Political and Economic Change in Mexico Neil Davey

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

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

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

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

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?

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

1876-1911: Porfiriato Era Political 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

1876-1911: Porfiriato Era Economic 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

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

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 Partido revolucionario institucional (PRI) is formed in 1929

1934-1940: The Cardenas Sexenio Political 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

1934-1940: The Cardenas Sexenio Economic Change Sexenio that 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

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

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

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

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

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

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

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

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%) UK Iran Russia China Mexico Nigeria 34.0 38.3 40.1 47.0 48.3 48.8