Political and Economic Change in Mexico

1. Political and Economic Change in Mexico Neil Davey

2. Overview • 1519-1821: Spanish Colonialism • 1821: Independence and 1824: 1st Constitution • 1864-1867: Second Mexican Empire - Habsburg Monarchy (France) • 1876-1911: Porfirio Diaz’s Dictatorship • 1910-1920: Mexican Revolution • 1929: Formation of the PRI • 1934-1940: Lazaro Cardenas Presidency • 1983-Present: Neoliberal Reform

3. Pre-Colonial Mexico • 200-900: Classic Era, 900-1520: Post-Classic • Height of Mexican Civilization • Mayas in Yucatan and Aztecs in Tenochtitlan

4. Causes of Colonization • Desire to spread Christianity • To gain personal wealth (gold/silver) • To find new trading routes and partners • Political expansion of the Spanish Empire • Overpowering natives was not too difficult

5. 1519-1821: Spanish Colonialism • Hernan Cortes set sail in 1519 • Captured Tenochtitlan in 1521 • Rule by viceroy under Spain; little autonomy • Conversion to Catholicism • Haciendas given to Spanish colonists • Mestizaje: racial mixing • Strict racial hierarchy and great inequality • Silver mines fueled Spanish economy

6. 1810-1821: Mexican War of Independence • Napoleon invaded Spain • Priest Miguel Hidalgo began independence movement with liberals, peasants, and mestizos • Post-war period marked by instability • Elite conservatives vs. liberals • Monarchy or democracy?

7. Post-war Independence • 36 presidents between 1833 and 1855 • Difficulty obtaining legitimacy • Rise in military control due to instability • Treaty of Guadalupe Hidalgo: US control of ~50% of Mexican lands after Mexican-American war in 1848 • The French invaded in 1864 • Maximilian von Hapsburg was emperor • Liberals removed French by 1867

8. 1876-1911: Porfiriato EraPolitical Change • Porfirio Diaz became dictator in 1876 after staging a coup d’etat and defeating Emperor Maximilian • As President of Mexico, ruled 34 years • Authoritarian rule; cracked down on opposition • Strict control of the army • Instability came to an end temporarily • Increased US dependency

9. 1876-1911: Porfiriato EraEconomic Change • Diaz was a proponent of modernization • Promoted industrialization and foreign investment • Foreign investment in Mexican mining sector • Cientificos: technocratic advisors to Diaz • The poor lived on a very low standard because of huge focus on commerce • Peasants were impoverished • Great inequality resulted • Led to the Mexican Revolution

10. 1910-1920: Mexican Revolution • Elite Mexicans wanted to overthrow Diaz • Francisco Madero called for revolution • Caudillos: Military strongmen • Emiliano Zapata led rebels in the South • Pancho Villa led rebels in the North • Diaz steps down in 1911; Madero is president • Victoriano Huerta overthrows Madero in a plot organized by US ambassador Henry Lane Wilson • Huerta forms a military dictatorship, the US is upset, and bloodshed continues

11. End of the Revolution • Huerta is replaced by Venustiano Carranza in 1914, who rules until 1920 • 1917: Constitution of Mexico established democratic political institutions • Cristeros Rebellion: Conflicts with Catholic Church in the 1920s • Partidorevolucionario institucional (PRI) is formed in 1929

12. 1934-1940: The Cardenas SexenioPolitical Change • Lazaro Cardenas was a PRI president • Sexenio(six year term) with big changes: state corporatism • Presidency became much stronger; primary institution of the government • Patron-clientelism ensued as labor and peasant organizations were sponsored by the gov’t • System of one-party rule by the PRI was accentuated

13. 1934-1940: The Cardenas SexenioEconomic Change • Sexeniothat significantly transformed the Mexican economy: import substitution industrialization • Huge focus on domestic workers • Nationalization of industry (PEMEX) • Investment in public works • Support of the peasantry through redistribution of land from landlords to peasants

14. Import Substitution Industrialization • Replacing foreign imports with increased domestic production • Reduction of foreign dependency by increasing tariffs • Protects national industries • Mexicanization – devotion to Mexico without attempting to appease foreign nations

15. Russia, China, and Mexico • Does the Mexican Revolution sound familiar? • All 3 revolutions characterized by violent and sudden changes • Russia (1917), China (1911), and Mexico (1910) all transformed from authoritarian rule to “one-party” state • Socialist ideals followed revolutions (Communist Party, Cardenas economic policy) • Mexico did liberalize and democratize more

16. Pendulum Theory • Miguel Aleman, president after Cardenas, rejected socialist reforms and encouraged foreign investment • Next president shifted back to Cardenas-style reforms • Modernization vs. dependency • Tecnicos: Educated business leaders who took control of the PRI in 1970s

17. Mexican Miracle and Crisis • Sustained economic growth and minimal inflation during PRI years 1940-1970 • PRI dominated all politics during this time • 1968 Olympics massacre and 1985 Mexico City Earthquake showed PRI weaknesses • 1982 and 1994 economic crises • Partido de la Revolucion Democratica (PRD) was formed in 1989

18. Modern Reforms • Liberalization in economy, free trade, and increased foreign investment • Globalization: Mexico began to integrate into global economy; signed North American Free Trade Agreement (NAFTA) on Jan. 1st, 1994 • Neoliberalism: free markets, privatization, limited government involvement since 1983 • Formation of Federal Electoral Institute (IFE) in 1990 to ensure fair elections • Election of 2000: Won by Vicente Fox (PRD), first non-PRI president in seven decades

19. Political Crisis of 1994 • President Carlos Salinas’ term ends in 1994 • PRI candidate Luis Colosio is assassinated • Ernesto Zedillo is handpicked by Salinas and wins 1994 election • Zapatista Army of National Liberation: revolutionary leftist group based in Chiapas, Mexico’s southernmost state • Zapatistas against neoliberal reforms and economic globalization

20. Economic Crisis of 1994 • Government finances of past two decades, low oil prices, and hyperinflation • Attempt by Zedillo to increase exports • Sudden devaluation of the peso in December 1994 • The Chiapas Rebellion worried investors • Larger risk premium on Mexican assets • Peso crashed as a result of the floating exchange rate

21. Current Statistics • Gini Index (World Bank, 2012): • PPP: $1.748 USD • 11th largest economy in the world (Iran and Nigeria are smaller) • GDP growth: 3.6% and Inflation: 3.9% • GDP by sector: 3.9% Agriculture, 32.6% Industry, 63.5% Services • Primary export partner: US (78%)