Mexico and The World Bank: Rebuilding a Country
explanatory Essay
1778 words
Mexico and The World Bank: Rebuilding a Country
The 1994/1995 financial crisis in Mexico affected me in a very personal way. My family is from Mexico City, and my dad owns a small private firm that specializes in manufacturing tools. After the devaluation, I not only watched my father struggle with the failing economy and lack of business growth opportunities, I also witnessed a country begin to sink deeper into poverty and despair. There are many reasons for the devaluation, but one of the main ones is probably the “poor savings rates and the low rate of investment (only saved 19 percent of GDP from 1980-1994)” (Bloomburg). Low levels of social development and high levels of poverty consistently served as a drag to economic growth and reform measures.
Next fall I am going to spend a quarter in Washington D.C. completing an internship at the World Bank. I am going to work in the Latin American department, so I will have the opportunity to deal very closely with the Bank’s strategies and projects in Mexico. Therefore I have decided to research the relationship between the World Bank and Mexico.
The World Bank is one of the world’s largest sources of development assistance. It is not really a bank, but rather a specialized agency comprised of 184 member countries. Along with several other institutions, the Bank provides low-interest loans, interest-free credit and grants to developing countries. The Bank has provided assistance to Mexico for over 5 decades, and projects loans totaling $5 billion to Mexico up to the year 2005. Mexico holds the second largest share of the Bank’s portfolio, which totals to a whopping 11.1 billion dollars (9.4 % of total portfolio). The Bank works alongside Mexican authorities and officials and both regional and municipal levels to lay out plans and devise strategies that will hopefully help to build up the Mexican economy and social welfare. The Bank currently runs 31 active projects with a net commitment of $5.4 billion.
Today Mexico is defined as a middle-income country, although many of its residents continue to survive off less than 1 or 2 dollars per day. Those who live on less than $1 per day do not have access to sufficient food or clean water. Income per capita is $5070 (the highest in Latin America).
In this essay, the author
- Explains that the 1994/95 financial crisis in mexico affected them personally. their family is from mexico city, and their father owns a small private firm that specializes in manufacturing tools.
- Explains that they are going to spend a quarter in washington d.c. completing an internship at the world bank. they will deal closely with the bank's strategies and projects in mexico.
- Explains that the world bank is a specialized agency comprised of 184 member countries and provides low-interest loans, interest-free credit and grants to developing countries. mexico holds the second largest share of the bank’s portfolio.
- Opines that mexico is a middle-income country, although many of its residents live off less than 1 or 2 dollars per day.
- Opines that mexico must increase its competitiveness in the world market, boost its agricultural productivity, and maintain economic stability to address the poverty issue.
- Explains that the acronym cas stands for the country assistance strategy, which outlines a development agenda consistent with the mexican national agenda for 2001-2006.
- Explains that mexico needs to establish economic stability by creating stricter budgetary rules, reform taxes, and improve the tax administration.
- Opines that mexico needs to improve its infrastructure so that it can subsequently increase agricultural productivity and become more competitive.
- Opines that increased investment is not only needed for businesses, but also for improving physical infrastructure. mexico's road system has greatly deteriorated, and efficient transport is a major problem.
- Explains that the bank's third goal is to ensure that all mexicans have access to basic health care and educational services, and to protect groups left behind in poverty during times of decent growth.
- Explains that the basic education project of 1999-2001 improved the quality of education in rural, poor, and indigenous areas, while the primary education ii project raised the standards of elementary education to at least a national level.
- Explains that the second decentralization project of 1996-2000 focused on providing basic infrastructure to eight of mexico's poorest states by installing clean water, building decent roads, fixing schools, and providing technical assistance to locals.
- Explains that mexico needs to protect its natural resources and manage waste, energy, air quality, and forestry efficiently to sustain future development.
- Explains that mexico city's air pollution was reduced substantially by enforcing standards for vehicle emissions and developing guidelines for improving air quality.
- Explains that the bank developed a project called the rainfed areas development project that enabled farmers to invest in small-scale irrigation and drainage, as well as soil conservation and livestock production.
- Opines that mexico needs to strengthen and improve its government on all levels, including anti-corruption procedures and reforming the legal system.
- Explains that the bank has designed projects to complement these basic goals, such as modernizing crops, strengthening the land title system, and expanding rural finance.
- Explains that mexico's decentralization process is one of the most important improvements in its agenda. policy decisions are now made at the regional level by the states and cities, in conjunction with the federal government.
- Opines that mexico has a long way to go, but with the help and financial support of institutions such as the world bank, it can develop into an independent nation that can avidly compete in world markets.
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