Failures of Development in the One-Party State PDF

Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. CH PT 35...

Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. CH PT 35 FAILURES OF DEV.ELOP ME T 1 IN T.HE. ONE-PARTY S ATE L'U I S ECHEVERR IA, 9 70- 76 Th political atmo ph I when Mexico held its 19 u n I ru n ad :E'& A ONE-PA R TY SYSTli.!M ~ ~ Prodotq Fiellb.. mi:an Oil Zones (fntludingOff-s hoff! DA ILY PETRO!.. lllio 6..0 ,6.0 S:.5 s.s s.o 5.0 4.0 4.0.s 3.S -.3.0 3.0 2.5 2.5 2..0 2..0.5 1.5 ,0 LO.5.5 1976 977 1978 11979 1980 1976 1977 '119 1980 Growth of the , ~ l'etrWftllD lndu Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted.  fuilrn-11.lC of Dewfcpmcttt ln the O Pany sw.. 5 03 Between 1980 and 1982, Presidenis rose Lopez. d Ronald Rugan m on c.onfutllty oflhe yj I IWI found ll dUficu.h lO undocumert1ed worbn and , tunnoil in CmtE!.l Am.eri.ca. tar~st loan that_ a mcy had ever made, to help implement the program. Increased agrirul~ rura1 production_ art onl omised to improve the standarn of living in rural areas but. by dimina:ti then fo h g food impo:m, would great! amcli t Mexico' unfuvor bl balance of trade. The goals were sound but the su.cc-es.s ra e d] ,s hort o spectacular, as the impl en · o of the plan ~ p1agu. d by mismana - t and inefficiency. even! years a er L pez Po Jo left o:ffice. Mexico still import£ _ bout 10 million tom of food annually, and me i in the agriadrural sea.or spWTed increased immigration to the cities. exko's 19 djd reveal on promisin trend. th earl post\ r ye th percenta of illiterates in Mt'Xico constantly declined, bm because of the population explosion, the ahso- number of illilCfates ros Aicr 197 bow,- , M co expmen d not onl a decline in the peramta of illiterates from 8 percent to l?. l pen:£nt by 1980 but also a drop of 1.5 million in the absolute num er: pf illiterates. The afocatioa efforts of all the postwaJ dminimad n had finall mad m h dway. THE ECONOM IC SLIDE H G : S Lopez PoJti.llo led Mexico on an rmp aralle.led spendin,g spree. Government construction. publi works, sod 1 welfa , proje , and ovemm nt sub id of onsum goods all meant an increased government participation m the eco.momy. 'Ihe number -o f stalf!'..-owned mterprls,es qua.drupl.ed dwing the lkh~a and L6pez Portillo administration. Although Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted.  50 4 DEVELOrlldENT A. D lHSSli.. T UN I>E'& A ONE-PARTY SYSTli.!M mrional income was im;ufficimr lO cover ihe c.osrs, Mexico's vast petroleum resl!I'\J't!S made the international banking community willing, indeed eager, to extend l ~ Joans. Under- rand bl. the intm:st rates w appallingly high and r p mi nt uld burd n mbsequent administrations. Mexico's massive deficit spending i-essted on the supp osition that continu- ing ris in the price of oil would allow th ounuy to gen rate n w wea!th and pa its foreign obligations. But contrary to all exp ctations. p noleum prices d'd not rise Beca.us.e of the wodd oil glu.t of th~ early 1980,s, they began to dediae. (n 9 · , during th last y o his adminis0'8!tion, l6pez Poni.11 d hims lf in ~. position even worse than that of Luis Echeverria in 1976. Tue exican rat of inflation gx-:eatly ,exceeded that in. the United ta ,· and the peso was gain rvalucd in relation to th dollar. As Mexican businessm4!n lost c:onfidm« in economy, they began investing abmad and opooiqg new bank acrount:s i:n the United States. To op the mom;'.tfily flight;. in bruary th p esiden ord red th tral.Bank to ,p buying nd Jlng. dollars and to allow the: peso to find its true worth. tthi:n a f. da: it h 4d lost o ne-thl:rd of its forme::r value as i slipped from twenty sll: to thirty-seven peso o the dollar; and by summer of 9 ' had sunk to one hundred peso!, rnru:kin the p 'slow value t:VU, ncomitant price increases and tight currency contro ae:atni near panic in both basiness and govern- ment 1 lt was only 1..b tip o 1 ic berg. [n the last analysis, l6pez Porti!'..lo a plied the: brakes mo late:. after be: bad fun med to squander exico into prosperi. Th e: oil mira.cle: had become. the oil nightma:r and die president m un 'er. frr mish ndling the conomy and demons~ ng a lack of ju~gme:nt and lead~hip. His response was unantidpated as he acruscd the: country's p.rivate banks of looting. ~ d, d di oya]ty for piuticipating in ch frenzi fight of Mexican capital in the amount o.22 billmn. He had found a perfu:tscap. lo ptember 1982, ¥J.thout fim solidl:mg any vice from his cabinet the president amatirally nation ali::re.d &fty-nin of the co , b Th nationalization ,o did no prove b an cronomic elixir. Many of them wae in bad financial shape and assuming their burden \\13:S lib · uttin:g oo the nati.onal conomy. Tb pres." d al action proved onl that dear thinkin ldo. accompanies clmched fut&, As Lopez: Portillo's administration came to an end, Mexicans were incensed to learn that th r idcnt, d pit! hi! piou i ntatio out then. h d taken caJ of hims f. Fail- ing to eep one eye. on hlstmy, he had mmttucted four huge mansions foE himself and his ly on prim land, Toe Lopez Portlllo compound ·was du bed "Dog Hm,. a sarcas ·c n!minder of th pli sident's arli r arks that he would efen.. th pes. like a dog. As be departed Mexico for an t'X1.en ed ration in Europe, he left bmind Mme.o's worst KO- nom! crisis of th tw tieth c nnuy. RECC M MEN'DED F01l FURTHER nuoY Aviiia, Al.&i!lldeL S(1«tcn af Rmolurian.: Peasant Cuermas 111 the Cold War Mmic,m Caun:ll}'side. _ 'ew Yo.Ek: Oxfonll U nivEnity l'res,s 2014. lbiley, John o min M 'ro: Titi mt c u, Cnsu M gem t. w Vorlc: l. M rtin'i I' 1988. Boye:r, Christopher R. PolitimJ Lmdscapes:: filri:m;. Con5e1Wtion, an.d Communil}' in , forlw. Dmbam ,. C: Duke Unive:r5ity l'tt~s, 2015. Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted.  CHA PT 35 FAILURES O ,F' DEVELOP ME T 1 IN THE. ONE-PARTY S ATE Th political aun ph n i , ~ ' ~ I uaj n. rru n ,ld Olympk rro. him tyan s. rel he fail udmg energy;: U nu11u rkell m l li 11 b regional and corpo- iri:Oly add d pl. bllSiness 1.hat p d1 tn '_l ls in first es uranlS and might d nccm pl.mning and I If'\ ay l mt nuol Al Echeverria surprised ·iy of Mexico's stnden n ff1 m th xurn him h rderw a pararnili ent demo tioo on t rad and many oth~ injured. Vlo gilt m r h n 11h fall r UJ to revolutionaries of rhe Movimiento Arrnado Revoluciona ). the:r robbt!ries Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted.  llililuus rJj Ikrdap,romI In :Iii! Parr, r.u.., 497 nd pollti.l dn ppin ollo st.ttj n, r uerr: ro, an Ju lio flirsdificld, director o '· aiiports ranee nh rd. U. ul ,w L r no consul, o Ar.mg jara busi man; and 8cl ' th ' industrial n d a c.rain , r travelet. 1n 1 llm ·oE'& A ONE-PA R TY SYSTli.!M ~ ~ Prodotq Fiellb.. mi:an Oil Zones (fntludingOff-s hoff! DA ILY PETRO!.. lllio 6..0 ,6.0 S:.5 s.s s.o 5.0 4.0 4.0.s 3.S -.3.0 3.0 2.5 2.5 2..0 2..0.5 1.5 ,0 LO.5.5 1976 977 1978 11979 1980 1976 1977 '119 1980 Growth of the , ~ l'etrWftllD lndu Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted.  fuilrn-11.lC of Dewfcpmcttt ln the O Pany sw.. 5 03 Between 1980 and 1982, Presidenis rose Lopez. d Ronald Rugan m on c.onfutllty oflhe yj I IWI found ll dUficu.h lO undocumert1ed worbn and , tunnoil in CmtE!.l Am.eri.ca. tar~st loan that_ a mcy had ever made, to help implement the program. Increased agrirul~ rura1 production_ art onl omised to improve the standarn of living in rural areas but. by dimina:ti then fo h g food impo:m, would great! amcli t Mexico' unfuvor bl balance of trade. The goals were sound but the su.cc-es.s ra e d] ,s hort o spectacular, as the impl en · o of the plan ~ p1agu. d by mismana - t and inefficiency. even! years a er L pez Po Jo left o:ffice. Mexico still import£ _ bout 10 million tom of food annually, and me i in the agriadrural sea.or spWTed increased immigration to the cities. exko's 19 djd reveal on promisin trend. th earl post\ r ye th percenta of illiterates in Mt'Xico constantly declined, bm because of the population explosion, the ahso- number of illilCfates ros Aicr 197 bow,- , M co expmen d not onl a decline in the peramta of illiterates from 8 percent to l?. l pen:£nt by 1980 but also a drop of 1.5 million in the absolute num er: pf illiterates. The afocatioa efforts of all the postwaJ dminimad n had finall mad m h dway. THE ECONOM IC SLIDE H G : S Lopez PoJti.llo led Mexico on an rmp aralle.led spendin,g spree. Government construction. publi works, sod 1 welfa , proje , and ovemm nt sub id of onsum goods all meant an increased government participation m the eco.momy. 'Ihe number -o f stalf!'..-owned mterprls,es qua.drupl.ed dwing the lkh~a and L6pez Portillo administration. Although Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. 504 DE.VELOJ>M E NT ASD DISS ENT UNO!:B. A O.Nf-PARTY SYSTE..M national income was insufficient to cover the com. Mexico's vast petroleum reseives made the international banking community willing, indeed eager, to extend large loans. Under- standably, the inwn:st rates were appallingly high and repayment would burden subsequent adminisuations. Mexico's massive deficit spending ressted on the supposition that continu- ing rises in the price of oil would allow the country to generate new wealth and repay its foreign obligations. But contrary to all expectations, petroleum prices did not rise. Because of the wodd oil ghn of the early 1980s, they began to decline. In 1982, during the la.Sl year of his adminisaation, Lopez Ponillo found himself in a position even worse than that of Luis Echeverria in 1976. The Mexican rate of inflation greatly exceeded that in the United States, and the peso was apin overvalued in relation to the dollar_ As Mexican businessmen lost confidence in the economy, they began investing abroad and o pening new bank accounts in the United States7'I'o stop the monetary flight, in February the president ordered the Central Bank to stop buying and selling dollars and to allow the peso to find its true worth. Within a few dar-,. it tiad lost one-third ofilS former value as it slipped from twenty-six to duny-seven pesos to the dollar,.md by summer of 1982 had sunk to one hundred pesos, marking the pe 's lowest valu.e ever. Concomitant price increases and tight currency controls created near panic in both business and govern- ment drdes. It was only the tip of the iceberg. lo the last analysis, L6pez Ponillo applied tbe brakes too late after he had first med to squander Mexico into prosperity. The oil mitade had become the oil nightln;U'e,'aod the president c:ame under sevm, fire for mishandling the economy and demonStf!lll~g a lack of judgment and leadership. His resl>