Mexico's Oil: Catalyst for a New Relationship With the U.s.? by Manuel R. Millor

Author:Manuel R. Millor [Millor, Manuel R.]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9780429716874
Google: TiqNDwAAQBAJ
Publisher: Routledge
Published: 2019-03-04T11:11:50+00:00

Closely related to demographic growth, the high rate of urbanization causes multiple and sharp problems, among them the incapability to create urban industrial jobs in sufficient numbers, and to supply adequate social services, equal to the prevailing needs. Almost two-thirds of the Mexican population live in urban centers, and peasants continue to migrate to the cities, most of them to join the ranks of the poor, marginal population of the urban slums. Accelerated urbanization frustrates the efforts to provide adequate public services to an increasing population, and depletes resources that, otherwise, would be channeled towards the agrarian sector. Industrial and bureaucratic centralization in a few, larger cities emphasize the negative effects of urbanization.

Unemployment and underemployment represent one of the fundamental obstacles to achieving a better distribution of income. Although data is not altogether reliable, it is estimated that both of these phenomena affect close to 50 percent of Mexico's population. The main causes of unemployment are demographic growth and the situation in the agricultural sector.61 The age structure of the population determines that the country has an adult labor force of only 18 million. This means that 26 percent of the population support the remainder. Still, less than half the workers have permanent jobs. The task of bringing down the level of unemployment is staggering: The Mexican economy would have to create more than a million jobs per year.62 in other words, the indices of employment creation, 2.5 percent a year between 1950 and 1970, and 2 percent from 1970 to 1979, must be brought up to a goal of 4.2 percent, in order to safely surpass the annual increment of job demand, of 3.4 percent.63 President López Portillo is placing the hopes for employment creation on vast industrial investments.64 By September, 1981, the Mexican president was reporting that during the period 1977-1980, industrial production registered a growth of 8.1 percent per year. This contributed to the creation of 3,250,000 new jobs.65 But, in the past, because of tendencies towards capital-intensive industrialization, this scheme has been only partly successful.

Here, again, hopes are also placed on the oil industry to create jobs.66 But the petroleum industry is basically a capital-intensive industry, employing relatively few workers per plant. Thus, the success of a liaison between the oil industry and the employment market would depend, rather, on the ability to transfer funds from the first into a wide arrangement of productive activities.

In this respect, there are a number of critics who maintain that, far from representing a contribution to Mexico's economic standing, petroleum exploitation has increased its economic vulnerability. In other words, PEMEX has borrowed and spent more than it has received from its exports.67 Indeed, a number of official estimates would seem to confirm this assertion. By the beginning of 1981, the Secretary of Patrimony and Industrial Development announced that, in 1980, income from petroleum exports amounted to 10.4 billion dollars (more than twice the level of 1979), but the commercial and payments deficit grew because imports totalled 18 billion, 7 billion more than expected.

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