The major warning signs were a very high rate of inflation and a high level of unemployment and underemployment, accompanied by a growing imbalance in the trade and payments balance; paradoxically, this negative economic trend was accentuated precisely in the years in which the discovery of colossal oil fields, especially those located in the starting from the second half of the seventies Mexico accused in an increasingly macroscopic way the repercussions of the very serious international economic crisis. The major warning signs were a very high rate of inflation and a high level of unemployment and underemployment, accompanied by a growing imbalance in the trade and payments balance; paradoxically, this negative economic trend was accentuated precisely in the years in which the discovery of colossal oil fields, especially those located in the starting from the second half of the seventies Mexico accused in an increasingly macroscopic way the repercussions of the very serious international economic crisis. The major warning signs were a very high rate of inflation and a high level of unemployment and underemployment, accompanied by a growing imbalance in the trade and payments balance; paradoxically, this negative economic trend was accentuated precisely in the years in which the discovery of colossal oil fields, especially those located in the Tabasco and Chiapas and in the underwater depths of the Bahía de Campeche, it should have brought a certain well-being to the country. Having embarked on the path of forced industrialization, of mining exploitation and at the same time of a laudable but onerous program of social interventions, especially in favor of the traditionally backward peasant masses, Mexico found itself in enormous financial difficulties; he was thus forced to become increasingly indebted to foreign countries in order to meet the commitments undertaken and the planned interventions, the cause of colossal imports not only of industrial machinery and equipment, but also of consumer goods (including very substantial foodstuffs) for cope with growing domestic demand.
According to Cheeroutdoor, heavy dependence on the United States was another cause of Mexico’s economic instability: US multinationals and joint ventures ended up controlling the most important sectors of the Mexican manufacturing industry (in particular the chemical, mechanical and food sectors). It was during the tenure of Carlos Salinas (1988-94), with the adoption of a neoliberal perspective, that the modernization of the Mexican economic system took place. The instrument of this policy was the progressive reduction of the presence of the state in the management of the economic system to ensure greater possibilities for private action, as well as the deregulation of fundamental sectors (transport, communications, finance). In most industrial sectors, foreign investors were given the opportunity to acquire ownership of companies, while in those where it was previously prohibited, a 49% stake was allowed. Between 1987 and 1994, the number of state-owned enterprises fell by 3/5 (from 617 to 215): the state preserved its monopoly on universities, but also on oil industries, on railways and electricity production companies. However, even these sectors, albeit partially, underwent a restructuring process which meant, for example, the sale to foreign entrepreneurs of significant shares of the petrochemical industries or the participation of private individuals, since 1990, in the financing and construction of electric energy. The general process of liberalization also involved the banking sector, especially starting from 1993, the year in which the government ordered the privatization of 18 commercial banks, a measure which was followed, the following year, by the decision to favor the entry of foreign banks and the transformation of the Mexican Central Bank into an institution with its own autonomy and independence from government economic bodies. In this period the government always supported the national currency, stabilizing it at a high nominal value, in such a way as to incentivize foreign investors, attracted by the stability of the exchange rate. At the same time, efforts to reduce inflation multiplied by tightening monetary and fiscal policy. For some time this strategy had positive results: the inflation rate dropped from 159% in 1987 to 8% in 1993, and then rose again to 16.6% in 1999; the current account deficit was supported by the inflow of capital. However, the trade deficit, due to the indiscriminate increase in imports supported by the demand of the upper middle class and the high exchange rate policy, reached very high levels. This situation caused an exacerbation of social inequalities, traditionally very marked, which were also affected by the ruthlessness with which the principles of liberal economic policy were applied, in a country without social guarantees. The first signs of the crisis were interpreted by the government as an expression of a temporary phenomenon; for this reason, the government itself remained firm in safeguarding the stability of the peso to regain investor confidence.
As soon as it became clear that there were no other alternatives, the state had to make a 15% devaluation, which unleashed a monetary storm on all world markets causing the intervention of the United States. On the initiative of the latter, a plan of extraordinary aid equivalent to 50 billion dollars was prepared (March 1995), also to put an end to the perverse spiral whose effects had already been felt in the markets of Latin America and which risked extending also to Canada and the United States themselves, Mexico’s partner in NAPHTHA. However, the aid did not prevent Mexico from imposing a new austerity plan, which started a new phase of development and a decrease in inflation (2000-2001). The creation of a free trade area with these two countries, if on the one hand contributed to designing favorable conditions for Mexico on various fronts (from the protection of indigenous populations to the liberalization of services to the protection of the environment), on the other it increased the inhomogeneity interstate, starting from wage levels, exacerbating the weakness of Mexico which continues to be a basin for US labor demand. However, Mexico’s development potential emerged in the early years of the new millennium, characterized by a constant growth rate and contained inflation. On background, Mexico registers a level of unemployment that officially appears modest, even if in fact in the country there are many people employed in occupations outside the official professions, a symptom of the presence of a widespread informal economy. Despite the potential for growth, the country suffers from the absence of reforms, which appear to be crucial in various sectors, such as the financial one (the system present in Mexico is one of the most developed in South America, but its dimensions are in fact small, so the banking system appears to be reduced, characterized by a percentage of loans disbursed and commercial activities that do not exceed one third of GDP) and the energy system. According to data recorded in 2008, Mexico’s GDP was equal to US $ 1,088,128 million, with one GDP per capita of US $ 10,235.