Ask anyone to describe a typical Mexican and the image will almost certainly be of a figure leaning against a tree, snoozing, with his sombrero pulled down over his eyes.

It is a view that Felipe Calderón-Hinojosa, the country's President, is anxious to dispel, as he told delegates at the World Economic Forum in Davos a week ago.

In Mexico City, the nation's sprawling capital, this image of indolence has long been vanquished. The world's second-largest city, home to about 19.4 million people, has a GDP greater than Denmark or Ireland.

Once seen as a hub of kidnapping, corruption and pollution, the advantages of the world's eighth-richest city have come to be appreciated by global corporations flocking to it, including its strategic location - to the north lies the world's largest market - its 18 free trade agreements, and its cheap, but skilled workforce.

Carlos Bello Roch, head of foreign investment at Bancomext, the government-owned foreign trade bank, said: “If you establish yourself in Mexico City you instantly have a pool of 20million people to draw on. That is the equivalent of a third of Britain.”

He added: “Everything we make within Mexico will benefit from the free trade agreements from Nafta, so you can sell it to the US without tariffs. Geographically speaking, we are very close to the US market. It takes five days to get goods in there, compared to weeks from Asia. It is easier to bring products to the US from Mexico because you can get there so quickly, unlike from Europe.”

Goldman Sachs predicts that Mexico's economy will become the fifth-largest in the world by 2050, behind China, the United States, India and Brazil. In Mexico City, which contributes more than a third of the nation's GDP, the growth is most pronounced, but it comes with consequences. As the city has grown piecemeal from its Aztec roots, through Spanish colonisation to modern independence, there has never been a co-ordinated plan for urban infrastructure.

Diego Folino Di Filipo, chief executive of the Mexican arm of Standard Chartered bank, said that the Mexican tradition of a leisurely business lunch is under threat - not from a change in culture, but because of the traffic.

“Breakfasts are getting shorter, lunches are turning into one hour rather than two,” he said. “You have to time yourself to go around the traffic. It's crazy.” The Government has tried to reduce the number of cars in the city, at present about 4.5 million, with number-plate restrictions on certain days, but journeys of a few miles can still take more than an hour.

Pointing at a cluster of glass skyscrapers in the upmarket Lomas district, Mr Di Filipo said: “Thousands of people work in those, but they are all on one single-lane street. Why let people build that? They may be great inside, once you get there. But imagine what it's like when all those people are trying to get to and from work.”

Those in the infrastructure industry say that the sheer size of the city makes planning difficult. “It is different taking mass transport here as compared to in Europe, because we have so many people,” said Adriana Lobo, director-general of the Centre for Sustainable Transport, an influential think-tank.

She added: “The roads are not enough, and they are never going to be enough. Car growth is above 5 per cent per year, and there are quite big mobility problems. You have got people travelling three hours each way to get to work. There is no way that we can match the growth of cars with growth of the roads.”

The city government says that it has studied Ken Livingstone's congestion charge, but that it would be too difficult politically to introduce.

Luis Rosendo Gutierrez, under-secretary for planning, said that officials are working with the British Embassy to find British companies that would enter into public-private partnerships to help to boost infrastructure. The national government plans to spend $40billion (£20.1billion) a year until 2012 to boost roads, railways, and ports across Mexico.

Mr Gutierrez said: “We are in a transition. This city was mainly industrial and in the last 20 years it has become a city of services. To improve, we are building 60km of cycle lanes this year, we are changing our bus engines to the most advanced system in the world to reduce pollution, and we will be extending plate restrictions on cars driving into the city.”

One partial solution is the Metrobus. One lane of the main carriageways in and out of the city is allocated solely to single-decker buses that ferry 250,000 people each day at high-speed in and out of the city centre.

There are plans to expand the Metrobus system rapidly, as well as a twelfth line for the city's underground network, but a consequence of the gridlock is that businesses have started to look outside the city centre.

José Luis Garza Álvarez, chief executive of Interjet, one of a number of low-cost carriers that emerged after the country opened up its skies, operates his airline out of Toluca airport, Mexico City's equivalent of Stansted.

The airport lies about 40 miles west of the city centre, on a route that passes Santa Fe, Mexico City's newly built business hub. Almost no public transport connects the skyscrapers of Santa Fe with the rest of the city. Built on top of volcanic mountain rock, it is far too expensive to excavate beneath the surface to link it to the Metro system.

“Because of Santa Fe the vast majority of business air travellers live to the west, in the area towards Toluca,” said Mr Álvarez, who studied Flybe and Ryanair as models for his business.

“It was just too congested to operate out of Mexico City airport, so we were the first people to take the risk of going to Toluca. When we started, the airport was practically a hut. We converted a hangar into a terminal.”

Low-cost airlines have been around for less than five years in Mexico, and business travellers are their biggest clients, making up some 60 per cent of passengers. Interjet carried 1.2 million passengers in 2006, 2 million in 2007, and forecasts that it will touch 3.7 million this year.

Aerospace is one of Mexico's fastest-growing areas of foreign investment, with the high level of technical expertise needed serving as a perfect example of the virtues of a highly skilled, but cheap, workforce.

Interjet is in the process of gaining accreditation from the US Federal Aviation Administration to perform maintenance checks on American carriers' fleets. Every aircraft must undergo a check every 12 to 18months. In America, it costs about $750,000 per aircraft. In Mexico, it can be done to at least the same standard for $250,000.

Facts and figures

Origin of name Named after the Mexica tribe, of the Aztec civilisation. There are various theories as to the word’s origin, including that “Mexi” is a secret name for the war deity Huitzilopochtli, or from “metztli”, meaning moon, and the suffix “co”, meaning place

Population 19.4 million in the entire metropolitan area

GDP $315 billion

Exchange rate £1 to 20 pesos

Cost of living Bottle of Corona, 7 pesos in the shops

Visa regulations No restriction on EU nationals, who can stay for up to 90/180 days as a tourist, depending on country of origin

Time zone GMT minus six hours

Per capita income $18,381 in Mexico City. $7,348 nationwide

Flights BA flies direct from Heathrow to Mexico City on Mondays, Wednesdays and Fridays. A variety of other airlines transfer through American cities

Website www.df.gob.mx

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