Consequences of the Globalization in México.

By Roberto Mercado AncerMonterrey, MexicoDecember 2015

May be the first time that was used the word “Globalization” referring at the mode that we are living, was in 1983.

In that year professor Theodore Levitt wrote an article called “The Globalization of Markets” at Harvard Business Review, and the history begins.

Source: Financial Times

Three years later Mexico became a member of the General Agreement on Tariffs and Trade (GATT, nowdays OMC).And only eight years after that, in 1994, México became a member of the North America Free Trade Agreement (NAFTA), the other two members were USA and Canada.But what happens in Mexico before the sign of these two agreements?

The minimun wage in the country decrease from $ 800.00 dolars a month in the 70s to $ 200.00 dolars a month in the 90s (time were the agreements was signed), and nowdays the minimun wage remains in the same level.

Minumun wage a month in the 60s and 70s with this two presidents. (Current mexican pesos).

Minimun wage in the 80s. In the presidential period of Miguel de la Madrid, the minimun salary drops in 49 % and in this period, Mexico enter in the GATT.

Minimun wage in current mexican pesos in the 90s with this two presidents. In this period, Mexico became a member of the NAFTA.

Minimun wage in the 2000s with this two presidents both of the same politic party (PAN) first party to win the presidential elections in more tan seventy years with presidents of the PRI.

Current President: Enrique Peña NietoPresidential Period: 2012-2018Current minimun wage a month: $ 1,869 MXP about 120 USD, about $ 200 Purchasing Parity Power, Dollars. (Source: National Statistic Institute of Mexico, INEGI).

In the last 40 years the minimun wage in Mexico decrease to a quarter from $ 800 purchasing power parity dollars (PPP) to $ 200 PPP dollars nowdays.

This instrument was stablished to become a Mexico “competitive” to Foreing Investment.

Mexico became in an assembly plant country. Mexico is considerated a Middle Income Country, of course that the

income per capita increase, but 40 % of this national income returns to the owners of the capital.

Today the Income per capita is $ 16,500 dollars but the Net Income per Capita is only $ 9,860 dollars. (Source: Wolrd Bank).

Also the inequality increase in the country. The Gini Coefficent at the begining of the XXI century was 44.3 and right now the Gini Coefficent is 48.1 (Source: Wolrd Bank).

This is the result of the globalization in my country. The minimun wage decrease to a quarter from $ 800 dollars to $ 200 The inequality increases The capital became foreign The finantial system is in foregin hands (The majority of the comercial

Banks are foreing). And the majority of the industries are foreing too.

As we can see in the following charts, Mexico receive a mínimum resources in ODA

The main channels of financing in Mexico are: DOMESTIC RESOURCE OF MOBILIZATION Foreing Investment

Mexico delivered his productive plant to foreing multinational enterprises, and this is the result in dropping wages in the country.

To Achive the Sustainable Development Goals (SGDs), Mexico needs to implant an effective Public-Private-Partnership, to reduce the proportion of the capital in foreing hands, and to attend the needs of the population that is not attended, and with this, reduce the inequality.

END