Public Policy in Mexico

Caroline MorelockGrant Harris Ryan Campbell

An Overview of Mexico’s Economy Through The Years Betwe

en 1940 and

1960 economic

prosperity in Mexico was boomi

ng. This

period was

know as

“The Mexic

an Miracl

e”

By the early 1970s things starte

d going downh

ill

By 1987, Mexic

o’s debt was over $107

billion, makin

g it one of

the most

indebted

countries in the

world.

Economic

Reform

The Mexican Miracle

Between 1940 and 1960 Mexico’s economy grew as a whole by more than 6% a year

During this time industrial production and manufacturing both rose, however agriculture production dropped.

All this growth occurred without much inflation, unlike other Latin American economies at that time

Problems from the Mexican Miracle A growing gap between the rich and the

poor from such rapid economic growth From 1940-1980 Mexico’s income distribution

was among one of the most unequal of all LCDs

The bottom 40% of the total population only earned 11% of wages

Rapid and unplanned urbanization led to many of Mexico’s major cities to become “urban nightmares” Millions of people lived in shantytowns Traffic was among the worst in the world Pollution from all of the cars and factories

made Mexico City’s air unsafe to breathe

Shanty Town

The Beginning of the Downward Spiral

Mexico’s rapid economic growth was largely due to their oil

When the price of oil dropped in 1982, Mexico’s economic prosperity went down too

By 1987, Mexico’s debt was over $107 billion, making it one of the most indebted countries in the world.

Economic Reform

President Miguel de la Madrid began a reform program in Mexico when he came into office in 1982 The program was continued by later

presidents Salinas and Zedillo. It was one of the most dramatic

economic turnarounds in modern history

How The Reform Worked

Sharp cuts in government spending Thousands of jobs were cut, subsidies to

government agencies were cut, and hundreds of public enterprises were eliminated

The US agreed to reduce interest rates on loans and allowed longer terms for them to be repaid. However, Mexico still pays around $10 billion

a year on interest payments The government privatized many public

enterprises, especially those costing public money

Effects of the Reform

Today, Mexico’s economy is not nearly as dependant on oil production

Income inequality, urban planning and pollution are still big problems

In 2004 the economy grew by 4.1%, but about 40% of the population is still below the poverty line

Trade Agreements

Since the mid-1980s Mexico has entered trade agreements and organizations to globalize its economy and to get out of debt GATT/WTO- General Agreement on Tariffs

and Trade/ World Trade Organization NAFTA- North American Free Trade

Agreement▪ The Zapatistas, an ethnic group in Mexico,

protested the signing of the NAFTA treaty

Foreign Policy with the US Mexico’s foreign policy

is concerned with the US more than any other country

The Maquiladora District Lining the boarder

between Mexico and the US this is a manufacturing zone that accounts for over 20% of Mexico’s industrial labor.

The US also uses this zone for their industry and have been criticized for not abiding by employment or environmental regulations

Foreign Policy with the US (cont.)

Immigration policies President Vincent Fox really wanted to

reduce tension between the US and Mexico concerning immigration and pushed for an immigration initiative that had a guest worker program

US President George W Bush was in favor of Fox’s plan, but after the 9/11 attacks the plan fell through due to security risks.

In 2006 President Bush signed a bill allowing 700 miles of fencing to be put up on the boarder. ▪ Current President Felipe Calderón strongly

disagreed with the idea of a fence

Drug Trafficking

Drug trafficking has been a major problem between Mexico and the US

The drug trade led to much of the corruption that is seen in Mexico today

Felipe Calderón has really been committed to the war on drugs during his presidency

The US has stepped in by sending in members of the CIA and helped track down prominent drug traffickers

Factions in Mexico

Factions are called CamarillasBased on personal ties of trustThey determine who rises through

the political ranks of the political system

Members are from diverse political, professional, ideological, and criminal backgrounds

Democracy in Mexico

One of the most important indications of democracy in Mexico is the development of clean, competitive elections

The IFE (Instituto Federal Electoral)- regulatory body to safeguard honest elections

Election reforms from the IFE include: Campaign finance restrictions Critical media coverage International watch teams Election monitoring by opposition party

members

Population Issues

Since the 1940s Mexico’s standard of living has greatly improved

Infant mortality rates, literacy and life expectancy have improved as well

There is a wide gap between the rich and the poor, even though there has been a growing middle class in the north