MEXICO- KEY HISTORICAL FACTS

Mexicans attribute the origins of their political system to the Revolution of

1910-20.
They cite the constitution of 1917 as the foundation of their modern political
institutions and practices.
Mexico’s governing institutions and political culture also bear the imprint of
three centuries (300 years) of Spanish colonial rule.
Key Features:
 Acceptance of heavy state involvement in business and civic affairs
 Power of the executive over the other branches of government traced to
the administrative and legal practices of the colonial period.
 Traumatic experiences of the 19th century, including foreign military
occupation and the loss of half of the national territory to the USA.
 Disillusionment brought on by a series of unconstitutional regimes. All of
the above continue to have a profound impact on contemporary Mexico.

Firstly, there is little doubt that Mexico exhibits numerous qualities of most
other Third World countries.
Key Challenges
One of its key challenges is in the area of rural development- the challenge
being how to use it as an engine of industrial development.
In the 1970’s and 1980’s, government action in these areas had been
inadequate. This is evidenced in high rates of poverty and mass- scale
migration to the cities.
Such mass migration has in turn created another problem- massive squatter
camps and shacks with very poor living conditions (poor sanitation, no safe
drinking water) and a high rate of urban poverty. Urban housing is one of the
most serious challenges facing the country.
Similar to other Third World nations, the Mexican government has tended to
spend more on the military and administrative expenses, leaving little for
investment in:
  public services
 social welfare
 research and technology.
There is also a high dependency rate on foreign capital.
Many scholars have noted that Mexico is well endowed with abundant oil
reserves, and, in this regard, is different from most Third World countries
which do not possess such precious resources.
The country in fact has the highest oil reserves in the world, yet its
development has been plagued by numerous challenges, including the
following:
 Inflation
 Lack of confidence by foreign investors
 High level of unemployment
 Lack of clear policy direction.

A Search for Solutions?

As a way of seeking to address these challenges, in the early 1980’s, the state’s
involvement in the economy increased. This means that there was direct
ownership of major industries such as oil and banking.
There were also other interventions such as:
 extensive regulation of private industry
 regulation of exports and imports
 increased drive to attract foreign investment
However, these interventions failed to yield the necessary results, leaving the
majority of the rural population in poverty.
Though the Mexican government recognises the importance of rural
development, it has always had difficulty in finding the means as well as the
will to bring about the desired reforms, hence continued reliance on the
import of wheat (the staple food). This speaks to the problem of lack of food
security, a common challenge among Third World nations.
Still on the issue of rural development, several scholars have argued that poor
agricultural policies have been a major factor contributing to the country’s
challenges:
 Neglect of rural small farmers has continued, in favour of commercial
agriculture.
 Public investments in agriculture have decreased -a big problem for a
country with a huge rural population.

Mexico in the Global Economy

Firstly, it is worth noting that Mexico’s dealings with the global economy have
undergone important shifts in recent decades.
Traditionally, and for a long time, the economy was reliant on exports of
coffee, cotton and sugar.
It only started trading in oil in 1974, and since then, oil has become the most
important commodity in the country’s foreign trade.
Worth also noting is that the country’s most productive industries were initially
foreign-owned, however the government later moved to protect the country’s
resources through the policy of what it termed “Mexicanization; a form of
localization.
This involved the restructuring of foreign ownership in key economic sectors
including:
 communication
 mines
 other natural resources
The state played a central role in this process, assuming control of:
 public utilities
 basic heavy industries
 some mining enterprises.
Though there were varied results, the overall outcome of these measures was
not satisfactory, leading to further (and lingering) economic, social and political
problems.

Debt
Within the context of the global economy, Mexico’s other major challenge is its
foreign debt. The country is one of the most heavily indebted countries in the
world, a status it has held for several decades.
For example, by the end of 1987, Mexico’s debt had surpassed $105 billion-
most of it attributed to the world energy crisis of 1973-74 when Mexico was
still a net importer of oil.
By the year 2000 and beyond, the debt had worsened due to a number of
reasons, including the following:
 poor fiscal policies
 reckless spending
 corruption

Mexico has also been adversely affected by a number of systemic weaknesses:

 Its development efforts have been damaged by erratic fluctuations in
the international economic environment
 Poor organisational capacity within the state itself
 Poor self-discipline, leading to reckless spending
 Greed and corruption have caused many development programs to go
wrong due to leakage of funds to corrupt officials.
 Poverty in Mexico is widespread in both urban and rural areas. Policies
to mitigate poverty are piecemeal and inadequate.
 The state of public health is poor

What Next?