In , Mexico looked at the beginning of the post-WWII era with a mixture of hope and apprehension. Most importantly, his election had not been opposed by a military uprising, as had happened with all previous presidential elections after , thereby signifying the stabilization of civilian power over the country Krauze, In reality, in spite of the Constitution, a homogenous revolutionary program had never existed and different contending models of economic development cohabited at least until the s.
Torres, Within this context, as was argued by Antonio Manero, a Mexican congressman and an influential economist of the time, the federal government had to intervene by creating the infrastructural and financial conditions for industrial expansion. According to this vision, the central state had to support the economic sectors directly with national relevance or that involved general social interests when the private initiative had insufficient technical or financial capabilities.
In addition, the federal government had to plan, build, or finance public works aimed at fostering production, trade, and wealth mobility. The government directly carried out industrial projects or delegated their development to private enterprises. Nevertheless in most cases, these projects were financed with credit from national lending institutions such as Nacional Financiera S. Indeed, the development model adopted by Mexico after WWII went exactly in the opposite direction of what Niblo contends.
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It is one where the federal government played an increasing role and where protectionist measures were systematically implemented even when these actions implied a clash with the American position or national economic groups Gauss, Second, it is true that foreign investments were well received in Mexico at the end of the s, a policy that Prebisch himself, to be sure, strongly suggested as a part of his general recipe for Latin American economic development Dosman, Nevertheless, the Mexican government maintained tight control over its quantity, destination and employment.
Different government agencies [had] been set up for price control [ This interventionist attitude actually raised objections and opposition among traditional Mexican economic elites. It is widely accepted that during the so-called Mexican Miracle, the fiscal and salary policies of the PRI governments were conservative, while domestic savings were mostly channeled toward infrastructural inversion rather than social programs Hansen, However, it is also equally true that, as argued by Roger Hansen, the dramatic expansion of the new federal bureaucracy and the new jobs generated by the industrialization process, along with the dramatic extension of public education, created a strong mechanism of social mobility that as a result greatly enlarged the Mexican middle class.
This sector about doubled its size between and , moving from 8.
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In , an IBRD study pointed out that:. Indeed, at the end of the s, the industrialization project received firm support from what could be considered as the progressive sectors of Mexican society, from the leftist political establishment and from groups of nationalist industrialists. As IBRD analysts pointed out:. So far, the civilian government enjoys support from, and authority over the army. It devotes a large part of its efforts in developing education, roads, and new lands for cultivation, while encouraging industrial production, partly by official means.
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It stands midway between the industrialists and bankers whose initiative is commended and often supported, and the labor forces which are split among a number of unions. The government plays the role of an umpire, and no grave discontent appears to threaten the balance of power. First, the end of hostilities brought about a quick reconversion of American industry from a military to civilian focus. This process, combined with the inflation that hit the country at the end of WWII, jeopardized the survival of incipient Mexican industries, which in this new context faced serious problems with regard to their competitiveness Torres, Raising new taxes was indeed problematic in a country where the thin middle class was already under severe pressure from inflation as a consequence of the end of WWII.
Mexico also had low levels of domestic savings, and the vast amount of monetary reserves accumulated by the Bank of Mexico during the war had seriously been jeopardized by inflation and the dramatic increase of imports from the United States that followed the end of WWII. The end of hostilities also decreased the value of Latin American, including Mexican, agricultural goods and mineral exports, which had previously been a crucial source of currency to finance imports of industrial capital from abroad.
Finally, the increasing inflation made funding the industrialization by printing new currency problematic Torres, 42, ; Torres Bodet, As Beteta argued, given this general context, the only solution to the problem of funding had to come from external credit. Mexico argued that the end of the war had radically changed the conditions upon which the treaty had been based and that the treaty did not permit the executive branch to stop the incessant stream of goods proceeding from the US. In principle, Washington had shown reluctance to approve the credit since with due consideration of its continental strategy, part of the proposed projects could and should be funded with private capital.
Eventually, during the same period of time, Mexico was also able to convince the administration to review the commercial treaty, which after a first round of modifications favoring the Mexican position, was finally repealed by both countries in July Before its final approval in August , the feasibility of the projects submitted for funding was examined at length by State Department officials, the US Embassy in Mexico, led by Walter Thurston, and Export-Import Bank specialists. US diplomats reported that given the tense situation, there were rumors indicating that the government was considering a political shift to the left.
Torres Bodet pointed out that military cooperation was not a sufficient guarantee for continental security and that only the economic improvement of Latin American nations could generate the structural conditions required to safeguard the security that Washington so highly valued in the new Cold War scenario.
Miseria, hambre, ignorancia y enfermedades. During his intervention, Torres Bodet implicitly criticized the militarist approach that Washington had adopted with regard to inter-American relations, underlining the lack of consideration for the real social problems and their economic roots that affected the continent at the end of WWII. The military cooperation pursued by Washington brought benefits only to the US, while leaving Latin America without any compensation in exchange for its goodwill.
This aggressive strategy obviously entailed risks and challenges for Mexico, which had to carefully calibrate a position that, while putting enough pressure on its powerful neighbor to soften its rigidity, could not overstep the mark.
However, a strategy of opposition and appeasement, if wisely balanced, could also grant important victories to Mexico as, in fact, systematically happened between and Torres Bodet, 5 4. Nonetheless, the risky mix of resilience and appeasement implemented by Torres Bodet also produced extremely positive results for his country. On the other hand, through this strategy Mexico was creating and successfully implementing political leverage that would be used to convince Washington to grant support for requests made after December , thus allowing Mexico to adopt a successful economic development strategy.
Messersmith, former US ambassador in Mexico, after a visit the latter had taken to the country. Since the bilateral talks for the modification of the treaty begun in early did not result in significant advances during the rest of the year, Mexico, citing a dangerous decrease of its foreign exchange reserves, unilaterally raised two protectionist measures, one each in July and November of Torres, The Ambassador also reported that the last example of a Government official expressing such points of view was:.
Mexican delegates insisted on the need to promote state-led development, proposing the creation of an Inter-American Development Bank and the concession of long-term developmental loans accompanied by technical cooperation. Moreover, the Mexican delegation fiercely opposed the idea that private capital could represent an alternative to public investment and restated that the former should always respect the primacy of national laws.
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At this point, Mexican pressure finally reached enough intensity to produce changes in the American administration. Had the Export-Import Bank loan not become embroiled with a harsh dispute over oil exploitation, its concession could have probably been unlocked at the end of The State Department was perfectly aware of the consequences of the decision, which was even more problematic considering that only a few weeks before Brazil had been informed that if it wanted a long-term loan for development purposes, it had to look to the International Bank International Bank of Reconstruction and Development.
In , Mexico had industrial plants. In the number had increased to Use the link below to share a full-text version of this article with your friends and colleagues. Learn more.
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