Mexico, with all its challenges, represents a success story in global terms. After the 1995 peso crisis roiled international markets, Mexico started practicing what Washington only preaches: living within its means. The Organisation of Economic Co-operation and Development now classifies Mexico, the world's 14th-largest economy, as a majority middle-class society. Average income has doubled in the past 15 years; a quarter of the country's homes were built within the past two decades; and the average number of school years Mexicans attend has doubled in the past four decades. Mexico is the world's top per capita consumer of Coca-Cola (KO) and has more Walmarts (WMT) per person than the U.S. Mexico's consumer market is vital to large companies ranging from Citigroup (C) to Procter & Gamble (PG) to Ford (F) and GM (GM).
Plenty of Americans may think Mexico is dirt-poor, but our neighbor imports more U.S. goods than any country besides Canada, and more than Germany, France, and the U.K. combined. It's also the third-largest provider of oil to the U.S., behind Canada and Saudi Arabia. It used to rank second, but mismanagement of the state-owned behemoth Petróleos Mexicanos (Pemex) has diminished Mexico's oil output. This may be a blessing in disguise for the country's overall economy, which has diversified its export base to the point where oil now only accounts for less than 20 percent of export revenue. For the federal government, however, the failure to expand production has been a disaster, as Pemex accounts for about 34 percent of the government's budget. That's why Peña Nieto is eager to encourage foreign investment in Mexico's oil sector.