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Context of '1984-December 1988: Mexico Privatizes Hundreds of State-Owned Enterprizes'

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A combination of factors puts the Mexico into a major balance of payments crisis. US Federal Reserve Bank Chairman Paul Volcker’s decision to increase the Federal Reserve’s interest rate (see October 6, 1979) increases the amount of debt held by the Mexican government. In addition, a decrease in the global price of oil and a recession in the US (thereby decreasing US demand for Mexican goods) makes it harder for Mexico to pay off the debt on its own. The Mexican government decides to devalue the peso, its national currency, by 78 percent. (Hart-Landsberg 12/2002)

The Mexican government temporarily suspends payments of its foreign debt and requests that the US offer some form of emergency aid. It also devalues the peso again by 60 percent. (Hart-Landsberg 12/2002)

The Mexican government, in 1984, controls about 1,212 firms and entities. By December of 1988, this number will be reduced to 448 through a massive privatization program. (Hart-Landsberg 12/2002)

Financial sources inform media outlets that the Mexican government’s failure to cut its budget deficit in accordance with an IMF austerity program may jeopardize its access to $908 million worth of assistance. This news comes at about the same time as an earthquake hits Mexico that will require the government to spend even more on reconstruction, thereby increasing the deficit. The IMF says that it will not make any exception as a result of Mexico’s fiscal needs following the earthquake. (Kristof 9/20/1985, pp. A6)

In preparation for the North American Free Trade Agreement (NAFTA), Mexico opens up its financial services to foreign ownership. By 2000, 85 percent of the banking system will be owned by foreign entities and lending to Mexican businesses will have dropped from 10 percent of the GDP to 0.3 percent. (Jones 3/2007, pp. 3)

A 15-year period begins during which most trade barriers between the US, Canada, and Mexico will be dismantled in accordance with NAFTA. The New York Times comments: “The government has taken few steps, however, to prepare smaller and medium-sized companies, poor farmers, and inefficient industries for the new competition. Even after a wave of industrial restructuring that cost half a million Mexican jobs, worker re-training programs are almost nonexistent.” (Golden 1/1/1994)

Packages containing fake bombs, carrying return addresses of Southwest Indian Nations and All Nations Militia, are mailed to prosecutors and federal judges in Colorado and New Mexico. The perpetrators are never identified. (Southern Poverty Law Center 6/2001)

Mexico bans the planting of genetically modified crops. (Gerdes 7/9/2002)

Grupo Maseca, Mexico’s top producer of corn flour, says it will phase out its use of genetically modified corn. Mexico purchased $500 million of US corn in 1998. (Food & Drink Weekly 9/13/1999; Reynolds 10/8/1999)

New Mexico’s state legislature passes Senate Bill 204, which revokes the state’s lifetime ban on convicted felons exercising the right to vote. Before the passage of the bill, a New Mexico citizen convicted of a felony could never vote again. Under the new law, ex-felons who have completed their sentences, as well as offenders who have completed probation or parole, are automatically allowed to register to vote. No application process is enacted. This law reinstates the rights of some 50,000 New Mexico citizens to vote. (New Mexico Legislature 2001 pdf file; ProCon 10/19/2010)

Around 100,000 farm workers march to the main square of Mexico City to protest the removal of duties on farm imports that occurred just weeks earlier (see January 1, 1994). They demand that the government renegotiate NAFTA to better protect Mexican agricultural producers. (Moreno 2/1/2003; Fanjul and Fraser 8/2003, pp. 23 pdf file)

President Bush telephones Mexican President Vicente Fox to discuss Mexico’s stance on Iraq. Shortly after the phone call, the Mexican government issues a 2-page policy directive backing Bush’s policy on Iraq. It states that its position is that Iraq must disarm immediately and makes no mention of the weapons inspections. “Nothing is more urgent, no time can be lost in achieving this objective,” it says. The last point of the directive notes the importance of Mexico’s relationship with the United States and the need to have a policy based on Mexico’s national interests. “We know that this issue is of critical importance to the United States and to the Bush administration,” the directive also says. (Associated Press 2/26/2003)

The Mexican government, after weeks of negotiation with protesting farmers (see January 30, 2003), signs the National Rural Accord (also known as the National Agreement for the Countryside and the Development of Rural Society). The accord announces that the government will make “sweeping changes to rural infrastructure and state farm policy to modernize Mexico’s outdated agricultural system.” As part of the agreement, Mexico will also ask the US and Canada to allow for protection of Mexico’s rural economy, and review the possibility of implementing mechanisms against dumping and unfair competition. (Jordan 4/28/2003; Fanjul and Fraser 8/2003, pp. 23 pdf file)

In response to a suggestion by Mexico that it will put tariffs on corn to protect domestic farmers from subsidized US corn (see April 28, 2003), the Chairman of the US Senate Committee on Finance, Charles Grassley, writes a letter to Mexican officials stating: “Mexico has recently undertaken a number of actions against US agricultural products that undermine the spirit, if not the law, of NAFTA. Mexico’s continued pattern of not meeting its international trade negotiations is unacceptable.” (Fanjul and Fraser 8/2003, pp. 23 pdf file)

Kyle Sampson, a counsel for Attorney General John Ashcroft in the US Department of Justice (see 2001-2003), refers to US Attorney David Iglesias of New Mexico (see October 18, 2001) as a “diverse up-and-comer; solid.” (Thomas 2011)

New Mexico Governor Bill Richardson will later report that this evening, New Mexico’s Urban Search and Rescue Team leaves for Baton Rouge, where they will receive specific instructions on deployment. He also orders 200 members of the New Mexico National Guard to leave immediately. (New Mexico 8/30/2005; Newsweek 9/14/2005) New Mexico’s National Guard will be held in New Mexico, however, until they receive the required mission assignment from the Pentagon late Thursday, September 1 .

New Mexico Governor Bill Richardson will call Governor Blanco today to offer assistance by providing National Guard troops from his state. Paul Shipley, Richardson’s representative, later recalls, “We were ready to go. We had offered our help.” (National Public Radio 9/9/2005) Florida Governor Jeb Bush and state emergency officials also reportedly offer their assistance to both Louisiana and Mississippi. (Kam and Gomez 9/10/2005) New Mexico will deploy an urban search and rescue team to Louisiana on Monday (see Evening August 29, 2005), but its National Guard will not arrive until Friday.


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