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Profile: Mexico

Mexico was a participant or observer in the following events:

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]

Entity Tags: Mexico, Paul Volcker

Timeline Tags: Neoliberalism and Globalization

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]

Entity Tags: Mexico

Timeline Tags: Neoliberalism and Globalization

The International Monetary Fund approves of a $3.9 billion to the Mexican government. As a condition for receiving the loan, the Mexican government is expected to engage in a series of free market reforms. Such reforms include: fiscal austerity, privatization of state-owned companies, reductions in trade barriers, industrial deregulation, and foreign investment liberalization. [New York Times, 12/24/1982, pp. D4; Global Exchange, 9/2001, pp. 3 pdf file]

Entity Tags: International Monetary Fund, Mexico

Timeline Tags: Neoliberalism and Globalization

The IMF’s recommended reforms are widely viewed to have a negative effect on the earnings of the average Mexican. For example:
bullet In the period between 1983 and 1988, per capita income falls at a rate of about 5 percent per year.
bullet In the same period, the value of workers’ real wages falls from 40 to 50 percent.
bullet The share of national income received by workers declines from 49 percent in 1981 to 29 percent in 1990.
bullet Adjusted for inflation, the Mexicans’ real wages fall by 75 percent throughout the 1980s. [Global Exchange, 9/2001, pp. 4 pdf file; Harvey, 2005, pp. 100]

Entity Tags: Mexico, International Monetary Fund

Timeline Tags: Neoliberalism and Globalization

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]

Entity Tags: Mexico

Timeline Tags: Neoliberalism and Globalization

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. [New York Times, 9/20/1985, pp. A6]

Entity Tags: Mexico, International Monetary Fund

Timeline Tags: Neoliberalism and Globalization

Around $91 billion flows into the Mexican economy from foreign investors, allowing for a certain degree of economic growth. This growth slows down in 1992, however, as trade and current account deficits increase sharply. The deficits suggest a large deterioration in the country’s economic base during the 1980s. [Hart-Landsberg, 12/2002]

Entity Tags: Mexico

Timeline Tags: Neoliberalism and Globalization

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]

Entity Tags: Mexico

Timeline Tags: Neoliberalism and Globalization

In early 1994, investors pull money out of the Mexican economy in response to an increase in US interest rates and political instability. This causes the Mexican government to lose massive amounts of reserves and lead it to allow the peso to float in December of 1994. In January of 1995 it again asks the IMF for assistance and receives packages from both the IMF and US Treasury. This time, massive privatizations of “transportation, banking and finance, railways and the petrochemical industries” were recommended as a way of paying off the loans. A devaluation of the peso in 1995 along with an IMF-mandated rise in interest rates triggers the worst depression in Mexico in 60 years. GDP falls by 6.2 percent, wages fall by 25 percent, unemployment doubles, and 12,000 Mexican firms file for bankruptcy. [Global Exchange, 9/2001, pp. 4-5 pdf file; Hart-Landsberg, 12/2002]

Entity Tags: US Department of the Treasury, Mexico

Timeline Tags: Neoliberalism and Globalization

1998: Mexico Bans GM Crops

Mexico bans the planting of genetically modified crops. [Mother Jones, 7/9/2002]

Entity Tags: Mexico

Timeline Tags: Seeds

When Dr. Ignacio Chapela, a microbial ecologist who recently discovered the presence of genetically modified (GM) genes in Mexican maize (see October 2000), meets with a Mexican agricultural official to discuss the GM contamination, he is warned not to publish his research. Chapela later recalls in an interview with BBC Newsnight, “He [told] me how terrible it was that I was doing the research and how dangerous it would be for me to publish.” When he refuses to back off the issue, the official suggests that Chapela join a research team tasked with proving that the suspected GM genes are actually naturally occuring gene sequences similar to the ones in GM corn. “We were supposed to find this in an elite scientific research team of which I was being invited to be part of and the other people were two people from Monsanto and two people from Dupont supposedly… .” Monsanto denies its scientists were involved in any such study. Chapela also meets with Mexico’s Ministry of the Environment and Natural Resources, whose officials are concerned about the discovery. They launch their own investigation and also find evidence of contamination (see September 18, 2001). [BBC, 6/2/2002]

Entity Tags: Ignacio Chapela, Mexico, Ministry of the Environment and Natural Resources

Timeline Tags: Seeds

The US, Mexico, and Canada enter into a trilateral agreement that allows food and grain shipments to have GM contamination levels as high as 5 percent. Shipments containing less than the five percent level will only have to bear a label indicating that the grain may contain genetically modified organisms. Additionally, accidental contamination of corn shipments into Mexico will not trigger any labeling requirements. Only the distributor will have to be informed of the contamination. The Mexican government enters into the agreement without the Mexican Senate’s approval. [Associated Press, 2/26/2004] Critics of the deal say the US is attempting to protect agricultural biotech companies and US agriculture. A large percentage of the country’s crop is genetically modified and as a result US farmers and biotechs are having a tough time finding markets abroad. Raising the acceptable contamination limits in other countries will help increase US grain exports. Critics also say that the deal could have a dramatically adverse effect on the genetic diversity of Mexico’s maize. It could result in the planting of more genetically modified corn since small farmers have been known to occasionally plant feed as seed. A few years before, maize growing in Oaxaca and Puebla was discovered to contain genetically modified genes (see October 2000; April 18, 2002). It is believed that the contamination was caused in part by farmers who had planted feed from local stores selling grain imported from the US. The ETC Group, a Canadian-based organization that is opposed to genetically modified crops, warns that if Mexico permits the import of grain with such high levels of contamination, the country’s “maize crop would be riddled with foreign DNA from the Rio Grande to Guatemala in less than a decade.” [ETC Group, 2/26/2004] Greenpeace believes that US efforts to convince countries to lower the accepted levels of contamination are aimed at undermining the Cartagena Protocol on Biosafety (see January 24-29, 2000), which has been set up to regulate transboundary shipments of genetically modified organisms. [Greenpeace, 2/11/2004]

Entity Tags: United States, Mexico

Timeline Tags: Seeds

McClatchy reports that economies in Latin America are beginning to improve following the global financial crisis. The signs of the recovery include a “booming” construction industry in Peru, strong property sales in Peru, and expanding software companies in Chile. However, McClatchy says that the recovery in Mexico and other Central American countries is lagging behind, due to the slow recovery in the US. Prior to the global financial crash, Latin America had experienced its best five years of prosperity since the 1950s. [McClatchy Newspapers, 9/28/2009]

Entity Tags: Peru, Brazil, Mexico, Chile

Timeline Tags: Global Economic Crises

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