Mexico City - Economy

Economy

Mexico City is one of the most important economic hubs in Latin America. The city proper (Federal District) produces 21.8% of the country's gross domestic product. According to a study conducted by PricewaterhouseCoopers, Mexico City had a GDP of $390 billion, ranking as the eighth richest city in the world after the greater areas of Tokyo, New York, Los Angeles, Chicago, Paris, London and Osaka/Kobe, and the richest in the whole of Latin America, as measured by the GDP of the entire Metropolitan area. making Mexico City alone the 30th largest economy in the world. Mexico City is the greatest contributor to the country's industrial GDP (15.8%) and also the greatest contributor to the country's GDP in the service sector (25.3%). Due to the limited non-urbanized space at the south—most of which is protected through environmental laws the contribution of the Federal District in agriculture is the smallest of all federal entities in the country. Mexico City has one of the world's fastest-growing economies and its GDP is set to double by 2020.

In 2002, Mexico City had an HDI index of 0.915 identical to that of the Republic of Korea (South Korea). The level of household expenditure in Mexico City is close to that of an average household in Germany or South Korea.

In 2008 the average yearly income for Mexico City inhabitants was $20,400 The top twenty percent of GDP per capita holders in the city had a mean disposable income of US $98,517 in 2007. The high spending power of Mexico City inhabitants, makes the city attractive for companies offering prestige and luxury goods.

The economic reforms of President Carlos Salinas de Gortari had a tremendous effect on the city, as a number of businesses, including banks and airlines, were privatized. He also signed the North American Free Trade Agreement (NAFTA). This led to the decentralization and a shift in Mexico City's economic base, from manufacturing to services, as most factories moved away to either the State of Mexico, or more commonly to the northern border. By contrast, corporate office buildings set their base in the city.

Historically Mexico City has had large slums and shanty towns on the periphery of the city although programs and government policies enacted between the 1980s and the present have significantly reduced the number of informal shanty towns in the city to near non existence and transformed many of the slums into modernized boroughs part of the city structure. Despite the elimination of most shanty towns and slums, the boroughs replacing them still suffer from many of the same problems the communities before them did. While modern Mexico City lacks slums in the classical definition of the word, the city does have large districts in which slum like characteristics such as high rates of poverty and crime are prevalent. Although these districts face many of the same problems as classical slums seen in Brazil and India do, they typically have water, sewage, electrical, transportation, school and sanitation services differentiating them from proper slums. These semi-slum, semi-developed areas are known as Zonas Marginales in Mexico or "Marginal Zones". In Mexico as a whole these Marginal Zones are characterized by their winding unplanned roads, and seemingly endless sprawls of cinder block buildings spanning over tens of square miles. Some well known Marginal Zones in Mexico City are Cuautepec, Tepito and Nezahualcoyotl. While Mexico City itself has no settlements that fit the classical definition of a slum, the neighboring state of Mexico has several such settlements.