POVERTY &

INEQUALITY
IN MEXICO

Background

Full name: United Mexican States

Population: 120.8 million (2012)
Capital: Mexico City
Life expectancy: 75 years (men), 80 years
(women) (UN)
Monetary unit: 1 peso = 100 centavos
GNI per capita: US $9,240 (World Bank, 2011)
GDP (current US$): $1.178 trillion (2012)
Income level: Upper middle income

Causes of Poverty and Inequality

Individual conditions
Insufficient Infrastructure
Government Policies
Politics

Individual Conditions
Lack of Unavailability of Education: government efforts to accommodate the
growing student population, improving the quality of instruction and promoting prevalent school
attendance has not been adequate and therefore education has not remained a main priority for families
who must struggle with poverty. 700,000 students, from grade 1-9 dropped out of school in 2009 in all of
Mexico.

Unemployment:

the lack of a serious employment policy means that economic expansion is

sacrificed so that higher prices can be avoided. That exerts a negative impact on the labor market in both
the short and medium term, and on new professionals most of all

Other Challenges:

The government does not actively

encourage opportunities to all citizens; including reducing
discrimination against middle-age and elder citizens. Over a
million of the unemployed face age discrimination and 55% of all
unemployed face some form of discrimination when seeking
employment

Insufficient Infrastructure
Investment in infrastructure is unequally distributed
The government is not making efforts for investing in the
betterment of infrastructure

Geographic reasons play an important role in the distribution

of infrastructure
Distributed infrastructure hence 75 percent of the indigenous
population lives on moderate poverty line and 39 percent of
these under extreme poverty

Government Policies
Inequitable distribution of income: 42.2% wealth unevenly divided amongst the 10
percent of nations wealthiest people. despite of government efforts, the NAFTA agreement and
globalization, the income gap remains.

Obsolete Regulatory Framework: disagreement over the years in the government has
caused a serious backwardness in needed legislation in a number of areas. The current economic
framework needs adjustment on virtually all levels including business development opportunities, fair
competition, tax collection and tax law; commerce, trade and finance regulations.

Absent Competitive System: Mexican economy does not support unprivileged

businesses, considering its current standards regarding monopolies, both in the public and private sectors
hence clear principles of competitiveness that offer incentives to private investment, both national and
foreign, are needed in order for jobs to be created.

Politics
Institutionalized Government described as authoritarian, semidemocracy, centralized government, untouchable presidencies, masscontrolling, corporatist and elite-controlled.
Foreign Trade Policies and Foreign Dependence
Government Efforts and Economic Policies
Cancun unequal distribution of wealth notorious economical
inequality between the touristic urban zones, and its more rural
outskirts
Transparency and Corruption
Corruption Perception Index 2010: Mexico received a low score of 3.1,
on a scale of 0 to 10
A family on average pays 109.50 pesos as bribes to authorities;
households have also reported paying up to 6.9 percent of their
income as bribes.

Governments Role in Eradicating

Opening Factories: President Felipe Calderon inaugurated two new Safran group
factories in Queretaro, central Mexico. Officials said the factories represent an investment of
$160 million and would create about 500 jobs (2010).

Foreign Aid: aid from IFAD (International Fund for Agricultural Development) to
mitigate the poverty.

IFAD has funded around 9 projects, financed USD 178.1 million and has directly
benefitted 130,405 households.

Their successfully completed programs include:

1. Development of Marginal Rural Communities in Ixtlera (14,500 household)
2. Oaxaca Rural Development campaign (15,000 household)
3.Rural development in the indigenous community of Puebla (17,000 household)

ON GOING
PROJECTS