PESTLE Analysis of Mexico
Mexico is a North American country. It is situated on the southern side of North America. Mexico touches the border with the USA, Gulf of Mexico, Pacific Ocean, Belize, Guatemala, and the Caribbean Sea. The total area of Mexico is 1.973 million km2, and its total population is 128.9 million (2020). In terms of area, it is the 13th largest country in the world. In terms of population, it is the 10th most populated country globally. The capital city of Mexico is Mexico City. Its capital Mexico City is one of the largest cities in the world. We will do a PESTLE Analysis of Mexico to provide a clear picture of the country.
It was the home of several ancient civilizations such as Mesoamericans, Aztecs, and Maya. In the 16th century, Spanish Empire colonized Mexico. They named the country “New Spain.” They want to exploit all the natural resources of the country. However, the country gained independence in 1821 through the war named Mexican War of Independence.
In this post, we will discuss the PESTLE analysis of Mexico. This tool will help to highlight the country’s political, economic, social, technological, legal, and environmental factors in detail. Keep scrolling!
Political Factors | PESTLE Analysis of Mexico
- Government System:
The country follows the presidential form of government and administration. Mexico consists of 31 states, so President is the head of the government, commander in chief, and head of the state. The party that gets the majority vote elects the President for 6 years (once in a lifetime). The constitution does not allow the President to take to power again.
- Alliances:
The country has alliances and membership with leading institutions of the world such as the UN, NAFTA, WTO, Pacific Alliance Trade Bloc, and G20. According to experts, Mexico has the potential to become a leading giant in different sectors.
- Diplomatic Relations:
Mexico needs to manage its position as neutral in world affairs in order to develop as a leader. In both global affairs and the region, the country holds significant power and influence. The country is trying to become a global power by 2050. For this purpose, Mexico has established excellent diplomatic relations with several countries worldwide. It has some conflicts with various countries too.
- Corruption:
Like other developing countries, Mexico is also facing some serious corruption issues. Everyone is corrupt, from the judiciary to police, political parties, government, and non-government organizations. They misuse the power and do not follow the law. According to some experts, corruption is one of the major hindrances to the growth of Mexico.
Economic Factors | PESTLE Analysis of Mexico
- Gross Domestic Product (GDP):
The annual gross domestic product of the country was 1.322 trillion dollars in 2020. This is the 15th highest globally. Its per capita income was 10405.
- Imports and Exports:
The country exports spare parts, computers, delivery trucks, and crude petroleum to the USA, Japan, Canada, China, and Germany. However, the country imports spare parts of vehicles, refined petroleum, petroleum gas, and computers from the USA, Germany, China, South Korea, and Japan.
- Foreign Direct Investment (FDI):
The country is a member of the MINT group, containing other countries like Turkey, Indonesia, and Nigeria. This group aims to enhance economic development in the country through FDI. In 2020, the FDI of the country was 23.5 billion dollars. But, it has decreased due to the global pandemic of covid-19.
- Unemployment and Taxes:
In 2020, the tax rate was 1.92 percent which changes later to 35 percent in the country. The country is facing various taxes issues and unemployment problems. These are some signs of worry that Mexico is experiencing right now.
Social Factors | PESTLE Analysis of Mexico
- Demography:
The total population of the country in 2020 was 128.9 million. The country has a vast social system. There is plenty of natural beauty, richness, and history in the country. They speak Spanish more commonly but also speak English as well. Christianity is the religion that is in the majority of Mexico. When it comes to food and clothes, Mexico is one of the most affordable countries globally. These are some interesting facts about the country.
- Social Challenges:
The gap between poor and rich, unemployment, inflation, and other social factors are some challenges the country is facing currently. More than 50 percent of people live under the poverty line in Mexico. Also, the political instability and social issues are putting the country into deep trouble. For the desire for a better life, many Mexican people try to cross the US border.
- Values and Trends:
The socio-cultural system in Mexico is very rich and strong despite all the social challenges and problems. They love to play football and their team is the best in the world. They give value to family and family values. On the other hand, the country’s cuisine is one of the most important things.
Technological Factors | PESTLE Analysis of Mexico
- Technological Innovation:
Mexico is growing in terms of technological advancement. Just because of its efforts in the tech industry, the country has attracted several tech players like Amazon, Facebook, Uber, and Google. Moreover, the government and non-governmental organizations are trying to adopt the latest technologies and innovations. In 2018, Mexico congress passed a bill to reduce barriers to digital currencies like cryptocurrency.
Legal Factors | PESTLE Analysis of Mexico
- Regulations:
The judicial system in Mexico is totally free and independent, but corruption has destroyed it. The immense corruption level has just tarnished the reputation of the country all around the world. The hold of drug lords, smugglers, and gamblers has stained the name of the country. But, its labor laws protect the rights of laborers. Employees should check the contract while joining a firm or company. The constitution of the country prohibits discrimination of any religion, caste, sex, and race.
Environmental Factors | PESTLE Analysis of Mexico
- Environmental Problems:
Scarcity of fresh water, toxic waste, air pollution, water pollution, and land pollution are major environmental challenges the country is facing. However, The government is trying to adopt green initiatives to reduce the impact of climate change.
- Tourism:
Mexico falls under the set of most beautiful countries globally when it comes to tourism. Its desserts, national parks, landscapes, natural beauty, and historical sites are worth-exploring. Moreover, the country is promoting its tourism by improving infrastructure and providing facilities. Thus, Mexico can earn major revenue through the tourism industry.
Final Thoughts | PESTLE Analysis of Mexico
It is very clear from this PESTLE analysis of Mexico that it is a leading developing Latin American country in the world. However, the country has been facing several big issues like corruption, poverty, unemployment, and from the decades. Surely, It has the potential to attract foreigners and international companies. So, they need to improve their economic and political infrastructure. The country should utilize its resources in order to reduce the gap between the poor and rich classes.
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