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cost of high social inequality and the widening of the income gap (Benera,
1999).
In March 1990 NAFTA was formed. This was followed by another structural
adjustment programme, along broad neoliberal lines, known as the Salinas
Revolution (Harvey, 2005). President Salinas privatized Mexicos banks, and
employment in the state sector was cut in half (between 1988 and 1994). By the
year 2000, the number of state-owned firms had been reduced to 200, from
1,100 in 1982 (Chong & Lpez-de-Silanes, 2004). Furthermore, Mexico would be
less likely to fall into bankruptcy as employment was no longer dependent upon
the state, arguably a necessary austerity measure (Ros, 1997). The subsequent
lowering of import barriers, and the passing of the permission of foreign
ownership and privatization of ejido indigenous lands by Salinas in 1991, allowed
the United States to drive down prices of corn and other products to export to
Mexico, which meant only the most efficient Mexican farmers could compete
(Harvey, 2005). Essentially, the indigenous farmers that were protected by the
1917 Constitution, enshrining them with legal rights to own and collectively use
land in the ejido system, were close to starvation and forced to join the already
overcrowded cities, which at the time were riddled with unemployment (Ros,
1997). As Harvey (2005) critiques the Salinas revolution, he implies that it may
have been necessary for reform to avoid state-dependency and another crisis ,
but the outcome of rigorous privatization and foreign competition is seen not to
have worked for Mexico socially with the indigenous farmers, and the
consequential urban unemployment.
Mexicos neoliberal reform policy may have been a conditionality of loan
payments received from the Bretton Woods institutions and thus a necessity, but
it failed to work with the lower income population of Mexico, which eventually led
to riots and the uprising of the Zapatista rebellion in Chiapas, 1994 (Watts,
1994). The Zapatista rebellion is a perfect example of how the structural
adjustment program, delving further into neoliberal ideals, didnt work. In terms
of political ideology reflecting the views of its people, Mexico and the PRI
government was very much out of touch, as Bouillon et al (1999) suggests, they
were governing a country against the will of the majority of the population. What
this led to was a host of riots in southern Mexico that were quickly controlled by
state army forces. Although the Zapatista rebellion had no true economic or,
much to its dismay, political effect, it showed the underlying social unrest and
To conclude, it is evident to see that the success and necessity of Mexicos SAP
was completely subjective. In the case of Mexicos relationship with the US,
structural adjustment allowed for stabilized benefactors and debt relievers in the
form of the Bretton Woods institutions (Heredia & Purcell, 1995). The loans
themselves were a necessity for Mexico, as they helped the country re-establish
itself in the global economy; whether the neoliberalisation conditionality that
ensued was a necessity is seen differently. The lowering of state expenditure on
public services had huge social impacts on the Mexican people. A necessity
economically, but whether it worked in anyones favour other than the United
States and Mexicos upper classes is contested. Structural adjustment allowed
Mexico as a country to establish itself in the global economy. It fit into US-based
neoliberal ideals and global trading schemes, creating growth of wealth with
rising billionaires and national GDP levels, but it most certainly carved a larger
crevasse between the rich and the poor. The tickle-down effect is yet to take its
toll to this day in Mexico, as over 50% of Mexicans live below the poverty line
(World Bank, 2011). Structural adjustment led to the amalgamation of foreign
investment and the private sector and worked well in that respect, but
conversely a large part of the Mexican population was and still is marginalised
today, an unnecessary repercussion (Harvey, 2005). Unemployment soared for
the working classes after the SAP, and it arguably alienated the state from its
people, leading to civil unrest (Bouillon, Legovini, & Lustig, 1999). Structural
adjustment was necessary for Mexico to connect with the global economy, this
worked for Mexicos GDP overall. On the contrary, for the Mexican working class,
and the severe income gap that resulted from neoliberal reform, it didnt work
out at all, nor was it necessary.
Bibliography
Adelman, I., & Taylor, E. (1990). Is structural adjustment with a human face
possible: The case of Mexico. The Journal of Development Studies , 387-407.
Bello, W., Cunningham, & Rau. (1994). Dark victory: The United States, structural
adjustment, and global poverty. London: Pluto.
Benera, L. (1999). Structural adjustment policies. The Elgar Companion to
Feminist Economics , 687-695.
Bouillon, C., Legovini, A., & Lustig, N. (1999, April 19). Rising Inequality in
Mexico: Returns to Household Characteristics and the 'Chiapas Effect'. Retrieved
March 7, 2013, from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=182178