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Neoliberalism and Globalization

Statistics and Indicators

Project: Neoliberalism and Globalization
Open-Content project managed by AJB, mtuck

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This project will attempt to document the causes and effects of the neoliberal form of capitalism and its influence throughout the globe.

As a result of Paul Volcker’s tightening of the US money supply (see October 6, 1979), 145 developing and emerging market economies pay a total of $7.673 trillion (in current dollars) in order to service their external debts. $675 billion of this money comes from Africa, the poorest continent in the world. Despite these massive payments, the external debt held by these nations actually increases from $618 billion in 1980 to $3.150 trillion in 2006. [Nakatani and Herera, 6/2007]

Category Tags: Statistics

The breakdown of the import substitution industrialization (ISI) model of development and the advent of neoliberal economic reform in Latin America lead to what is now termed the “lost decade” due to poor economic growth in the region. From 1980 to 1990, the region’s share of the world economy slips from 6 to 3 percent. Also, its average annual percentage change of real GDP per capita growth from 1980 to 1989 is -0.4, lower than any other region in the world and significantly lower than Latin America’s previous rate of 2.5 percent for the period between 1973 to 1980. [Robinson, 1999, pp. 112-113]

Category Tags: Statistics

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

Category Tags: IMF, Mexico, Statistics

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

Category Tags: NAFTA, Mexico, Statistics

The North American Free Trade Agreement Implementation Act (H.R. 3450) is voted on by the US House of Representatives and passes 234-200. [US Congress, 11/17/1993] It is later estimated that Congresspersons who voted in favor of H.R. 3450 received an average of $8,018 more in corporate PAC contributions than those who voted against. [Francia, 1/2001, pp. 98, 103]

Entity Tags: North American Free Trade Agreement, US Congress

Category Tags: NAFTA, Statistics

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

Category Tags: IMF, Mexico, Statistics

Under NAFTA, Mexico reduces its protection of domestic corn growers. This leads to a massive influx of corn from the US, where its production is heavily subsidized. This has the effect of reducing the price of corn in Mexico by 70 percent and ruining the livelihoods of some 15 million Mexican farmers who depend on the crop for income. [Fanjul and Fraser, 8/2003, pp. 23 pdf file]

Entity Tags: North American Free Trade Agreement

Category Tags: NAFTA, Mexico, Statistics

A report by the Carnegie Endowment for International Peace finds that the positive aspects of NAFTA just barely compensate for its negative effects. Among its findings:
bullet The net jobs gain in Mexico has been surprisingly small. In fact, 30 percent of all jobs that have been created in the maquiladora sector (export assembly plants) have been lost as company operations have since moved to lower wage countries such as China.
bullet Despite growth in productivity, real wages in Mexico are lower than they were when NAFTA first took effect. Although this can partially be attributed to the Peso Crisis of 1994-1995. It is also noted that wages in Mexico are “diverging from, rather than converging with, US wages.”
bullet Income disparity has grown drastically, with the top 10 percent of households having increased its share of the national income while the remaining 90 percent has lost its share or has seen no change at all. [Papademetriou et al., 8/2003]

Entity Tags: North American Free Trade Agreement, Carnegie Endowment for International Peace

Category Tags: NAFTA, Mexico, Statistics


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