1. Mexican Military
Up to 1930, military leaders dominated Mexican politics.
PRI era instituted a civilian-controlled military.
Today, military is heavily involved in drug wars.
Some concern about corruption
Does not intervene in Mexican politics

2. Mexico: What Type of Regime?
Authoritarian in 20th century under PRI.
Which of the following apply to Mexico TODAY?
RATE MEXICO IN THE FOLLOWING CATEGORIES (1=Excellent; 5=Poor)
Political Rights and Civil Liberties
Competitive Elections
Rule of Law
Civil Society
Civic Culture
Capitalism
Independent Judiciary
Civilian-controlled Military
EMERGING/TRANSITIONAL DEMOCRACY

3. Mexican Economic Development: 1940-2006

4. “The Mexican Miracle” 1940-1980 Reasons for Success Remarkable growth
Annual Avg. GDP Growth=6.5%
Reasons for Success
Government stability
Oil Revenue
Emphasis on Industrialization
Subsidies for domestic industries
Import Substitution
High tariffs
Nationalization of industry.
Oil, railroad, electricity, & thousands of companies.

5. Parastatal
Company or agency owned (or partially owned) by the government.
Usually private sector companies in the U.S.
By 1980, the government controlled
over 1,000 firms.
PEMEX (Mexican Petroleum)
Net worth of $415 billion
Employs approx 140,000

6. Mexican Debt Crisis, 1980s-90s
Heavy borrowing to industrialize
Gambled on high oil prices
1980s: Prices DROPPED
Import Substitution=Industrial inefficiency
Uncompetitive in global market
Runaway Inflation: 1987=159%
Total Debt
1970=6 billion =80 billion
1976=26 billion =107 billion
(70% of GNP)

7. Bailout of 1995
International investors withdrew $5 billion from Mexican market.
Lacked ability to pay debt.
Borrowed $50 billion from IMF and the U.S.

8. PRI Becomes Market-Oriented
New policies of Late ‘80s through ‘90s.
Debt Reduction
Austerity Measures
Cut deficit in half in 3 years.
Raised taxes
Reduced social services
Privatization
Sold parastatals
Only about 100 left today.

9. Opening Up the Economy Protectionism to neoliberalism
Import substitution to structural adjustment
Allow FDI.
1986: Joined General Agreement on Tariffs and Trade (GATT)
Precursor to WTO.
Diversified exports (not just oil)
1992: Signed North American Free Trade Agreement (NAFTA)

10. North American Free Trade Agreement (NAFTA)
United States, Mexico and Canada
Eliminate tariff barriers
Greatly reduce
other barriers
(i.e., licensing
fees and quotas
for foreign
companies)

11. Maquiladoras Foreign-owned factories in Mexico.
Goods are imported to Mexico.
Made in Mexico.
Then exported.
Largely located in North

12. Zapatistas State of Chiapas Indigenous Mayan farmers Concerns
Abject poverty
Few elite controlled arable land (seized ejidos)
NAFTA
Ended ejidos
PRI “Democracy”
No self-rule
Elite land owners and PRI

13. Zapatistas Zapatista Army of National Liberation (EZLN)
Subcomandante Marcos
January 1, 1994 (NAFTA enacted)
EZLN seized 6 towns
Mexican army clashed with EZLN
Cease fire after 12 days
Approx died.
2001: 400,000 marched on Mexico City
Few goals realized