Mexico and NAFTA: Effects on Economic and Political Stability
Philip, George, Harvard International Review
Two thousands eight is the twentieth anniversary of some events that many Mexicans would prefer to forget, though some individual Mexicans who participated in them will probably never be allowed to do so. The presidential elections of 1988 were heavily rigged, and incompetently at that. That official party had stage managed election results for years, but voter discontent in 1988 was so strong that the authorities needed the help of a spurious computer breakdown to produce results that they could live with. Despite the rigging, we have a pretty good idea of what most Mexicans were thinking in that year. They were hugely disaffected with the status quo. Inflation was in three digits and had been in 1987 as well. Economic growth was stagnant. Living standards had fallen significantly over the previous half decade. Mexico had an essentially unpayable national debt. Meanwhile, Mexico's political institutions were authoritarian, torpid, and corrupt. The authorities' failure to respond adequately to the 1985 earthquake in Mexico City was scandalous, and Mexico City's urban problems in any case seemed unmanageable. Mexicanologists north of the border were openly questioning whether Mexico would undergo some kind of political breakdown within a few years. South of the border, the weakened and barely legitimate incoming Mexican government adopted policies of free markets and democratization, with NAFTA membership playing a key part in the planned transformation.
It is hard to recapture that mindset today. Now, Mexico is macroeconomically stable. It is one of the richest Latin American countries in per capita terms, and its exports per head are more than double those of Brazil. Around 25 percent of Mexico's GDP comes from the export of manufactured goods, mostly to die United States, and the Mexican economy is vastly more open than it was a generation ago. Inflation, despite some worrying recent signs, seems securely in single digits. There is a domestic credit market that works. The education system, while not by any means wonderful, works better than it did in 1988. Also significant is the fact that the number of Mexicans with degrees from first world universities is now quite large--well into six figures. Mexican universities are also much better than they were. As a professor, I find that the academic preparation of the Mexican students that I now teach has improved immeasurably since I began my teaching career in the late 1970s. …