Since the declaration of its independence and until the end of World War Two, Mexico went through periods of imperialism, dictatorship, democracy, political reform, civil wars, revolutions, and border conflicts with its neighbouring countries. Following World War Two, the government focused on promoting the country’s economic growth. As a result, from the mid-1940s through to the 1970s, Mexico generally enjoyed considerable economic expansion, especially in industry. B y the mid 1970s, Mexico was a major petroleum producer. However, in the 1980s the country had accumulated a huge external debt because of the government’s unlimited borrowing and reliance on the strength of its petroleum revenues. When petroleum prices fell, the economy suffered severe restrictions and instability. In the early 1990s, debt relief, diversification and privatization of the economy, and foreign investment showed positive effects, and the growth rate returned to historic levels. In 1994, Mexico joined Canada and the United States in the North American Trade Agreement (NAFTA) which will phase out all oil tariffs over a 15-year period. But a new crisis arose with the collapse of the peso in the mid-1990s and forced the adoption of harsh austerity measures. In 1995, the United States agreed to prevent the collapse of Mexico's private banks, but in compensation, the Americans won virtual veto power over much of Mexico's economic policy. The economy again went into recession in 2001, in large part because of the economic downturn in the United States. The Mexican government plays a major role in planning the economy and owns and operates some basic industries (including petroleum).⁴²

The majority of the population works in the trade and services sectors (Table 7) and a comparatively smaller proportion works in agricultural activities. There is, however, a considerable percentage of underemployment.

Table 7: Summary of Mexican economic profile⁵⁸ (2002 estimates)

GDP/PPP59	$924.4 billion
GDP per capita	$8.900
Inflation	6.4%.
Unemployment (urban)	3% (plus considerable underemployment)
Labor force (2000 estimates)	39.8 million (2000)
Natural resources:	petroleum, silver, copper, gold, lead, zinc, natural gas, timber
Agriculture (20%)(1998 estimates)	corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products ( Arable land: 13%)
Industries ( 24%) (1998 estimates)	food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism.
Services (56%) (1998 estimates)	-