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IN THE LATE 1940s, Mexico began to enjoy steady economic growth, which turned into a wild boom after huge oil reserves were discovered in the mid-1970s. As George Philip (item bi 89008929) observes, this in turn not only spawned an affluent urban middle class, but also enabled successive governments to appease the poor with a vast array of subsidies as well as new job opportunities, often in the huge State apparatus and in government-owned corporations.
The stage was set for the current crisis when Mexico announced in Aug. 1982 it could no longer meet payments on its foreign debt. Three months later, Miguel de la Madrid Hurtado took office with the grim prospect of becoming the first modern Mexican president to govern under adverse economic conditions. The dilemmas facing the De la Madrid Administration have been admirably pulled together by Pablo González Casanova and Héctor Aguilar Camín (item bi 90007343).
In endless cycles of negotiations with foreign banks, Mexico struggled to remain a good debtor. Reluctantly at first, then with growing conviction, the government also began opening up the economy, eliminating many subsidies, reducing protection, encouraging foreign investment and promoting privatization of many State companies. However, burdened by huge debt payments and weakened by the steady slide in world oil prices, the economy averaged zero growth during the De la Madrid presidency. With the country's population rising annually by about 2.4 percent, the social cost has been devastating. As Peter Ward notes (item bi 90007472), the government has been unable or unwilling to protect the standard of living of large segments of the population.
Statistics show that Mexicans' purchasing power has fallen by about 40 percent on average since 1982. In human terms, this has meant extreme hardship for the poor majority for whom nutritional standards, housing conditions and other welfare criteria have all sharply deteriorated. Pedro Aspe and Paul Sigmund (item bi 90007469) note that the middle classes have also seen their expectations of greater prosperity dim significantly.
The Mexican economy is currently undergoing unprecedented changes. The ideals and traditions of the Mexican Revolution, which have guided the nation for most of this century, are being quietly cast aside. The long-surviving corporatist structure of the State, held together by the apparatus of the ruling Institutional Revolutionary Party, the PRI, is being overhauled. Economic liberalization is reducing the dominant role of the public sector and lifting the constraints on private sector activity. Sylvia Maxfield and Ricardo Anzaldúa (item bi 90007052) identify a number of critical factors that will either facilitate or hinder the new private sector/government accomodation.
In many ways Mexico is a mysterious, impenetrable, and even unknowable country to its own people as well as to outside observers. When things seem to be going well, these characteristics may serve to heighten expert optimism about Mexico's future. When things seem to be going badly, however, these characteristics make it much easier to turn pessimistic. While many observers are fairly optimistic about Mexico's economic future, Dwight Brothers and Adele Wick (item bi 90006999) concede that the country will have to undertake major reforms before the country can again sustain high rates of stable growth.
Economic uncertainty in particular has bedeviled the analytical and policy debates about what has happened and is happening in Mexico. The analyses of the Mexican economy contained in the works annotated here can be grouped into two broad classes reflecting this state of affairs. The first set of studies traces the historical evolution of the crisis (items bi 90006996 and bi 90013403). Here the main questions addressed are such wide- ranging issues as: 1) What major developments have affected the Mexican growth path? 2) How has the country's development model evolved over time, particularly in the postwar period? 3) Are the country's economic problems largely of external origin, or are they the result of poor economic policies on the part of the government? and 4) Has the government's management of the economy created many of the problems confronting the country today?
The second group of studies (items bi 89013385 and bi 90007691) addresses various aspects of the current crisis: 1) Is the Mexican economic system as a whole headed for chronic instability? 2) Is the economic system still viable? and 3) Is the private sector gaining influence over economic policy?