Economy
Mexicali is considered as one of the most prosperous and highly developed cities in Mexico.
During the mid-20th century, it was the biggest cotton producer in the country with production peaking at more than half a million parcels in a year. However, the influx of synthetic fibers reduced the global demand for cotton and the city had to shift to other produce.
Horticulture is currently the primary agricultural industry of Mexicali. Among its leading exports are asparagus, scallion, and green onions. Cotton and wheat are still produced albeit on a reduced scale. There is also a thriving aquaculture industry which produces mollusks, fish, and crustaceans. An agribusiness fair known as Agrobaja is held every year with the aim of drawing exhibitors and agriculturists to Mexicali in order to raise revenues and promote the agricultural market. In the 7th Agrobaja fair last March 2007, more than 50,000 visitors came and total revenues amounted to US$5.9 million. The attendance was a significant improvement from the 12,000 people who came in Agrobaja’s first year in 2001.
Situated in the northern border of Mexico and next to the American state of California, the city naturally functions as a cross-border checkpoint for tourists, immigrants, and shipments of crops. Apart from its agri-industry, it also derives its income from maquiladoras or duty-free manufacturing plants that import and assemble components which in turn will be exported.
The maquiladoras started way back in the 1960s. They became popular among investors and plant owners since the arrangement entails low-cost labor. They also became a key source of foreign exchange earnings for the Mexican government. From a labor force of 200,000 in the 1980s, the employment in maquiladoras increased to about a million in the 1990s. In 1993, the United States, Mexico, and Canada implemented the North American Free Trade Agreement (NAFTA) which increased trade among the three countries. More US companies established assembly plants in Mexico and utilized the latter’s cheap labor.
During the late 1990s, however, the maquiladoras were heavily criticized for unfair labor practices. Employees, a majority of which were women, were subjected to substandard working conditions and unreasonably long work hours without overtime compensation. There were also no trade unions in most plants.
In Mexicali, various multinational companies such as Sony, Mitsubishi, Daewoo, Kwikset, Price Pfister, Honeywell, Paccar, Vitro, Skyworks Solutions, Cardinal Health, and Bosch currently operate. The numerous plants produce computer monitors, televisions, plastics, metal producs, medical supplies, cables and wires, aircraft parts, furniture, textiles, and transportation equipment. The city also hosts the processing plants of Nestle, a giant food company, as well as Sabritas and Jumex.
The local government aims to attract more companies to put up plants in the city by further promoting its labor force, abundant energy and water supplies, business-friendly environment, and strategic location in between Mexico and California. Silicon Border, a manufacturing park, was recently constructed in order to entice the semiconductor companies in nearby Silicon Valley to also invest in Mexico.