An image of the country's flag.

Mexico is an upper-middle-income country whose economy has grown steadily but more slowly than that of other emerging-market countries. Mexico was hard hit by the global economic crisis but has recovered since that time and has generally experienced slow but steady growth, with its GDP growing by 2.5% in 2015. The government enacted a series of economic reforms known as the “Pacto por México” beginning in 2012.

Many of the benefits from Mexico’s economic growth have been unequally distributed as Mexico ranks in the top quarter of countries for unequal distribution of income. Poverty rates have stagnated in recent years with nearly half of the population living below the national poverty line, despite increases in per capita income. Over 60% of Mexico’s poor people reside in rural areas, and most are dependent upon subsistence agriculture. By international standards, agricultural productivity in Mexico is low. Agricultural growth has largely been concentrated in the commercial farming sector, and the rural poor have generally not experienced improvements in agricultural productivity.

Following legislation adopted in 1992, the fundamental transformation of Mexico’s land regime, which allowed privatization and market transfers of ejidal land rights, is now largely completed. Follow-through is needed to: provide support to ejidal communities to protect lands they do not wish to see “parcelized” and to protect common resources; ensure an up-to-date and reliable land certification and registration process; increase support for women’s land rights; increase access to credit; and improve the functioning of land markets.

Mexican cities are characterized by low population density and, as a result, urban sprawl is high. Urban sprawl negatively affects inner-city transportation and limits job possibilities for the urban poor, who may not be able to afford the high cost of transportation from peri-urban areas. Mexico must boost institutional capacity and strengthen collaboration for urban land use planning and development across all levels of government.

Mexico’s development is constrained by numerous environmental challenges, many pertaining to water and forest resources. In the past 60 years, population growth has caused a fourfold reduction in the amount of available water per capita, putting Mexico under severe water stress. The northern Mexican states are intensely water-stressed, and there is increasing contamination of both surface and underground water. Mexico must improve its water management systems to avoid limiting its potential for further growth.

Perhaps due to its high vulnerability to climate change, Mexico is an international leader in forest management and efforts to reduce and adapt to climate change. Although the rate of deforestation in Mexico has declined, it is still contributing to soil erosion and desertification. The effectiveness of Mexico’s forest management and climate change programs can be improved.

Mexico is one of the leading mineral producers in the world. The government has adopted a package of energy reforms in an effort to reduce declining production of hydrocarbons while also moving to greater reliance on green energy. Effective implementation of the energy reforms is an ongoing challenge for Mexico especially in light of the need to ensure that meaningful social and environmental impact assessments and consultations with affected communities take place in a way that does not cause undue delay to needed energy projects.


  • Work with the government and customary institutions to strengthen women’s land tenure rights. Most women in Mexico have not been direct beneficiaries of the land reforms initiated in 1992 and, despite statutory protections, traditional customs and practices (usos y costumbres) continue to restrict women’s land rights. Donors could work with the Government of Mexico to develop strategies for improving the recognition and protection of the land tenure rights of rural Mexican women. This could include a practical solution that “corrects” the existing land documentation by adding women’s names to land titles. Additionally, donors could implement programs focused on empowering indigenous women to exercise their statutory land rights, as well as work with customary institutions to encourage them to include women in comunidad and ejido decision-making processes.
  • Improve accessibility of land registration and land transfer systems. Land registry offices in Mexico are located primarily in state capitals. Thus, many transactions are never recorded in the registry so that information in the registry becomes increasingly out of date and unreliable. Donors could support pilot projects that essentially take registration services to the people, possibly through mobile units, temporary offices or by making services more available through the internet (although the latter option will require improving internet access in rural areas).
  • Increase support for small farmers and develop accurate data on land distribution. Individual farmers may in some cases have lands that are too small to farm productively, and fragmentation of ejidal land has, by some reports, become problematic. Accurate data on the extent of fragmentation and its effects is not currently available. Donors could work with the Government of Mexico to study trends in land fragmentation, and its potential impact on land use and land conversion, as well as its governance, economic, financial and environmental effects. Donors could further partner with the Government of Mexico to explore ways to support owners of small-scale farms in developing competitive economies of scale through community associations, alliances, and partnerships.
  • Strengthen urban planning and land use planning to address urban sprawl. Despite the creation of the Ministry of Agrarian, Territorial and Urban Development (SEDATU) in 2013, there is poor coordination among the many federal, state and municipal agencies that divide responsibility for urban transport, land use and environmental protection, disaster risk management, and housing. Low capacity and insufficient resources restrict urban and land use planning functions at the state and municipal levels. Thus, most cities lack a coherent vision and long-term plan. Donors could support efforts to coordinate institutional activities and build capacity to produce a more efficient and effective system of urban and land use planning, including one that can better respond to natural disasters.
  • Mitigate water contamination. One of the most severe water problems in Mexico is the increasing contamination of surface and ground water. Over 70% of all lakes and rivers are polluted to some extent. Water quality is harmed by agricultural runoff, lack of municipal sewage facilities and disposal of much of the industrial wastewater without adequate treatment. Donors could work with the Mexican government to develop and implement a practical cross-sector strategy to reduce water pollution and clean up polluted waterways.
  • Increase efficiency of water use. The availability of water has decreased alarmingly in the last 50 years, caused in large part by climate change and an inefficient use of water resources in urban areas and in agriculture. Donors could support efforts to develop an integrated water management system under the National Water Plan 2014-2018 that could include some or all of the following: (a) improving the efficiency of urban services; (b) developing and implementing an effective water financing system that incentivizes optimal use of water resources; (c) strengthening the enforcement of water rights; and (d) improving the efficiency of water usage in the agriculture sector.
  • Improve efforts to reduce deforestation and increase reforestation. Mexico is a global leader in forest management and has experimented with REDD+ and other programs that provide payment for environmental services. The deforestation rate has declined but is not yet zero. Moreover, despite receiving a significant amount of Mexico’s forest investments, reforestation efforts have achieved modest results. Donors could continue to support the implementation of REDD+ in Mexico. They could also support programs, such as long-term systematic monitoring of forest conditions, to increase the land areas subject to reforestation and improve the quality of the new forests.
  • Improve human-rights conditions in the mining industry. The mining industry in Mexico has been plagued with conflict and alleged human-rights abuses. Donors could work with the government to implement legal and other safeguards for mine workers, and to ensure that workers have fair and equitable access to the justice system in the event of grievance.


Mexico is an upper middle-income country characterized by dramatic regional and urban-rural differences in income and quality of life. Measured against international poverty rates, 3% of the population lives in extreme poverty (less than $1.90/day). Mexico continues to be plagued by violence arising from turf battles between drug cartels in northern Mexico. Although the numbers are declining somewhat, incidents associated with organized crime have killed at least 80,000 people since 2006 (World Bank 2017; Congressional Research Service 2015).

Mexico implemented a large-scale land reform that began after the revolution in 1917 and ended in 1992. The reform distributed more than 100 million hectares from large farms to groups of households organized into ejidos (collective holdings). Indigenous groups also gained rights to their commonly held land during this period, which they organized into comunidades (forms of collective ownership). These ejidos and comunidades, however, lagged behind the development of privately held farms, and collective owners were more likely to be poor.

In 1992, Mexico fundamentally changed its land regime and allowed privatization and market transfers of ejidal land rights. This reform is now largely completed, though it has been hindered by: a somewhat inaccessible land registration system; insufficient protection of women’s land rights; and lack of credit or marketing mechanisms. A large part of Mexico’s rural population faces significant challenges in overcoming poverty and entering a future of broad-based, sustainable development in the countryside.

The rural sector is characterized by poverty for most residents. Rural living standards are much lower than those in urban areas. Although the percentage of the rural population that is undernourished is declining it is still significantly higher than in the urban population. Rural areas are home to 61% of Mexico’s extreme poor. A majority of farmers are subsistence-oriented small farmers.

In the latter half of the twentieth century, Mexico experienced a fundamental shift from a rural to an urban society. This dramatic urbanization strained the ability of the Government of Mexico (GOM) to build urban infrastructure, including housing. The lack of affordable, well-constructed housing has meant that rural-urban migrants cluster along the periphery of urban centers. This has led to the proliferation of informal settlements.

Women in Mexico were largely excluded from land redistribution programs and most ejidal land is held by men. Most women are not voting members (ejidatarios) of ejidos and do not hold use rights. The 1992 reforms have in some cases further eroded women’s rights in ejidos, as only ejidatarios were allowed to vote on new regularization and tenure regimes, and only ejidatarios’ land rights were strengthened through these processes.

Mexico faces several environmental challenges, mainly pertaining to water and forest resources. The northern Mexican states are intensely water-stressed, meaning that they face limited water availability, aquifer over-pumping, pollution, and extreme events such as drought and water conflicts. One of the most severe water problems in Mexico is the increasing contamination of both surface and underground water.

Thirty-four percent of Mexico’s land area is forested, and the average annual deforestation rate is 0.24%. Deforestation contributes to soil erosion and desertification. Between 2010 and 2015, Mexico lost approximately 458,000 hectares of forests. Forest degradation and deforestation continue, primarily due to the conversion of forests to agricultural and pasture land. The Government of Mexico, with donor support, has undertaken significant measures to improve natural-resource management, including incorporating the Reduction of Emission from Deforestation and Forest Degradation (REDD) Program into existing forest management systems.

Although Mexico is one of the leading mineral producers in Latin America, the mining industry is a source of conflict and alleged human-rights abuses. Many mining jobs are short-term and low-wage. In several instances, mine workers and security forces have violently clashed over unionization and salary, resulting in injuries and fatalities.

Published / Updated: December 2017