Mexico: Revolution and Reform

1
Mexico Revolution and Reform

• Technocratic populist corporatism

2
Common issues in Latin America

• Inflation
• Population
• Foreign debt
• Political Instability
• Income Inequality
• Poverty
• Corruption
• Militarism

3
History

• Cortez and the colonial conquest 1519 Classic
  mercantilism with providing Spain with gold and
  silver. Enrichment of the Spaniards and
  impoverishment of the natives.
• Jesuits introduced Catholicism the Church became
  a great land owner
• Independent since 1821(military dictatorships,
  Diaz in particular)
• Revolution of 1910 (Pancho Villa) Who controls
  Mexico Foreigners or the Church or both?
• 20th century Mexico has advanced in some ways but
  also stayed the same in other ways Persistent
  corruption and completed industrialization are
  the examples

4
Development strategy

• Legacy of colonialism and foreign domination
• Import substitution with an extensive state
  sector emerging as a result of oil industry
  nationalization (1938). Tremendous toll on
  domestic consumers and internal income
• 1982 nationalization of the banking industry( as
  a result of the national default) and launched
  the lost decade

5
Reforms of the 1990s

• Salinas elected in 1988. He faced a serious
  economic deterioration with political
  radicalization. Enormous indebtedness.
• Salinass predecessor de la Madrid tried to fight
  debt with privatization selling SOE which
  continued into the 1990s(parastatals)
• Relaxing restrictions of FDI
• The currency crisis of 1994 (tequila effect)
• Zedillo comes to power in the midst of PRI
  orchestrated elections and following a series of
  assassinations of contending candidates

6
NAFTA

• An impetus to current account adjustment after
  Clintons bailout of Mexico 40 bn in bonds.
• Income inequality is widening 40 lives on less
  than 2 a day (38 mn people)
• Maquiladora and emigration
• Corn production and import competition

7
Agriculture

• Vast estates (encomiendas using slave labor) with
  increasing debt peonage and later becoming
  haciendas
• Ejidos or agricultural communes liable for taxes
  and forced to convert to Catholicism were allowed
  to stay on their traditional lands (limiting and
  conditioning mobility) The initial reform in
  1857. With P. Diaz establishing his dictatorship
  in 1885 the emphasis on industrialization and
  foreign investment side-tracked rural reform and
  widened the gaps in income
• Constitution of 1917 was redistributing haciendas
  to peons and re-established ejidos. !920-1930
  surge in populism and communalism. Political
  backlash from the opposition (Cardenas left and
  Aleman initiated indusry led import substitution)
  Agriculture is de-emphasized and forsaken. An
  accent on maquiladora (border industrialization
  project)
• Ranchos and haciendas have become virtually one
  type of land tenure
• Duality of agricultural development