Unit VII: Towards a 21st Century Mexico: NAFTA & the Rise of PAN (7/2)

Corresponding text found on p266-309 of Concise History of Mexico.

Oil boom of 1970s greatly benefits growth of Mexican economy
By 1981, Mexico 4th largest oil exporter in world
1982 - financial crisis due to collapse of oil prices and devalued peso; unable to pay debts
Govt attempts to restructure economy through liberalization measures; de-nationalization; fewer subsidies
Bank nationalization for economic stability
1985 - major earthquake hits Mexico City; govt decides to join GATT

Mexico City after 1985 earthquake

Numerous deals with IMF
Diversification of export portfolio away from oil; more emphasis on manufacturing goods for export

July 1988 - Carlos Salinas elected President
Continues economic reforms; acknowledges Mexico cannot continue to be one-party state
Stronger executive; reform of land redistribution for ejidos law
Re-privatizes banks
Pushes issue of creation of the North American Free Trade Agreement (NAFTA)
      Sees Mexico's economic future tied to US; comparable to EU; additional trade agreements in LatAm
Dec 1992 - NAFTA signed

The signing of NAFTA

Feb 1993 - govt re-established diplomatic relations with Holy See (broken under Juarez-1867)

July 1994 - Zedillo Administration begins and faces immediate financial crisis; US financial bailout; IMF loan
NAFTA led to increase in manufacturing and export market; growth of northern state power
Opposition party PAN started to win more governor's seats

ABC News report on Mexican economic crisis of 1994

1994 - Chiapas Uprising
  - EZLN, Zapatista National Liberation Army, formed in 1980s; leftist guerrilla group; indigenous grievances
  - force used to take control of 'liberated territory'; southern heavily-indigenous regions
  - opposed neo-liberal ideology of Mexican govt
  - Catholic bishop brokered peace deal; Zapatistas gave up armed control of territory

Globalization had continuing effects on Mexican economy through 1990s
  - oil market drop in late 90s
  - Asian economic slow down of late 90s
Dynamic power struggle in elite circles between industrialists on northern states who want policies that promote exports and capital investment versus traditional nationalists
1998 - oil production agreement reached between Mexico, Venezuela, and Saudi Arabia to stabilize prices

2000 - Guanajuato governor Vicente Fox, PAN candidate, wins presidency; 1st ever

Vicente Fox

PEMEX revenues high in 2000s due to high oil prices; high taxes owed state leave little for investment
Economic slow-down of early 2000s and growth of China export economy led to high unemployment
Fox attempted to put Mexico on global stage; reform NAFTA to allow for free movement of labor
By 2002, Mexico had grown to world's 9th largest economy; hosted global summits

Modern Mexico City: A signal of prosperity

Shadow of growing drug trade in Mexico loomed large; 2005 US State Dept Report
  - 90% of US cocaine shipped through Mexico
  - 2nd largest supplier of heroin

Drug trafficking: The dark side of the modernization of Mexico

PAN's (conservative, business oriented) tepid relationship with the Catholic right in Mexico
2002 - Pope John Paul II made 5th trip to Mexico; canonized Juan Diego; Fox kissed ring