POLITICS IN MEXICO LUIS ESTRADA Spring quarter 2005

Macroeconomic Stability Washington Consensus Washington Consensus Interest rate Interest rate Exchange rate Exchange rate Inflation rate Inflation rate Fiscal deficit Fiscal deficit

North America Free Trade Agreement (NAFTA) Origin: Bilateral trades between U.S. and Canada (1988), and U.S. and Mexico (1990). NAFTA started in 1994 Origin: Bilateral trades between U.S. and Canada (1988), and U.S. and Mexico (1990). NAFTA started in 1994 NAFTA promotes free flow of goods NAFTA promotes free flow of goods FTA: Does not apply uniform customs (each maintain their own external tariffs); does not envision free flow of labor or financial services, as the EU FTA: Does not apply uniform customs (each maintain their own external tariffs); does not envision free flow of labor or financial services, as the EU

North America Free Trade Agreement (NAFTA) Does not represent a threat to sovereignties (no supranational regulatory agencies –European parliament; or common currency) Does not represent a threat to sovereignties (no supranational regulatory agencies –European parliament; or common currency) Geographical, cultural, and economic differences between EU and NAFTA Geographical, cultural, and economic differences between EU and NAFTA Canada: land; Mexico: labor; USA: money and technology Canada: land; Mexico: labor; USA: money and technology

North America Free Trade Agreement (NAFTA) For Mexico: Seal of approval of quality that may attract further FDI For Mexico: Seal of approval of quality that may attract further FDI For USA: Stop the flow of Mexican immigrants, look after the oil, and guarantee Mexican support in the international arena For USA: Stop the flow of Mexican immigrants, look after the oil, and guarantee Mexican support in the international arena For Canada: Avoid to be isolated from a bilateral agreement between Mexico and USA For Canada: Avoid to be isolated from a bilateral agreement between Mexico and USA

North America Free Trade Agreement (NAFTA) Trade has increased, but is mostly bilateral (Canada-USA; Mexico-USA) Trade has increased, but is mostly bilateral (Canada-USA; Mexico-USA) FDI increased in Canada and Mexico increased since 1994 FDI increased in Canada and Mexico increased since 1994 Maquiladoras in Mexico expanded Maquiladoras in Mexico expanded The whole success of NAFTA is tied to the US economy The whole success of NAFTA is tied to the US economy

Fighting Poverty: PRONASOL Programa Nacional de Solidaridad (Solidarity National Program) Programa Nacional de Solidaridad (Solidarity National Program) Compensation for Salinas’s economic policies ( ) that included restrict monetary policies and massive lay offs (SOEs) Compensation for Salinas’s economic policies ( ) that included restrict monetary policies and massive lay offs (SOEs) Salinas’s PhD dissertation at Harvard Salinas’s PhD dissertation at Harvard Social ‘interventionism’ a.k.a. Social Liberalism (Juárez and Zapata) Social ‘interventionism’ a.k.a. Social Liberalism (Juárez and Zapata)

Fighting Poverty: PRONASOL State delegates provide the resources to start/complete basic public works and the community provides labor; channeled credit to small and micro businesses State delegates provide the resources to start/complete basic public works and the community provides labor; channeled credit to small and micro businesses Gives the impression that everybody counts Gives the impression that everybody counts Concentrates the power of allocate resources in the president, bypassing the governmental and partisan structures (traditional) –constant campaigning Concentrates the power of allocate resources in the president, bypassing the governmental and partisan structures (traditional) –constant campaigning

Fighting Poverty: PRONASOL Created networks of support based on the management of public resources (since Salinas was the Secretary of Budget and Planning) Created networks of support based on the management of public resources (since Salinas was the Secretary of Budget and Planning) PRONASOL was directed specially to those urban poor that voted PRD in the previous election (Michoacán; Chalco- Solidaridad) PRONASOL was directed specially to those urban poor that voted PRD in the previous election (Michoacán; Chalco- Solidaridad)

Fighting Poverty: PRONASOL PRONASOL/President Salinas were more popular than the PRI/Government (1991 was a vote for Salinas, not the PRI) PRONASOL/President Salinas were more popular than the PRI/Government (1991 was a vote for Salinas, not the PRI) PRONSAOL delegates > State governors (lack of budget control) PRONSAOL delegates > State governors (lack of budget control) A new political party? A new political party? PRONASOL alleviated social stress caused by neo-liberal economic policies PRONASOL alleviated social stress caused by neo-liberal economic policies