Unit 8- Mexico

8.1:

• Guatemala and Mexico iffy; Belize and Mexico are fine

• Geographic Setting

  • Mexico includes coastal plains, high plateaus, fertile valleys, rain forests, and deserts within an area slightly less than three times the size of Texas.

  • North and South Divide (North is more developed while the south is more rural/poorer)

    • Mexico’s geography makes communication and transportation between regions difficult (infrastructure is expensive).

  • Second-largest nation in Latin America after Brazil. It’s the most populous Spanish-speaking country in the world.

  • Sixty percent of the population is mestizo, or people of mixed indigenous and Spanish ancestry

    • About 30 percent of the population claims descent from Mexico’s original inhabitants, although only 6.5 percent speak an indigenous language.

  • Mexico has become a largely urban country in the second half of the twentieth century.

  • Economic opportunity (in Mexico and beyond) has created issues around human migration (rural —> urban/ south —> north) (Central America —> Mexico —> USA).

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• Critical Junctures:

  • Independence, Instability, and Dictatorship (1810–1910)

    • 1910: Mexican Revolution

  • The Mexican Revolution and the Sonoran Dynasty (1910–1934)

  • Lázaro Cárdenas, Agrarian Reform, and the Workers Movement (1934–1940)

  • The Politics of Rapid Development (1940–1982)

    • Mexican Miracle

  • Crisis and Reform (1982–2000)

    • The end of PRI’s dominance

  • Since 2000: Mexico as a Multiparty Democracy

8.2

State and Economy brief history

• During the Porfiriato, policy makers believed Mexico could grow rich from the export of raw materials.

• This made Mexico an attractive investment opportunity for non-citizens.

• The nationalist reaction to this outside influence contributed to the Revolution of 1910.

• Post-1910, Mexico adopted the strategy of state capitalism (when the state encourages and manages production of goods and services)

• Import Substitution Industrialization (ISI): instead of importing, we are going to substitute it with producing goods domestically (domestic > international production); 1940-1982

  • 1940-1950: average GDP growth of 6.7%, manufacturing increased 8.1% on average (2% GDP growth is considered good)

  • Positive side of ISI: growth in agricultural production, spread of new technologies, improved standard of living, “Mexican Miracle” (period of rapid increase of quality of life in Mexico)

  • Consequences of ISI (1940-1982):

    • ISI limited the potential for growth.

    • The cost of subsidies continued to rise and subsidized companies had little incentive to produce efficiently.

      • If you know the government is going to give you money, what reason do you have to compete, innovate, be efficient, etc.

    • Poverty: widespread, many Mexicans couldn’t afford to consume the products being produced under ISI policies

      • Urban poor (informal sector- engaging in their own economic system) and peasant farmers

      • No one had to money to purchase these manufactured goods

    • Much of the discontent around ISI and its impacts led to public protests in the 1960s and beyond

• Sowing the Oil and Reaping a Crisis

  • Mid-way through PRI’s domination and was desperate to please the general public

  • The issues on the previous slide, plus a global economic slowdown in the early 1970s, pushed Mexico to the brink.

    • Led to a question of political legitimacy (no one was buying what the PRI was selling because they did not have the ability to provide for people)

      • The government responded by investing in infrastructure and public industries, increasing social spending, etc. This is expensive.

  • Mexico becomes major oil exporter (late 70s-early 80s)

    • Yom Kippur war, hostage crisis, revolutions all in the Middle East —> Mexico gained strength via oil wealth because Middle Eastern oil was disrupted

  • The new policy was “sow the oil” and “administer the abundance.”

    • Similar to how Middle Eastern countries abuse their power via oil wealth

    • Around this time, oil accounted for 4/5 of Mexico’s exports (extensive oil reserves in the Gulf of Mexico that both Mexico and the US draw out of)

  • This over-reliance on petroleum exports made Mexico susceptible to global price changes

    • Majority of the economy relied on the sale of 1 product… supply and demand directly harmed/benefitted the economy

    • early-mid 1980s: oil producing countries (Middle East, west Africa, Latin America) were producing too much (over abundance of supply) —> prices of oil tanked (Mexico’s GDP dropped too)

      • Mexico couldn’t pay interest on it’s foreign debt… which triggered an economic crisis (because of ISI and political legitimacy questions around the PRI, debt accumulated)

      • Political implications: PRI became VERY vulnerable (1988 election: 1st time that the PRI faced a serious challenger in a presidential election)

      • Economic implications: people lose jobs, don’t have as much money, can’t afford goods and services —> people realized ISI didn’t work (oil wealth masked it)

• New Strategies: Structural Reforms and NAFTA

  • Between 1988-1994: Mexico abandoned the ISI —> free-market policies

    • Free-market economic principles include deregulation, privatization, etc.

      • Under ISI: The government managed the economy, lot more nationalization and public ownership

        • Privatized industries skyrocketed, lifted regulations, eliminated lots of subsidies, let the free-market dictate production

    • Soviet Union collapsed during this time

  • Free trade: limited government intervention with no tariffs

    • NAFTA (North American Free Trade Agreement) survived until 2020; replaced by the USMCA (United States Mexico Canada Agreement)

      • New trade deal

  • What’s the difference?

• The Mexican Economy Today

  • Economic importance

  • Important to the US

  • Powerhouse in Latin America

  • Remittances: someone that works in the US, if they make money in the US and send it back to Mexico

    • $42.9 billion in 2020 or 4% of GDP

    • The money is still taxed, the impact is just that these billions of dollars aren’t being spent in the US

  • Oil/PEMEX is still partially state-owned (major oil producer)

• Standards of living and quality of life rose markedly after 1940 (incl. the period with ISI)

• Government cutbacks on social expenditures in the early 1980s (they realized it was unsustainable)

  • Other Latin American countries improved social conditions more than Mexico (despite Mexico’s larger economic growth) 

• Development of a large middle class

  • Concentrated in large cities, urbanization

• Economic crisis of the 1980s

  • Southern and central Mexico are poorer, more rural, underdeveloped, and indigenous

• The disparities and shortcomings in Mexico are best explained by how Mexico’s economy grew

  • Not that Mexico’s economy grew

  • Maquiladores present in northern Mexico —> industrialization happened in northern Mexico

• Environmental Issues

  • Mexico has a high level of biodiversity —> leads to fragile ecosystems

    • Southern parts of Mexico tends to have higher biodiversity, there are coastlines, mountains, desert landscapes, etc.

    • The biodiversity does not do well with development (species respond to different things in certain ways)

      • Oil drilling (offshore mostly) = bad; industrial pollution = worse

      • Mexico has a large pork industry (deforestation; primarily in Brazil)

  • One of the first to have a National Park System established in 1930s

  • Mexico City is VERY polluted - economic growth > environmental protection

    • Now Beijing is the most polluted city

  • Severe earthquakes

• Mexico in the Global Economy

  • 1986: Mexico joins the General Agreement on Tariffs and Trade (GATT)

  • 1990s and 2000s: Mexico signs trade pacts with many countries (NAFTA)

    • U.S. recession of 2008 affected Mexico’s economy (was not strictly limited to Mexico)

  • USMCA (July 2020) under President Trump (updated version of NAFTA)

    • 79% Mexico’s exports to US

    • 43% of imports to Mexico are from US

  • COVID economy (contracted 3-4%) - still recovering

8.3

• Mexican Revolution happened in 1910 (poorly done) and ended by 1920s

  • Constitution was made

  • US model of democracy was a model for other emerging democracies (like Mexico)

    • Three Branches of Government (Constitution of 1917)

    • Similar to the U.S., a separation of powers with a system of checks and balances

    • federal system

    • bicameral legislature

• Legislature: Senate (upper) and the Chamber of Deputies (lower)

  • They are both mixed (PR and SMDP)

  • Senate

    • 128 Members

      • SMDP: 96 seats

      • PR: 32 seats

    • 3 from each of Mexico’s 31 states, plus 3 more from Mexico City

  • Chamber of Deputies

    • 500 Members

      • SMDP: 300 seats

      • PR: 200

• The Executive

  • The President and the Cabinet

    • Executive is the most powerful

    • Until the 1990s, the President selected the PRI’s next candidate and selected candidates for office (who almost always won)

      • PRI was dominant until the later 1990s, giving them this power

      • also selected gubernatorial system (governor)

    • Formal powers to initiate legislation, lead in foreign policy, create government agencies, make policy by decree, and appoint officials.

      • The power to introduce legislation as the president is not present in the US system

    • Peaceful transition of power in 2000 (PAN/Vicente Fox)

      • Vicente Fox was elected —> forced the transition of power

      • Mexico has had 4 more peaceful transitions of power since then

    • The Bureaucracy

      • Almost 1.5 million work in Mexico’s bureaucracy; additional 1 million work in state-owned industries

        • Civil service

        • Another million work in subnational government

    • The Parastatal Sector: part state; public and private industries co-existed, tied into key industries (semi-autonomous government agency who answers to the government and private corporations)

      • Composed of autonomous and semi-autonomous government agencies

      • Dominant force from 1940s development strategy to the economic reforms of the 1980s

• Other State Institutions:

  • The Military

    • Latin America’s relation with the military is rough due to mass military dictatorships throughout the region

    • In Mexico’s constitution, a line is drawn between Mexico and its military (1917)

      • Separation between the military and politics since 1946 (no political leaders who were also military officers and vise versa)

      • Still usage of military for domestic security operations (efforts of transparency in the 80s and 90s revealed the military in espionage and usage for political objectives)

    • Role in combating drug trafficking

      • Considered less corrupt than local police stations

      • Military has assumed part of the responsibility in illegal drug trafficking

  • The Judiciary

    • Similar to U.S. - district → circuit → supreme, nomination process, etc. 

    • 2024: judicial reform

      • elections instead of appointments

      • all candidates are approved by the legislature

      • 9 year terms and can be re-elected once

        • half of them are elected in 2025; other half 2027 (stagger to ensure the entire judiciary isn’t replaced all at once)

  • Subnational Government

    • Each state has its own Constitution, executive, legislature, judiciary, etc.

    • Mexico does have a federal government where the states have their own power; economic and safety issues has caused the federal government to be a bit more heavy handed

      • Most state and local governments are poor and rely on the federal government for funding

      • Such a large portion of revenue comes from oil —> money is passed down to state governments to fund initiatives

        • More revenue comes from the industrialized north

    • Mexico is undergoing a period of devolution (more power to the states)

      • Until 1989, all governors were from the PRI…

• Policy Making Process

  • President’s sexenio (one 6 year term, not eligible for re-election) is important for political life

    • President is the focal point of policy formulation and political management

    • Pretty well entrenched system in Mexico where the president does not have any public attention post-office (once out of office)

8.4

• The legislature:

  • End of 1980s, representation in Congress has become more diverse.

    • Prior, PRI had an overwhelming supermajority

  • By 2006, PRI had fewer representatives than either of it’s two main rivals

    • PAN: further right (PRI is center right)

    • PRD: liberal

      • PAN and PRD got more seats overtime

  • PRI regained control in 2009.

    • MORENA founded in 2011.

  • This has strengthened the role of the legislature (and has transformed it from “rubber stamp” legislature (a figurehead) to an actual policymaking institution (balancing the executive)

• Political Parties and the Party System

  • The PRI (Mexico’s Institutional Revolutionary Party): 37 in Chamber of Deputies, 14 in Senate

    • Corporatist representation of class interests

    • was a dominant power

    • center right (classist elites, nationalist bent)

    • opposed the mix of church and state (Catholicism and government)

  • The PAN (National Action Party): 71 in Chamber of Deputies, 21 in Senate

    • Opposed centralization and anticlericalism of the PRI

      • more ok with church and state

  • The PRD (Party of the Democratic Revolution)/MORENA

    • PRD has 0 seats

    • Morena has 253 in Chamber of Deputies, 66 in Senate

    • Populist, nationalist, leftist alternative to the PRI

  • Other parties

    • Citizen’s Movement

    • Labor Party (PT)

    • Green Party (PVEM)

    • New Alliance Party (PANAL)

      • Mexico has a 2.5% viability threshold

      • These small parties can be significant in forming alliances

• Party Voter Characteristics:

  • Typical voter for the PRI (center right):

    • Strongest in rural areas or small towns

    • Less education

    • Older and poorer

  • Typical voter for the PAN (further right/traditional conservative)

    • Northern state from an urban area (corporatist/industrialized)

    • Middle-class professional

    • High school or university education

  • Typical voter for the PRD/MORENA:

    • Young

    • Political activist (more “woke”)

    • Elementary or high school education

    • Central states in small town and urban areas

• Political Culture, Citizenship, and Identity

  • Clientelism: using your resources to get something in return/emphasizes how limited resources can be distributed for maximum political payoff

    • Sophisticated corruption

  • An increasing number of citizens are seeking to negotiate with the government

• Interest Groups, Social Movements, and Protests

  • Mexican political system responds to citizens through pragmatic accommodations (a reasonable, middle of the road, agreeable approach/unobjectionable)

  • Tradition of civil organization

    • Community and local levels are independent from politics

    • roots in the Catholic Church and the influence of the church (in Catholicism, there is a strong network of charities and doing ministry work)

  • Urban popular movements (organization in cities)

    • Tracks with increasing Mexican urbanization (Mexico City)

  • Activism focuses more on economic and environmental issues over social issues

    • less political activism, more focused on stopping the destruction caused by industrialization

8.5

• Political Challenges and Changing Agendas

  • Mexico is struggling to build a democratic and effective political system

    • Following PRI’s dominance, Vicente Fox/PAN sought to improve transparency and human rights

      • Major push to declassify police and military records —> people could see the abuses that happened (PRI used the police force and military to silence opposition and human rights abuses; they were able to hide it)

      • PAN showed up with the anti-dictatorship status

    • Additionally, Mexico is reconciling with long-standing inequalities by ensuring that women and ethnic minorities have equal access to economic opportunity, social services, and politics

      • Trying to remedy the gap in all of these issues

    • Mexico is also working to balance its strong sense of national identity with globalization and migration

      • Strong national culture is threatened by globalization and migration

    • Mexico is grappling with economic challenges, including a full embrace of the free market, regional disparities, high rates of poverty, and an urban/rural split.

    • While dramatically improved from the days of PRI dominance, Mexico is still battling corruption.

    • Mexico’s sovereignty is under threat from drug trafficking, other forms of organized crime, and cartel violence.

    • Immigration and relations with the U.S. and other Latin American countries are at the forefront

• The youth are a key demographic in Mexico.

  • Unlike European and Asian countries, the over 65 demographic is comparatively small in Mexico.

• More than half of Mexico’s population is under 30.

• Mexico’s youth have played a key role in political developments:

  • Student movement of 1968 - started the process of questioning the PRI’s legitimacy and grip on power

  • YoSoy132 - opposition to PRI’s candidate (Peña Nieto) and the 2012 election broadly - social media

• Mexican Politics in Comparative Perspective

  • Creating equitable and effective democratic government

  • Becoming integrated into a global economy

  • Responding to complex social problems

  • Supporting increasing diversity while keeping a national identity