Mexico conjures up images of beaches, tequila with lime, pyramids, and mariachi music. But the country is far more than a sunny vacation destination. The major cities are vibrant centers of innovation and culture. Committed to the free-market economy, Mexico faces many challenges though. Nearly one-third of the population lives in poverty, and structural adjustments have brought a lot of pain. The country is becoming increasingly integrated into the world and is in one of the best economic positions in Latin America. Economic and political reforms are the things to watch over the next few years.