Editing Economy of Mexico (section)

==History==
{{Main|Economic history of Mexico}}
[[File: Porfirio Diaz in uniform.jpg|thumb|left|200px|[[Porfirio Díaz]], (1876–1911) in whose presidency rapid industrialization took place in foreign capital.]]
The [[Porfiriato]] brought unprecedented economic growth during the last quarter of the nineteenth century.<ref>Garza, James A. "Porfirio Díaz," in ''[[Encyclopedia of Mexico]]'', 406</ref> This growth was accompanied by foreign investment and European immigration, the development of railroad networks and the exploitation of the country's natural resources. Annual economic growth between 1876 and 1910 averaged 3.3%.<ref>{{cite web |title=Desarrollo Económico |url=http://www.itcomitan.edu.mx/tutoriales/esmexico/UNIDAD2.htm |access-date=February 17, 2007 |archive-url=https://web.archive.org/web/20070202005136/http://www.itcomitan.edu.mx/tutoriales/esmexico/UNIDAD2.htm |archive-date=February 2, 2007 |language=es |url-status=dead  }}</ref> Large-scale ownership made considerable progress while foreign land companies accumulated millions of hectares. At the end of [[Porfirio Díaz]]'s dictatorship, 97% of arable land belonged to 1% of the population and 95% of peasants were landless, becoming farmworkers in huge haciendas or forming an impoverished urban proletariat whose revolts were crushed one by one.<ref>{{Cite web|url=http://www.profmex.org/mexicoandtheworld/volume3/3summer98/laestadistica_economicap2.html|title=PROFMEX-Consorcio Mundial para la Investigación sobre México|access-date=June 1, 2019|archive-date=June 1, 2019|archive-url=https://web.archive.org/web/20190601221638/http://www.profmex.org/mexicoandtheworld/volume3/3summer98/laestadistica_economicap2.html|url-status=live}}</ref>

Political repression and fraud, as well as huge income inequalities exacerbated by the land distribution system based on ''[[latifundia|latifundios]]'', in which large [[hacienda]]s were owned by a few but worked by [[1000000 (number)|millions]] of impoverished peasants living in precarious conditions, led to the [[Mexican Revolution]] (1910–1920), an armed conflict that drastically transformed Mexico's political, social, cultural, and economic structure during the twentieth century. The war left a harsh toll on the economy and population, which decreased over the 11-year years between 1910 and 1921.<ref name=":2">{{Cite journal|last1=Kehoe|first1=Timothy J.|last2=Meza|first2=Felife|title=Catch-Up Growth Followed by Stagnation: Mexico, 1950-2010|date=November 2011|url=http://www.scielo.cl/pdf/laje/v48n2/art06.pdf|journal=Latin American Journal of Economics|volume=48|issue=2|pages=227–268|doi=10.21034/wp.693|issn=0719-0433|doi-access=free|jstor=41959232|ssrn=1976515|access-date=December 19, 2023|archive-date=November 27, 2023|archive-url=https://web.archive.org/web/20231127214223/http://www.scielo.cl/pdf/laje/v48n2/art06.pdf|url-status=live}}</ref> The reconstruction of the country was to take place in the following decades.

The period from 1940 to 1970 has been dubbed by economic historians as the [[Mexican Miracle]], a period of economic growth that followed the end of the Mexican Revolution and the resumption of capital accumulation during peacetime. During this period, Mexico adopted an [[import substitution industrialization]] (ISI) model, which protected and promoted the development of national industries. Mexico experienced an economic boom through which industries rapidly expanded their production.<ref name="Crandall">
{{Cite book | last=Crandall | first=R | chapter=Mexico's Domestic Economy | editor-last=Crandall | editor-first=R | editor2-last=Paz | editor2-first=G | editor3-last=Roett | editor3-first=R | title=Mexico's Democracy at Work: Political and Economic Dynamics | publisher=Lynne Reiner Publishers | date=September 30, 2004 | isbn=1-58826-300-2 | chapter-url=https://archive.org/details/mexicosdemocracy0000unse | url-access=registration | url=https://archive.org/details/mexicosdemocracy0000unse }}</ref> Important changes in the economic structure included free land distribution to peasants under the concept of ''[[ejido]]'', the nationalization of the oil and railroad companies, the introduction of [[Economic, social and cultural rights|social rights]] into the [[Constitution of Mexico|1917 Constitution]], the birth of large and influential [[Labor unions in Mexico|labor unions]], and the upgrading of infrastructure. While the population doubled from 1940 to 1970, GDP increased sixfold during the same period.<ref>{{cite web|url=http://www.uv.mx/invest/Econom%EDa%20Mexicana-%20Retos%20y%20Perspectivas%20en%20el%20Siglo%20XXI%202.ppt |archive-url=https://archive.today/20121209032514/http://www.uv.mx/invest/Econom%EDa%20Mexicana-%20Retos%20y%20Perspectivas%20en%20el%20Siglo%20XXI%202.ppt |url-status=dead |archive-date=December 9, 2012 |title=Retos y perspectivas de la Economía Mexicana en el Siglo XXI |access-date=February 16, 2007 |format=PPT |work=Universidad Veracruzana |language=es  }}</ref>

[[File:Jose Lopez Portillo.jpg|thumb|200px|President [[José López Portillo]] 1976–1982, during whose administration the economy soared with the discovery of oil and then crashed when the price dropped.]]
Growth, while under the ISI model, had reached its peak in the late 1960s. During the 1970s, the presidential administrations of [[Luis Echeverría]] (1970–76) and [[José López Portillo]] (1976–82) tried to include social development in their policies, an effort that entailed increased public spending. With the discovery of vast oil fields during [[1970s energy crisis|a period of oil price increases]] and low international interest rates, the government borrowed from international capital markets to invest in the state-owned oil company [[Pemex]], which in turn seemed to provide a long-run income source to promote social welfare. This produced a remarkable growth in public expenditure,<ref name="Crandall"/> and president López Portillo announced that the time had come to "manage prosperity"<ref>{{cite web |url=http://cronica.diputados.gob.mx/DDebates/53/1er/Ord/19850910.html |title=Legislatura LIII – Año I – Período Ordinario – Fecha 19850910 – Número de Diario 19 |access-date=February 16, 2007 |work=Crónicas del Congreso de la Unión |language=es |archive-date=July 6, 2007 |archive-url=https://web.archive.org/web/20070706224506/http://cronica.diputados.gob.mx/DDebates/53/1er/Ord/19850910.html |url-status=live }}</ref> as Mexico multiplied its oil production to become the world's fourth-largest exporter.<ref>{{cite web |url=http://www.inep.org/content/view/1325/41/ |title=José López Portillo y Pacheco 1920–2004 |access-date=February 16, 2007 |language=es |archive-date=December 15, 2018 |archive-url=https://web.archive.org/web/20181215123617/http://www.inep.org/content/view/1325/41/ |url-status=dead }}</ref>

{| style="width: 22em; text-align: left;" class="wikitable floatright"
|+Average annual GDP growth by period<ref name="IMF Mexico">{{cite web |url=http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2007&ey=2010&scsm=1&ssd=1&sort=country&ds=.&br=1&c=273&s=NGDPD%2CNGDPDPC%2CPPPGDP%2CPPPPC%2CLP&grp=0&a=&pr.x=21&pr.y=11 |title=Report for Selected Countries and Subjects |publisher=Imf.org |date=September 14, 2006 |access-date=April 16, 2011 |archive-date=December 15, 2018 |archive-url=https://web.archive.org/web/20181215175020/https://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2007&ey=2010&scsm=1&ssd=1&sort=country&ds=.&br=1&c=273&s=NGDPD%2CNGDPDPC%2CPPPGDP%2CPPPPC%2CLP&grp=0&a=&pr.x=21&pr.y=11 |url-status=live }}</ref><ref name="Crandall"/><ref>{{cite web|last=Cruz Vasconcelos |first=Gerardo |title=Desempeño Histórico 1914–2004 |url=http://www.imef.org.mx/NR/rdonlyres/F722BEDD-A8DE-49BA-AF4F-1A00889CE618/1192/CAPITULOI1.pdf |access-date=February 17, 2007 |archive-url=https://web.archive.org/web/20070314202223/http://www.imef.org.mx/NR/rdonlyres/F722BEDD-A8DE-49BA-AF4F-1A00889CE618/1192/CAPITULOI1.pdf |archive-date=March 14, 2007 |language=es |url-status=dead  }}</ref><ref>{{cite web | title= IMF World Economic Outlook Database, April 2010 | url= http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2000&ey=2010&scsm=1&ssd=1&sort=subject&ds=.&br=1&c=273&s=NGDP_R&grp=0&a=&pr1.x=87&pr1.y=15 | access-date= July 24, 2010 | archive-date= December 15, 2018 | archive-url= https://web.archive.org/web/20181215174547/https://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2000&ey=2010&scsm=1&ssd=1&sort=subject&ds=.&br=1&c=273&s=NGDP_R&grp=0&a=&pr1.x=87&pr1.y=15 | url-status= live }}</ref>
|-
!  style="text-align:left; background:#f0f0f0; vertical-align:top;"| 1900–1929
|  style="background:#f0f0f0; vertical-align:top;"| 3.4%
|-
!  style="text-align:left; vertical-align:top;"|1929–1945
|valign="top"| 4.2%
|-
!  style="text-align:left; background:#f0f0f0; vertical-align:top;"|1945–1972
|  style="background:#f0f0f0; vertical-align:top;"| 6.5%
|-
!  style="text-align:left; vertical-align:top;"|1972–1981
|valign="top"|5.5%
|-
!  style="text-align:left; background:#f0f0f0; vertical-align:top;"|1981–1995
|  style="background:#f0f0f0; vertical-align:top;"|  1.5%
|-
!  style="text-align:left; vertical-align:top;"|1983 Debt Crisis
|valign="top"| -4.2%
|-
!  style="text-align:left; background:#f0f0f0; vertical-align:top;"|1995 Peso Crisis
|  style="background:#f0f0f0; vertical-align:top;"| -6.2% 
|-
!  style="text-align:left; vertical-align:top;"|1995–2000
|  style="vertical-align:top;"| 5.1% 
|-
!  style="text-align:left; background:#f0f0f0; vertical-align:top;"|2001 US Recession 
|  style="background:#f0f0f0; vertical-align:top;"| -0.2% 
|-
!  style="text-align:left; vertical-align:top;"|2009 Great Recession
|  style="vertical-align:top;"| -6.5% 
|}

From 1981 to 1982 the international panorama changed abruptly: [[1980s oil glut|oil prices plunged]] and interest rates rose. In 1982, López Portillo, just before ending his administration, suspended payments of foreign debt, devalued the [[Mexican peso|peso]], and nationalized the banking system, along with many other industries that were severely affected by the crisis, among them the steel industry. While import substitution had contributed to Mexican industrialization, by the 1980, thes protracted protection of Mexican companies had led to an uncompetitive industrial sector with low productivity gains.<ref name="Crandall"/>

President [[Miguel de la Madrid]] (1982–88) was the first of a series of presidents who implemented [[neoliberalism|neoliberal]] policies. After the crisis of 1982, lenders were unwilling to return to Mexico, and in order to keep the current account in balance, the government resorted to currency devaluations, which sparked unprecedented inflation,<ref name="Crandall"/> reaching an annual record of 139.7% in 1987.<ref name="tabla">{{cite web |url=http://www.mexicomaxico.org/Voto/SobreVal02.htm |title=Valuación Peso Dolar 1970–2006 |access-date=February 16, 2007 |language=es |archive-date=February 17, 2007 |archive-url=https://web.archive.org/web/20070217180956/http://www.mexicomaxico.org/Voto/SobreVal02.htm |url-status=dead }}</ref>

One of the first steps toward trade liberalization was Mexico's signature of the [[General Agreement on Tariffs and Trade]] (GATT) in 1986 under President de la Madrid. During the administration of [[Carlos Salinas de Gortari]] (1988–94), many state-owned companies were privatized. The telephone company [[Telmex]], a government monopoly, became a private monopoly, sold to [[Carlos Slim]].<ref name=":1">{{Cite book |last=Reid |first=Michael |url=https://www.worldcat.org/oclc/262432275 |title=Forgotten continent: the battle for Latin America's soul |date=2009 |publisher=Yale University Press |isbn=978-0-300-11616-8 |location=New Haven, Conn. |pages=202 |oclc=262432275}}</ref> Also not opened to private investors were the government oil company [[Pemex]] or the energy sector. Furthermore, the banking system that had been nationalized in the waning hours of the López Portillo administration in 1982 was privatized, but with the exclusion of foreign banks.<ref name=":1" /> Salinas pushed for Mexico's inclusion in the [[North American Free Trade Agreement]], expanding it from a U.S.-Canada agreement. The expanded NAFTA was signed in 1992, after the signature of two additional supplements on environments and labor standards. It came into effect on January 1, 1994.<ref>{{Cite journal |last1=Villarreal |first1=M. A. |last2=Cid |first2=Marisabel |date=November 4, 2008 |title=NAFTA and the Mexican Economy |newspaper=Dtic |url=https://apps.dtic.mil/sti/citations/ADA490094 |language=en |access-date=July 15, 2022 |archive-date=July 15, 2022 |archive-url=https://web.archive.org/web/20220715184602/https://apps.dtic.mil/sti/citations/ADA490094 |url-status=live }}</ref>

Salinas also introduced strict price controls and negotiated smaller minimum wage increments with the labor union movement under the aging [[Fidel Velázquez]] to curb inflation.<ref name=":1" /> While his strategy successfully reduced inflation, growth averaged only 2.8 percent a year.<ref name="Crandall"/> By fixing the exchange rate, the peso became rapidly overvalued while consumer spending increased, causing the current account deficit to reach 7% of GDP in 1994. The deficit was financed through ''tesobonos,'' a public debt instrument that reassured payment in dollars.<ref name="Hufbauer">{{Citation |last1=Hufbauer |first1=G.C. |last2=Schott |first2=J.J . |contribution=Chapter 1, Overview |contribution-url=http://www.iie.com/publications/chapters_preview/332/01iie3349.pdf |title=NAFTA Revisited: Achievements and Challenges |location=Washington, DC |publisher=Institute for International Economics |date=October 2005 |pages=[https://archive.org/details/naftarevisitedac00hufb/page/1 1–78] |isbn=0-88132-334-9 |url=https://archive.org/details/naftarevisitedac00hufb/page/1 }}</ref>

The January 1994 [[Zapatista Army of National Liberation|Chiapas uprising]], and the assassinations of the ruling party's presidential candidate in March 1994, [[Luis Donaldo Colosio]] and the Secretary-General of the party and brother of the Assistant-[[Attorney General (Mexico)|Attorney General]] [[José Francisco Ruiz Massieu]] in 1994, reduced investor confidence. Public debt holders rapidly sold their ''tesobonos'', depleting the Central Bank's reserves,<ref name="Hufbauer"/> while portfolio investments, which had made up 90% of total investment flows, left the country as fast as they had come in.<ref name="Crandall"/>

This unsustainable situation eventually forced the entrant Zedillo administration to adopt a floating exchange rate. The peso sharply devalued, and the country entered into an [[1994 economic crisis in Mexico|economic crisis in December 1994]].<ref name="ReferenceA">{{cite journal|last1=Marois|first1=Thomas|title=Emerging market bank rescues in an era of finance-led neoliberalism: A comparison of Mexico and Turkey|journal=Review of International Political Economy|date=May 2011|volume=18|issue=2|pages=168–96|doi=10.1080/09692290903475474|s2cid=152788534|url=https://eprints.soas.ac.uk/11840/1/Marois%20RIPE%202011.pdf|access-date=August 23, 2019|archive-date=December 15, 2021|archive-url=https://web.archive.org/web/20211215231146/https://eprints.soas.ac.uk/11840/1/Marois%20RIPE%202011.pdf|url-status=live}}</ref> The boom in exports, as well as an [[Mexican Debt Disclosure Act of 1995|international rescue package]] crafted by U.S. president [[Bill Clinton]] (1993-2001), helped cushion the crisis. The economy was growing again in less than 18 months, and annual rate growth averaged 5.1 percent between 1995 and 2000.<ref name="Crandall"/> More critical interpretations argue that the crisis and subsequent public bailout "preserved, renewed, and intensified the structurally unequal social relations of power and class characteristic of finance-led neoliberal capitalism" in forms institutionally specific to Mexican society with GDP growth spurred by one-time privatizations.<ref name="ReferenceA"/> Per capita economic growth in the 2000s was low.<ref name=":2" />

President [[Ernesto Zedillo]] (1994–2000), and President [[Vicente Fox]] (2000–06), of the [[National Action Party (Mexico)]], the first opposition party candidate to win a presidential election since the founding of the precursor of the [[Institutional Revolutionary Party]] in 1929, continued with trade liberalization. During Fox's administrations, several FTAs were signed with Latin American and European countries, Japan and Israel, and both strove to maintain macroeconomic stability. Thus, Mexico became one of the most open countries in the world to trade, and the economic base shifted accordingly. Total trade with the United States and Canada tripled, and total exports and imports almost quadrupled between 1991 and 2003.<ref name="Gereffi">{{Cite book | last1=Gereffi | first1=G | last2=Martínez | first2=M | chapter=Mexico's Economic Transformation under NAFTA | editor-last=Crandall | editor-first=R | editor2-last=Paz | editor2-first=G | editor3-last=Roett | editor3-first=R | title=Mexico's Democracy at Work: Political and Economic Dynamics | publisher=Lynne Reiner Publishers | date=September 30, 2004 | isbn=1-58826-300-2 | chapter-url=https://archive.org/details/mexicosdemocracy0000unse | url-access=registration | url=https://archive.org/details/mexicosdemocracy0000unse }}</ref> The nature of foreign investment also changed with a greater share of foreign direct investment (FDI) over portfolio investment. The wealth of Mexico's leading billionaires stems from the privatizations of the 1990s, when the country sold off its state-owned companies at low prices: telecoms ([[Telmex]]) to [[Carlos Slim]], trains ([[Ferromex]]) to [[Germán Larrea Mota-Velasco|German Larrea]], and television ([[TV Azteca]]) to Ricardo Salinas.