The following material was excerpted with permission from "Caught Between Two Worlds: Mexico at the Crossroads" a publication developed by the staff of Choices for the 21st Century Education Project, a program of The Thomas J. Watson Jr. Institute for International Studies at Brown University.
The "technocrats," as they were known, were the vanguard of Mexico's free market revolution in the 1980s. Miguel de la Madrid, Minister of Programing and Budget during the Portillo presidency, hired hundreds of these young specialists to manage the Mexican economy.
What was unique about these young reformers was that they were educated at top universities in the United States and entered Mexican government as advisers and analysts. Unlike Mexican officials of an earlier era, the technocrats did not advance through the ranks of the PRI. Being less constrained by PRI loyalties allowed them the freedom to promote the free-market economic system and open trade that they felt was crucial to solving Mexico's problems.
Mexico's new economic policy kept the peso's exchange rate low, promoting exports and discouraging imports, cut government spending, raised interest rates to control inflation, and held down wages.
In 1986, Mexico took a major step toward opening its economy by joining the General Agreement on Tariffs and Trade (GATT). Membership in GATT required Mexico to lower its trade barriers and reinforced the country's commitment to free-market economic principles.
When President Carlos Salinas came to power in 1988, he accelerated the pace of the technocrats economic reform. With a doctorate in economics from Harvard University and experience as the minister of programming and budget under de la Madrid, Salinas led Mexico into the global marketplace.
Salinas vigorously pursued goals of privatization and free trade. He sold off many of the most prominent state-owned firms, including the country's telephone company, airlines, and a large steel mill. The number of companies under government control dropped from 1,555 in 1982 to 217 in 1992. More than $20 billion was raised in the privatization program helping Salinas to eliminate Mexico's budget deficit.
Mexico's import tariffs, once among the world's highest, continued to fall under Salinas. From 1985 to 1992, the average tariff on Mexican consumer goods fell from 60 percent to less than 20 percent. Salinas' most dramatic move was to open negotiations with the US in 1990 on forming a regional trade bloc.
Years of Mexican talks eventually produced the North American Free Trade Agreement (NAFTA), which took effect in 1994. By linking Mexico to the US and Canada, NAFTA created the world's largest consumer market.
Mexico's economy seemed to be heating up when disaster struck after Zedillo's inauguration. Mexico's foreign reserves dropped severely. Meanwhile Mexico ran up a huge, debt to finance the shortfall. After devaluing the peso and much belt-tightening, Mexico recovered. By 1996 economists reported solid growth, however, Mexican workers suffered greatly during this crisis. Millions lost jobs and most of their incomes were lower than what they had earned in 1980.
The three viewpoints or futures in the next section are written from a Mexican perspective. Each proposes different values and opinions on how Mexico should proceed into the 21st century. Read each carefully and draw your own conclusions on what you think are the most appropriate policies for Mexico.
The will of the Mexican people is being denied in the name of international capitalism and free markets. NAFTA has opened our country to a new form of exploitation by the United States. Mexico has been shoved, weak and defenseless, into the global marketplace. The results have been devastating. Mexico must heed the cry for justice from its people. We must rekindle the promise of the Mexican Revolution for those who have known only poverty and oppression. Fairness and equality must serve as the foundation for a new society. The enormous imbalance between rich and poor must be corrected. With commitment and struggle, all Mexicans can at last have an opportunity to share in the wealth of our country.
After decades of steady advancement, our country's era of stability and development has been sidetracked. In its place, we have crime, corruption, and disorder. The technocrats responsible for the mess call our present turmoil the price of progress. In reality, Mexico is sliding backward. We are drifting toward a repetition of the violence and destruction of the revolution. Mexico must take strong measures to restore order and turn back the forces of disintegration. The unrestrained capitalism of the United States cannot be transplanted to Mexican soil. Nor can our carefully crafted political system be overturned in the span of a few years. Rather, we must follow a course that fits Mexico. Let us join together in restoring the system that has served our country well.
At long last, Mexico is in a position to realize its potential. Our country stands ready to make the leap from poverty to prosperity, from the rule of force to the rule of law. Since the early 1980s, Mexico has undergone a painful yet necessary transformation. We have prodded Mexico to the doorstep of the democratic, free-market world. Mexico must not retreat from our country's march of progress. We should step up our efforts to guide our country into the 21st century. Through renewed emphasis on improving the efficiency of the Mexican economy, we can expand exports and generate millions of new jobs. At the same time, economic reforms go hand-in-hand with the transformation of our political system. We have come much too far to turn back now.
You have had an opportunity to consider three Futures for Mexico. Now it is your turn to look at each of the Futures from your own perspective. Try each one on for size. Think about how the Futures address your concerns and hopes. You will find that each has its own risks and trade-offs, advantages an disadvantages. After you complete this worksheet, you will be asked to develop your own Future for Mexico.
Which of the Futures below do you prefer? Rank the Futures, with "1" being the best Future for Mexico to follow:
|Future 1: Justice for the People||Future 2: Restore Order and Stability||Future 3: Embrace the Future|
Rate each of the statements according to your personal beliefs:
1 = Strongly Support;
2 = Support;
3 = Oppose;
4 = Strongly Oppose;
5 = Undecided.
___To move forward, Mexico must first overcome its history of injustice and exploitation.
___Mexico has an opportunity to eventually join the ranks of the developed nations if our country holds steady to the course of reform.
___Closing the gap between the rich and the poor in Mexico is more important than achieving high rates of economic growth.
___Rapid change threatens to plunge Mexico into chaos and violence.
___Linking our country closely to the United States is the surest route to prosperity for Mexico.
___Democracy is a worthy goal only to the extent that it puts power in the hands of the common people.
___The United States seeks only to take advantage of Mexico's weaknesses.
___The free-market economic system and democracy are the only realistic options available to poor countries seeking to advance.
___A strong, central government is Mexico's best bet for promoting stability and prosperity.
Your next assignment is to create a Future that reflects your own beliefs and opinions. You may borrow heavily from one Future, or you may combine ideas from two or three Futures. Or you may take a new approach altogether. There are, of course, no perfect solutions. And there is no right or wrong answer. Rather, you should strive to craft a Future that is logical and persuasive. Be careful of contradictions. For example, you should not propose raising trade barriers to protect Mexican industries if you believe that NAFTA is crucial to Mexico's development.
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