Union, and the judiciary is independent of executive and legislative power. The Institutional Revolutionary Party, or PRI, dominated Mexican politics for 70 years, until the 1997 elections saw a resurgent opposition break what was in effect a one-party system with a democratic façade.
The election of the current President, Felipe Calderon of the conservative National Action Party, was accompanied by huge controversy and months of legal wrangling as he won with a lead of less than one percentage point. He has vowed to tackle poverty and to fight violent crime and corruption.

Doing business

Follow these tips when conducting business in Mexico:

• Business appointments are required and should be made at least two weeks in advance. Reconfirm the appointment when you arrive in Mexico.
• Punctuality is important, although your Mexican counterparts may be up to 30 minutes late.
• Men should wear conservative, dark suits and women should wear business suits or conservative dresses.
• Business cards are exchanged during introductions with everyone at the meeting. One side of your card should be in Spanish and should contain both your professional and educational qualifications. Always present your business card with the Spanish side facing the recipient.
• Have all written material available in both English and Spanish. If you don’t speak Spanish, hire an interpreter.
• The initial meeting is generally with someone of high stature, so it is important that your delegation include an upper-level executive. After the initial meeting, the senior executive may not attend meetings.

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Read Business briefs: Mexico plus 16 other business briefs here

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