Mexico 2009: end of the second neoliberal decade lost

Abstract

This article presents the dire economic consequences that Mexico has suffered as a result of the global crisis. The GDP loss of 6.5% places Mexico as the most effected economy in Latin America in these terms, and high on the list of the most effected countries in the world. The economic ties that Mexico has established with the United States, and the trade and financial opening of the 1990s via NAFTA, have created a greater dependency in the country’s productive platform, which has stopped producing final goods for the internal market as export-driven manufacturing has increased its presence. More importantly, conditions have been laid for the full-scale penetration of foreign investment, particularly from the United States. On the other hand, Mexico’s grave results can be explained by the positions of the business elite and the national authorities responsible for economic policy making, which have decided not to pursue active countercyclical policies, in favor of increasing indirect taxation, in an attempt to minimize budget shortfalls. They continue to passively hope that United States consumption recovers in order to, once again, recover activity in the export led sector, which continues to be considered strategic. The Mexican crisis and the inadequate response to it have deepened the already terribly imbalanced distribution of wealth that characterizes the national economy and have thrown many working class and middle class families into the ranks of the poor.