The Accidental American by Rinku Sen

Author:Rinku Sen
Language: eng
Format: epub
Publisher: Berrett-Koehler Publishers
Published: 2011-04-30T16:00:00+00:00

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Mexico: Stalled Development and Emigration

It’s impossible to comprehend the migration of people like Hernandez and Salas without understanding the effect of economic globalization and internal political decisions on poor Mexicans. Over time, the Mexican government has increasingly moved toward policies designed primarily to attract foreign investment. That shift was meant to stimulate Mexico’s economy. It did so for wealthy Mexicans, but it also widened the gap between rich and poor, resulting in lower wages and living standards and forcing poor Mexicans to seek ways to migrate.

The neoliberal pattern played out especially in the agricultural sector. From 1940 to 1955, Mexico developed and subsidized farming. Specifically this included the “provision of guaranteed prices intended to increase the incomes of basic grains producers, and large-scale public investment in rural infrastructure.”5 During this period, agricultural production grew 5.5 percent per year. But growth declined to 3 percent per year during the twenty years that followed, with the most dramatic declines occurring in the late 1960s and 1970s—a time of political unrest, including large student protests against government corruption that peaked with the 1968 slaying of 300 student protesters by Mexican police ten days before the Olympics were scheduled to open. Interestingly, other sectors of the Mexican economy boomed during 1965–72, and migration to the U.S. slowed significantly during that time.

Eventually agricultural productivity slackened, meaning that Mexico could no longer produce all the food it needed for a growing population, and the country started importing grain just as global prices were rising. The government decided to invest in agriculture again in 1973, increasing subsidies from 10 to 20 percent of the national total. These new programs, which included measures like setting a baseline price for corn and creating rural aid programs like health clinics, boosted the economy again.6

In part, though, the Mexican government was funding the country by borrowing from other nations against its oil revenues. In 1976 and 1982, there were new economic crises, partly caused by the government’s inability to service its foreign debt. Each crisis caused more migration, both internally and to the United States. The 1982 debt crisis led the government to apply for an International Monetary Fund (IMF) loan that would consolidate its debt from multiple countries. The IMF was founded in 1944 to act as a global finance system that could help rebuild war-torn Europe. Its membership now includes 182 countries, with the United States as the largest investor at 17.7 percent of the shares. As the largest investor, the United States also gets the largest portion of returns (the interest paid on IMF loans) and has the power to veto any decision it considers inappropriate.7

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The IMF agreed to bail out Mexico, but only if Mexico agreed to a “structural adjustment plan,” a condition that all borrowers were obliged to accept. Structural adjustment meant that Mexico’s government-controlled economy would have to be privatized and deregulated to create a climate favorable to corporations, including foreign investors—the program known as “neoliberalism.” By 1989 the share of government subsidies that went to agriculture had fallen by 85 percent.

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