Theory and Practice
Chapter 6: Mexico’s Economic Development
Page 207 6. Mexico's Economic Development The Mexican economy has been at the forefront of North American economic news since 1982. On many occasions, this prominence was due to the fact that the country's policy makers were being castigated for gross mismanagement of the economy. On other occasions, it was because Mexico was being held up as a showcase of International Monetary Fund and World Bank stabilization and structural adjustment policies. What has remained unchanged throughout these contrasting scenarios is Mexico's inability to recover the historical growth rates that it enjoyed during the 1950s and 1960s. As outlined in Chapter 3 and confirmed in Chapters 4 and 5 is that this scenario is also consistent with the experience of Mexico's two NAFTA partners. Economic development has been postponed repeatedly as a vicious policy cycle heaped hardship on the population. A chronology of key postWorld War II events in Mexico illustrates this point well: l l l l l 1950s–1960s Sustained economic growth with low inflation and a stable peso. 1970–77 Rising inflation and external debt culminating in a major peso devaluation in 1976. 1978–81 Rapid economic growth based on oil exports. 1982 External debt crisis triggered by external shocks and economic mismanagement. 1983–85 Refusal to participate in a Third World debtors' cartel. Adoption of strong stabilization policies to become the IMF model ‘adjusting country’. Page 208 l l l l l l l l l l l l l 1985 Major currency devaluation. Earthquakes in...
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