Mexico's Development Experience, 1950-85: Lessons and Future Prospects

Abstract

In the late seventies and early eighties the Mexican economy was in a crisis situation. This crisis, however, did not manifest itself until August 1982 when the Mexican government sent shock waves through the international financial community by declaring a temporary moratorium on external debt payments. Six years earlier, during the waning months of the Echeverría administration, a similar financial and economic crisis had taken place amid rumors of an impending military coup. These adverse economic developments - and their challenge to the country's long-term political and social stability - stand in stark contrast to the so-called “miracle years” of the late fifties and sixties. During these years M éxico enjoyed high rates of economic growth coupled with annual rates of inflation (below 5%) which were the envy of the developing world.This paper will argue that, on closer examination, the rapid economic growth of this period was achieved as a result of economic and financial policies which, by exacerbating existing structural weaknesses endemic to the Mexican economy, paved the way for the crises of 1976 and 1982.