Comparison Between Germanys and Mexican Economy

The Germany economy is the fifth largest economy in the world in terms of purchasing power parity. It is European largest exporter of vehicles. Germanys natural resources include coal, natural gas, uranium potash, salt, timber, arable land; construction materials iron ore, nickel and copper. In 2009 the value of natural resources in Germanys imports reached .84 billion. Germany economy is expected to grow by 1.9% in 2015 and remain there in 2016 due to low international oil prices.

The economy of Mexico is 15th largest in nominal terms and 11th largest in purchasing power parity. Its natural resources include; silver, copper, zinc, lead, petroleum natural gas, gold and timber. The economy has rapidly developing industrial and service sectors, with increasing private ownership. In 2011 gross domestic product (GDP) percentage of natural resources was 9.2 and decreased to 7.7 in 2013.

Financial resources;

Germanys economy has been strong in the face of the worlds economy. The government has maintained a strong and sound public finance, and deficit-cutting efforts have kept the public expenditure under control thus making the cost of living low.

Mexican economy continues to expand to a moderate of 2.4% annually growth rate. Public sector showed a strong performance due to a great increase in income taxes reflecting the deviated impact of revenue-enhancing tax reform enacted in 2013 despite higher income and revenue, in order to maintain fiscal consolidation plan the government decided to reduce oil revenue by lowering public sector spending in 2015 and 2016 by 0.7 of GDP annually.

Human resource;

The cost of labor in Germany is more expensive than any other European Union member state especially in industrial sector, but this does not affect negatively the countrys competitiveness. The cost of labor in Germany increased to 110.02 index point in 2015 from 109.12 index point. In manufacturing industry it faces high international competition and it is ranked the forth in the European Union comparison. Earlier labor markets reforms that increased working hours flexibility and reduced structural unemployment have helped to maintain the relatively rich job market.

Labor cost in Mexico raised to 100.80 index point in December from 80.30 index point in November 2015. Mexico has maintained a predictable and steady wage offer certainty to enterprises looking to forecast manufacturing cost.

Infrastructure;

Germany has one of the global most developed transportation and communication infrastructure. In Germany, recent administrations have expanded competition in ports, railroads, telecommunications, natural gas distribution and airports, with the aim of upgrading infrastructure. Growth in the areas of multi-media, mobile phone communication and the internet is outstanding.

Mexico manufacturing output has increased in the automotive auto parts and electronic sector. It is currently ranked as 64 out of 148 regarding infrastructure developments. The government is implementing an ambitious infrastructure plan focused especially on combating poverty and providing opportunities to its citizens by improving the economic growth. Economists agree that Mexico plans of becoming truly industrial economy will not be achieved unless the country improves the construction of roads railways energy plants and other modern physical infrastructure.

Basing on natural resources available in Germany its car company has a recommendable economic growth as compared to Mexico, which has less natural resources. Regarding financial resources, Germany has a stronger economy as compared to Mexico thus making the Germany car company more outstanding. Regarding human resource, the personnel who work in Germanys manufacturing industry earn more as compared to those from Mexico where the cost of labor is relatively low. Infrastructure in Germany is more developed while Mexican infrastructure is still developing Thus, the Germany car company is more advantaged than car assembly in Mexico.

regulatory system/licensing requirements

germany government is commited to regulatory efficiency and open-market policies continues to be reinforced by effective protection of property rights.

foreign investment.

the law is fully defined so as to protect the rights owned by foreigners investing in germany and the secured in chattel and real property are recognized and enforced.

taxesGermanys individual income tax rate is 45% and the federal corporate tax rate is 15.8 %. The overall tax burden is 36.7 of the GDP and government speding is at 73% of GDP as provided byfiscal consolidaton.

corruptionthe Germanys government is trying to be trsnparent and has put in place anti corruption measures that are enforced in all the auto industries, construction and public contracting with the help of thepolitical party inluence and donations from various parties.

Intellectual property rights

Germany ha an ample legislation and regulations that refer to copyright,trademark,design,utility model and patent protection they have ger,any association for protection of intellectual property(GRUR) which is thea academic enhancement and development of industrial propery and copyrights law of germany Labor laws

Labour law in germany are strongly in favour of the employee and they dont have employment at will all of them are signed contracts. This helps to safeguard the rights of all workers and ensure they are not exploited by the employing agencies.

Government stability

In germany the gonevrnment stable and there are no terrorism and violence. They have an average stability index (-2.5 weak;2.5 strong).it is afederal democracy and has experiencepolitical stability since second world war and this serve sa s amaojor contributor to economic growth.

Currency stability

German has one of the worlds most stable stable currency a range of fif=scal measures have been implemented so as to keep inflation rate and exchange rates at an acceptable rate for example the government has stopped offering credits to industry which led to speculation and and consequently inflation.

IPR

Mexican companies claimed loss of sales and weakening of brands due to counterfeit products, which the Mexican Government had recognized. Intellectual Property Right (IPR) abuses across Mexicos industrial sectors continue. Anti-piracy are still weak at the country and losses to Mexican and international companies due to trademark counterfeiting, copyright piracy, and patent infringements lie in the hundreds of millions of dollars annually.

Corruption

Corruption is illegal in UK. In 2014, Mexico was ranked 103 out of 177 countries in the Transparency Internationals corruption perception index (CPI). Mexico is modernising its legislation against corruption, most recently with the creation of the National Anticorruption System.

Labour laws

On December 1, 2012, the Labor Law was reformed, after extensive debate in the Chamber of Representatives and the Senate. This reform requires changes in the way the labor relationship was documented, before its publication, in order to comply with the new law requirements and in order to avoid possible payment of substantial penalties. Among the main changes in the Labor topics the following are considered as those which require special attention:

Regulatory

With no minimum capital required, launching a business takes less than 10 procedures, but completing licensing requirements remains costly. The recent labor reform bill was watered down to protect unions. In the wake of lower oil revenues, the governments 2015 budget included significant cuts in subsidies to Premix, the state-owned oil company, and CFE, the state-owned electricity firm, but housing subsidies were increased.

Foreign Investment

In Mexico, the legal framework that regulates investment by non-Mexican individuals or entities is the Foreign Investment Law (FIL), whose purpose is to establish and regulate the activities in which those individuals or entities are allowed to participate, assigning percentages, limits, restrictions or conditions for participation percentages

References

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