In today"s borderless economy, Mexico faces enormous challenges. A decade after the enactment of the North American Free Trade Agreement (NAFTA), Mexico has benefited from free trade but problems remain if it is to compete effectively with the rest of the world. On the way to establishing itself as a middle-income country, it currently has the highest per capita income in Latin America, and a literacy rate of over 90%. Access to clean water is available to over 85% of the population and life expectancy at birth has risen to almost 74 years. With abundant natural resources, including oil, Mexico"s export position is favorable. Manufacturing jobs are growing and foreign investment has increased. All of this bodes well for the future of Mexico.

             Mexico has come a long way from the catastrophic financial crisis of 1994-1995, when millions of Mexicans were thrust into poverty and life savings were wiped out. Two million jobs were eliminated. The early days of NAFTA had failed to benefit Mexico as expected, and most of the manufacturing exports still came from the maquiladora sector along the northern border with the U.S. A corrupt and unstable political environment limited foreign investment. In January 1995, President Clinton was motivated to provide a $47 billion bailout of the Mexican economy.

             Today, foreign investment is on the rise. The maquiladora sector no longer accounts for the bulk of exports. Manufacturing facilities, while still concentrated in northern Mexico, are spreading out to other parts of the country. The low average wage, of less then two dollars per hour, is a strong inducement to establishment of foreign facilities, particularly outside of the northern area, where the unemployment rate is close to zero. Not only is foreign investment coming from the U.S. and Canada, but also from Europe and Asia, as we see a shift from investment in Asia. The political climate has improved and Mexico is now perceived as a more stable platform for investment.