Mexican Economy

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On December 20, 1994, in an attempt to make Mexican products more competitive, Mexican President, Ernesto Zedillo Ponce de Len, devalued the Mexican Peso. Unfortunately, attempts at keeping the Peso to only a fifteen percent devaluation failed. The Peso dropped almost forty percent (Roberts, 1). It went from 3.5 to almost 7.5 peso’s to the dollar before it stabilized. The devaluation not only sent shockwaves through the Mexican economy, but through the rest of the world. Why should the world now risk it’s money to save Mexico? Why not just let the Mexican economy and government collapse?

To calm these shock waves United States President Bill Clinton, acting on his executive order, organized an approximately $49.5 billion aid package ($20B U.S., $17.5B International Monetary Fund, $10B BIS, $1B Consortium

of Latin American countries, $1B Canada) to Mexico (Department of State Dispatch, 78). This move could make globalization a friend or a foe in Mexico’s case. Friend, because it opens opportunities for foreign countries

and companies to further expand their economies and influence. Foe, because one country’s economic problems is the world’s economic headache. Unfortunately, it seems that the latter prevails.

The Mexican government is broke, citizens unhappy, rebels are itchy, and opposition leaders are gaining influence. All these are ingredients to a bad situation getting worse--without money or influence, the Mexican government is bound to be overrun.

Mexico over the past few years has gone from a totally corrupt and controlling government to a more democratic, privatized, and deregulated government. This has opened Mexico up to greater economical prosperity. Everything from government ...

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...sociated with the rewards, then one day we will be able to make a perfect globalized economy, and avoid further economic catastrophes. Now that could mean that financial catastrophies may occur on a global scale, as was the case with the Mexican Peso Crisis, but by that token it also means that financial rewards will flourish with greater magnitude.

Works Cited

“U.S. Aid Package to Mexico.” Editorial. U.S. Department of State

Dispatch. 6 Feb 1995: 78 - 79.

Charles Lane. “Who Lost Mexico.” The New Republic. 20 Feb. 1995:

16 - 18.

Tim Zimmerman. “The art of the deal.” U.S. News & World Report.

13 Feb. 1995: 57 - 61.

Gary McWilliams. “A BORDER TOWN FEELS THE PESO'S PINCH.” Business

Week. 6 Mar 1995: America Online.

Paul Craig Roberts. “MEXICO: DON'T BLAME SALINAS FOR ZEDILLO'S

MISTAKES.” Business Week. 4 Mar 1996: America Online.

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