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USAID Information:
External Links:
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Mexico
The Development Challenge: Since the signing of the North American Free Trade Agreement (NAFTA)
in 1994, Mexico has become the third largest trading partner of the United States and is among the top
ten export markets for 43 states. In 2001, it was the ninth largest economy in the world. As President
Bush said in 2001 and reiterated in early May 2002: NAFTA "is recognition that the United States has no
more important relationship in the world than the one we have with Mexico . . . Good neighbors work
together and benefit from each other's successes."
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In 2002 with a population of 100 million, the Government of Mexico estimated gross domestic product
(GDP) per capita at $6,884. By comparison, the GDP per capita in Guatemala (population 13 million) in
the same period was $1,642 and in Honduras (population 6.2 million) was $920. However, not all
Mexicans are reaping the benefits that this extensive trade, international visibility, and close U.S.
partnership might offer. About 53% of all Mexicans--over 50 million people--had an annual income of less
than $720. Moreover, environmental degradation in Mexico presents a significant development challenge
to the country’s biodiversity as well as the country’s continued economic growth, particularly in rural
areas. The government, after decades of one-party rule, has lacked the rigor necessary to achieve high
standards of transparency and accountability.
The election of President Vicente Fox in July 2000 began a new era for Mexico, ending 71 years of oneparty
rule. Since taking office, the Fox Administration has initiated a number of promising programs to
reduce poverty, improve accountability and governance, protect natural resources, and expand the
benefits of trade to more Mexicans.
The USAID Program: USAID's program works with Mexico to address shared development problems. A
common U.S.-Mexico development agenda has emerged that includes promoting environmental
protection, alternative energy and ecotourism; improving public administration, transparency, and
accountability; broadening microfinance and remittance utilization; preventing infectious diseases; and
furthering competitiveness. FY 2004 is a transition year for the USAID program in Mexico, as it moves
into a new strategic plan, under the new regional strategy approved for Central America and Mexico
(CAM). The activities under the old strategy, including adoption of more democratic processes,
biodiversity conservation, clean energy and production, HIV/AIDS prevention, and access to
microfinance, will end in FY 2004. The tuberculosis program will continue to carry out activities through
the end of FY 2006. The United States-Mexico joint scholarship and training programs under the
education exchange and scholarship objective started in FY 2002 will continue under the new strategy.
Under the new CAM Regional Strategy, USAID/'s program in Mexico has four areas of focus: economic
growth (including access to finance and natural resources management), accountable governance and
rule of law, infectious disease prevention and control, and educational exchange and scholarships. Each
strategic objective is discussed below in greater detail in the Data Sheets.
The new USAID program in Mexico contributes significantly to the bilateral Bush-Fox Partnership for
Prosperity to stimulate private investment. USAID's scholarship and exchange program will enhance the
capacity of higher education institutions in the United States and Mexico to examine development
problems. In FY 2003, 16 university partnerships implemented activities and eight more partnerships will
be awarded in the second quarter of FY 2004. In addition, nine U.S. and ten Mexican States will continue
to address a wide range of issues, including transborder administration and governance, small business
development, and water conservation in Northeastern Mexico. USAID's microfinance program will work
with credit unions, private banks and associations to facilitate lower-cost remittance transfers from the
United States to Mexico and to encourage savings and investment by Mexicans in both countries.
Other Program Elements: USAID will continue to collaborate closely with USAID regional activities
designed to protect Mesoamerican (Mexico and Central America) Reef and the Mesoamerican Biological
Corridor as well as to control wildfires in the region.
USAID will also provide technical oversight and management of a Global Development Alliance activity,
the Lead Free Alliance (LFA). The LFA is a two-year, $1 million grant in support of a public-private
partnership that includes American Express and other private sector partners, international agencies,
such as the United Nations Educational, Scientific, and Cultural Organization (UNESCO), and Mexican
public agencies that promote handicrafts. The goal of the Lead-Free Alliance is to remove lead from
pottery production in order to increase income and employment opportunities for producers of traditional
low-fire pottery and to create markets for their lead-free pottery. The program seeks to train 10,000
Mexican potters over the next two years, and expects to generate $1 million in local, regional and export
sales of lead-free pottery. The LFA will begin in FY 2004.
Other Donors: The World Bank is the first and the Inter-American Development Bank (IDB) is the second
largest development assistance organizations in Mexico. The World Bank’s portfolio in Mexico in 2002
comprised about 28 active projects with five areas of focus: macroeconomic stability through budget and
tax reform; enhancing competitiveness though infrastructure, financial reform, agricultural productivity and
integration of more small and medium-sized firms into the new economy; developing human capacity
through education and health; creating environmental sustainability; and building more efficient,
accountable, and transparent government. IDB lending to Mexico funded approximately 30 projects
centered around four themes: social sector modernization, economic integration through NAFTA and Plan
Puebla-Panama, modernization of the state and lowering barriers that limit the competitiveness. The
North American Development Bank is providing funding to the border states (4 U.S., 6 Mexican) for water,
solid waste, and wastewater infrastructure development, including technical assistance on rates and
management issues. Its efforts have been slow in starting, but should begin to improve water quality and
use in the border states in the coming years.
Japan is the third largest donor and has historically been the largest bilateral donor. It is collaborating
with USAID in several activities related to environment and HIV/AIDS. Smaller bilateral donors include the
British Department for International Development (environment), the British Council (education and
governance), Spain (microfinance and environment), and France (environment).
The United Nations (UN) group is represented by 18 organizations in Mexico. Among the UN
organizations with which USAID collaborates more closely are the Pan American Health Organization, the
United Nations Development Program, the United Nations Environment Program, the United Nations
Fund for Population, UN-AIDS, and the United Nations Children's Fund (UNICEF). Areas of collaboration
include prevention of tuberculosis and HIV/AIDS, streamlining government, promotion of renewable
energy, and protection of natural resources.
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