area handbook series


a country study


a country study

Federal Research Division
Library of Congress
Edited by
Tim L. Merrill and
Ramon Miro
Research Completed
June 1996

On the cover: A giant stone warrior from the Toltec
temple of Tlahuizcalpantecuhtli in Tula

Fourth Edition, First Printing, 1997.

Library of Congress Cataloging-in-Publication Data

Mexico : a country study / Federal Research Division, Library
of Congress ; edited by Tim L. Merrill and Ramon Miro. —
4th ed.

p. cm. — (Area handbook series, ISSN 1057-5294)
(DA Pam ; 550-79)

“Supersedes the 1985 edition of Mexico : a country
study, edited by James D. Rudolph.” — T.p. verso.

“Research completed June 1996.”

Includes bibliographical references (pp. 353-381) and

ISBN 0-8444-0855-7 (hardcover : alk. paper)
1. Mexico. I. Merrill, Tim, 1949- . II. Miro, Ramon,
1968- . III. Library of Congress. Federal Research Divi-
sion. IV. Series. V. Series: DA Pam ; 550-79.
F1208.M5828 1997 97-13481
972— DC21 CIP

Headquarters, Department of the Army
DA Pam 550-79

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402


This volume is one in a continuing series of books prepared
by the Federal Research Division of the Library of Congress
under the Country Studies/Area Handbook Program spon-
sored by the Department of the Army. The last two pages of this
book list the other published studies.

Most books in the series deal with a particular foreign coun-
try, describing and analyzing its political, economic, social, and
national security systems and institutions, and examining the
interrelationships of those systems and the ways they are
shaped by historical and cultural factors. Each study is written
by a multidisciplinary team of social scientists. The authors
seek to provide a basic understanding of the observed society,
striving for a dynamic rather than a static portrayal. Particular
attention is devoted to the people who make up the society,
their origins, dominant beliefs and values, their common inter-
ests and the issues on which they are divided, the nature and
extent of their involvement with national institutions, and their
attitudes toward each other and toward their social system and
political order.

The books represent the analysis of the authors and should
not be construed as an expression of an official United States
government position, policy, or decision. The authors have
sought to adhere to accepted standards of scholarly objectivity.
Corrections, additions, and suggestions for changes from read-
ers will be welcomed for use in future editions.

Louis R. Mortimer

Federal Research Division
Library of Congress
Washington, DC 20540-4840



The authors would like to acknowledge the contributions of
Elizabeth de Lima-Dantas, Robert S. North, Jorge P. Osterling,
Craig H. Robinson, and Phyllis Greene Walker, who wrote the
1985 edition of Mexico: A Country Study. The present volume
incorporates portions of their work.

The authors are grateful to individuals in various govern-
ment agencies and private institutions who gave of their time,
research materials, and expertise in the production of this
book. None of these individuals is, however, in any way respon-
sible for the work of the authors.

The authors also would like to thank those people on the
staff of the Federal Research Division who contributed directly
to the preparation of the manuscript. They include Sandra W.
Meditz, who reviewed drafts, provided valuable advice on all
aspects of production, and conducted liaison with the sponsor-
ing agency; Marilyn L. Majeska, who managed editing and pro-
duction; Andrea T. Merrill, who edited figures and tables; Janie
L. Gilchrist and Izella Watson, who did word processing and
initial typesetting; and Stephen C. Cranton and Janie L. Gil-
christ, who prepared the camera-ready copy. In addition,
thanks go to Christopher R. Conte and Ayo I. Mseka, who
edited chapters; Beverly Wolpert, who performed the final pre-
publication editorial review; and Sandi Schroeder, who com-
piled the index.

Thanks also go to David P. Cabitto of the Federal Research
Division, who provided valuable graphics support and pre-
pared the maps with the assistance of Maryland Mapping and
Graphics. Special thanks go to Wayne Home, who designed the
cover, and to Gustavo Mendoza, who designed the illustrations
for each title page. Finally, the authors acknowledge the gener-
osity of the individuals and the public and private agencies who
allowed their photographs to be used in this study.




Foreword iii

Acknowledgments v

Preface xv

Table A. Chronology of Important Events xvii

Country Profile xxiii

Introduction xxxiii

Chapter 1. Historical Setting 1

Richard Haggerty


Ancient Mexico 5

The Aztec 6



Encomiendas 10

Colonial Administration 11

Socioeconomic Structures 12


The Bourbon Reforms 14

Early Discontent: Criollos and Clergy 14


Hidalgo and Morelos 16

Iturbide and the Plan of Iguala 18


The Abortive Empire, 1821-23 19

The Federalist Republic, 1 824-36 20

Centralism and the Caudillo State, 1836-55 23


The Revolution of Ayutla and the Reform Laws … 27

Civil War and the French Intervention 29


THE PORFIRIATO, 1876-1910 32


Porfirian Modernization 33

Society under the Porfiriato 34

THE REVOLUTION, 1910-20 35

The Early Phase 35

Madero’s Government 38

The Huerta Dictatorship 39

The Constitution of 1917 40

Carranza’s Presidency 41


The Obregon Presidency, 1920-24 42

The Calles Presidency, 1924-28 43

The Maximato 44

Cardenismo and the Revolution Rekindled,

1934-40 46


Avila Camacho’s Wartime Presidency,

1940-46 48

The Aleman Sexenio, 1946-52 50

The Ruiz Cor tines Sexenio, 1952-58 51

Lopez Mateos and the Return to Revolutionary

Policies, 1958-64 52

Authoritarianism Unveiled, 1964—70 54

Reconciliation and Redistribution, 1970-76 55

Recovery and Relapse, 1976-82 57



The de la Madrid Sexenio, 1982-88 60

The United States and the Crisis in Mexico 62

Economic Hardship 65


The Passing of the Torch, 1987-88 66

President Salinas 69

Chapter 2. The Society and Its Environment 77

Dennis M. Hanratty


Topography and Drainage 80

Seismic Activity 86

Climate 87

Environmental Conditions 88






Social Indicators 102

Social Spending 103

Urban Society 107

Rural Society 112

Interpersonal Relations 116

Role of Women 120


Church-State Relations 122

Popular Beliefs 126



Mortality Patterns 133

Morbidity Patterns 137

Social Security 138

Chapter 3. The Economy 141

Timothy Goodman


Early Years 145

Revolution and Aftermath 145

The Great Depression 146

Postwar Economic Growth 147

Deterioration in the 1970s 148

1982 Crisis and Recovery 149


External Debt 158

Inflation 159

Privatization 160


Labor Legislation 163

Labor Unions 164


Banking System 166

Stock Exchange 169

Exch ange Rate 170


Land Tenure 173


Government Agricultural Policy 1 74

Grain Production 180

Fresh Fruits and Vegetables 181

Other Crops 182

Livestock 184

Forestry 185

Fishing 186


Manufacturing 187

Construction 193


Petroleum 194

Electricity 201

Nonfuel Mining 202


Roads 205

Railroads 206

Rapid Transit 209

Ports and Shipping 210

Air Transportation 211

Telecommunications 212

Radio 214

Television 214



Imports 217

Exports 218

Composition of Exports 219

Trade Balance 219

Direction of Trade 220

Trade Agreements 221


Current Account 223

Capital Account 224

Foreign Investment Regulation 226


Chapter 4. Government and Politics 229

Marisabel Bras



Nineteenth-Century Constitutions 233

Constitution of 1917 236


Executive 238

Legislative 241

Judicial 242

State Government 244

Local Government 246


Institutional Revolutionary Party 247

National Action Party 252

Democratic Revolutionary Party 254

Minor Opposition Parties 255


Organized Labor 256

Business Organizations 258

The Church 259

The Media 260



The Electoral Process 263

The 1988 Elections 265

The Salinas Presidency: Reform and Retrench-
ment 266


Relations with the United States 272

Relations with Cuba 274

Relations with Guatemala 274

Relations with Other Latin American

Countries 275

Membership in International Organizations 276


Chapter 5. National Security 279

Jean R. Tartter


The Wars of Independence, 1810-21 284

War with the United States, 1846 285

The Military Phase of the Revolution, 1910-17 …. 287
Professionalization of the Armed Forces,


1920-46 288

The Mexican Military in World War II 289

The Military in Civilian Politics 290


Tasks and Missions 292

United States Concerns 293

Treaty Obligations 295


Constitutional and Legal Basis 296

Organization of National Defense 297

Army 298

Air Force , . . 301

Rural Defense Force 303

Civic Action 304

Secretariat of the Navy 304




Recruitment and Conscription 311

Education and Training 314

Pay and Benefits 317

Uniforms, Ranks, and Insignia 318


The Chiapas Rebellion 323

Police and Law Enforcement Organizations 324

National Intelligence Agencies 329

Human Rights Concerns 329

Criminal Justice System 331

Prison Conditions 332

Narcotics Trafficking 334

Security Concerns for the 1990s and Beyond 337

Appendix. Tables 339

Bibliography 353

Glossary 383

Index 387

Contributors 411


List of Figures

1 Administrative Divisions, 1996 xxxii

2 Mexican Territorial Losses to the United States,

1836-53 28

3 Topography and Drainage 82

4 Population Density by State, 1990 94

5 Population by Age and Gender, 1990 96

6 Population (Five Years of Age and Older) Speaking

Indigenous Languages by State, 1990 100

7 Literacy Level (Fifteen Years of Age and Older)

by State, 1990 132

8 Infant Mortality by State, 1990 136

9 Gross Domestic Product (GDP) by Sector, 1994 … 152

10 Transportation Network, 1996 208

11 Government Structure, 1996 240

12 Commissioned Officer Ranks and Insignia, 1996 … 320

13 Enlisted Personnel Ranks and Insignia, 1996 322



Like its predecessor, this study is an attempt to examine
objectively and concisely the dominant historical, social, eco-
nomic, political, and military aspects of contemporary Mexico.
Sources of information included scholarly books, journals,
monographs, official reports of governments and international
organizations, and numerous periodicals. Chapter bibliogra-
phies appear at the end of the book; brief comments on
sources recommended for further reading appear at the end of
each chapter. To the extent possible, place-names follow the
system adopted by the United States Board on Geographic
Names. Measurements are given in the metric system; a conver-
sion table is provided to assist readers unfamiliar with metric
measurements (see table 1, Appendix A). A glossary is also

Although there are numerous variations, Spanish surnames
for men and unmarried women usually consist of two parts: the
patrilineal name followed by the matrilineal. In the instance of
Luis Echeverria Alvarez, for example, Echeverria is his father’s
name; Alvarez, his mother’s maiden name. In informal use, the
matrilineal name is often dropped. When a woman marries,
she generally drops her matrilineal name and replaces it with
her husband’s patrilineal name preceded by a “de.” Thus, when
Cristina Garcia Rodriguez marries Antonio Perez Cevallos, she
becomes Cristina Garcia de Perez. In informal use, a married
woman’s patrilineal name is dropped (Cristina Perez is the
informal usage). Some individuals use only the patrilineal
name in formal as well as informal use. The patrilineal for men
and unmarried women and the husband’s patrilineal for mar-
ried women are used for indexing and bibliographic purposes.

The body of the text reflects information available as of May
1996. Certain other portions of the text, however, have been
updated. The Introduction discusses significant events that
have occurred since the completion of research; the Country
Profile and Glossary include updated information as available;
several figures and tables are based on information in more
recently published sources; and the Bibliography lists recent
sources thought to be particularly helpful to the reader.


Table A . Chronology of Important Events



ca. 10,000 B.C.

ca. 1500 B.C.

ca. 200 B.C.-A.D. 100
ca. AD. 1-650
ca. AD. 600-900
early 1300s

early sixteenth century

late sixteenth century
seventeenth century

eighteenth century

late eighteenth century








First hunters and gatherers reach area of present-day

Villages appear, and inhabitants produce clay prod-

Monte Alban civilization in southern Mexico.

Teodhuacan civilization in central Mexico.

Classic Mayan civilization in the Yucatan peninsula.

Aztec arrive in the Valley of Mexico.

First Aztec king crowned.

Reign of Moctezuma II (Montezuma).

Hernan Cortes and about 700 men conquer the Aztec

Colonial administration established. European settlers
pour into colony seeking wealth. Native population
decimated by disease and harsh labor practices.

Ranching and industry grow, and mining expands.

Colony stagnates. Society becomes stratified along
racial and social lines.

Reforms by new Bourbon monarchs in Spain revitalize
colony. Immigration increases, and economy and
trade expand.

Pressure for independence builds, especially among

French occupation of Spain throws colonies into polit-
ical turmoil.

Grito de Dolores (Cry of Dolores) — Miguel Hidalgo y
Costilla’s call for independence — on September 16.

Hidalgo executed. Independence movement led by
Jose Maria Morelos y Pavon.

Morelos executed. Independence movement degener-
ates into sporadic guerrilla fighting. Vicente Gue-
rrero most important guerrilla leader.

Colonization grant given to Moses Austin to settle
Texas. Plan of Iguala proclaims Mexican indepen-
dence. Augustm de Iturbide and Spanish envoy
sign Treaty of Cordoba recognizing Mexico’s inde-
pendence; treaty not honored by Spanish govern-
ment, however.

Army of the Three Guarantees occupies Mexico City
under Iturbide’s command. Iturbide becomes
emperor of Mexico as Agustin I. Iturbide deposed,
and republic proclaimed by Antonio Lopez de
Santa Anna Perez de Lebron.

Guadelupe Victoria becomes first Mexican president.

Federal republican government is established under
new constitution. Guerrero becomes president.

Table A. ( Continued) Chronology of Important Events




















Santa Anna repels Spain’s attempt to regain control of
Mexico. Guerrero abolishes slavery as means of dis-
couraging migration of United States southerners
to Texas.

Political disturbances. Rebellion drives Guerrero from
presidency. Immigration to Texas from United
States prohibited but not enforced.

Santa Anna elected president in 1833. Dictatorship
established in 1834. End of first liberal reforms.
Tithes abolished.

Texas pioneers seek independence from Mexico in
1835, achieving it in March 1836. Santa Anna
defeated and forced to recognize independence of
Texas. Spain and Vatican recognize Mexican repub-
lic in 1836.

Anastasio Bustamante becomes president, initiating a
process of centralization.

Conservative rebellion against Bustamante. Santa
Anna’s dictatorship.

Santa Anna retires to his hacienda and leaves govern-
ment to Nicolas Bravo.

Santa Anna chosen as president of Mexico.

Santa Anna forced into exile.

Santa Anna returns to Mexico. Annexation of Texas by
United States.

Mexico severs diplomatic relations with United States.
Beginning of Mexican-American War.

Treaty of Guadalupe Hidalgo ends Mexican-American
War. Texan independence confirmed. United
States annexes territories of Upper California and
New Mexico.

Santa Anna returns to Mexico and becomes president.
Sells additional territory to United States under
Gadsden Purchase.

Triumph of Plan of Ayutla under leadership of Benito

Santa Anna resigns in August. Juarez Law ends fueros
(privileges) enjoyed by military and clergy.

Constitution of 1857 promulgated.

War of the Reform between conservatives/ clericalists
and liberals engulfs country in three years of bitter
struggle. After liberal victory, Juarez promulgates
Reform Laws, establishing nationalization of eccle-
siastical properties without compensation, as well
as suppression of religious orders.

Moratorium on foreign debt payments. Tripartite
agreement for intervention signed by Britain,
France, and Spain.

French forces march on capital but suffer defeat at


Table A. (Continued) Chronology of Important Events



















French enter Puebla, then Mexico City. Juarez forced
to abandon the city.

Ferdinand Maximilian Joseph’s reign as Maximilian I
begins. He confirms Reform Laws, except for those
that refer to indigenous communities.

French troops depart.

Juarez offensive takes place. Maximilian surrenders at
Queretaro and is executed. Juarez moves his gov-
ernment to Mexico City and becomes president.

Death of Juarez. Sebastian Lerdo de Tejada inaugu-
rated president.

Reform Laws incorporated into Mexican constitution
confirming separation of church and state.

Jose de la Cruz Porfirio Diaz leads rebellion on plat-
form of “no reelection” and starts his presidential
career, which lasts for thirty-four years (except
1880-84), of “order and progress.” Finances, trade,
industry, and mining sector modernized. Political
ideology based on positivism.

United States railroad companies receive favorable
concessions; railroad boom.

Presidency of Manuel Gonzalez.

Mining code reformed. Subsoil ownership given to
landowners. Reelecdon of Diaz.

Constitution changed to allow Diaz to succeed him-

Constitution changed to allow for six-year presidential

Proclamation against Diaz issued by the liberals in St.
Louis, Missouri.

Diaz states his intention of not seeking reelection in
interview. Francisco I. Madero publishes The Presi-
dential Succession of 1910.

Mexico’s 100 years of independence celebrated. Sev-
enth reelection of Diaz. Madero’s Plan of San Luis
Potosi. Rebellion breaks out in north and in Pue-

Rebellion spreads throughout Mexico. After attack on
Ciudad Juarez, Diaz resigns. Madero returns in tri-
umph to Mexico City and is elected to presidency.
Emiliano Zapata publishes Plan of Ayala demand-
ing quick reforms.

Pascual Orozco rebels against Madero. Victoriano
Huerta’s troops crush rebellion. Huerta exiled to
France. Zapata and Francisco “Pancho” Villa enter
Mexico City. Venustiano Carranza establishes con-
stitutional government at Veracruz.

Madero overthrown by coup d’etat staged by Felix
Diaz and Huerta. Madero assassinated. Carranza,
Villa, and Alvaro Obregon lead northern rebellion

Table A. (Continued) Chronology of Important Events















while Zapata remains in charge of southern rebel
forces. Huerta deposed and Congress dissolved.

United States troops land at Veracruz. Huerta
defeated and forced into exile.

Obregon turns against Villa. Villa continues to fight
and raids United States border towns for next five
years. Carranza recognized by United States as
chief of government forces.

General John J. “Blackjack” Pershing’s punitive expe-
dition pursues Villa and provokes bitterness
between Mexico and United States.

Constitution of 1917 promulgated. Carranza elected

Obregon rebels. Carranza dies. Obregon elected pres-

United States recognizes Obregon government.

Plutarco Elias Calles elected president.

Anticlerical policies spark Cristero Rebellion.

Constitution of 1917 amended to extend presidential
term to six years.

Calles succeeded by Obregon, who is assassinated
before taking office. Calles, who is to remain politi-
cal strongman through 1935, chooses Emilio Portes
Gil as president.

Cristero Rebellion suppressed. Founding of official
political party — National Revolutionary Party
(Partido Nacional Revolucionario — PNR). Pascual
Ortiz Rubio elected president of country, but
Calles remains as recognized political boss.

Portes Gil succeeded by Ortiz Rubio as president.

Ortiz Rubio resigns; Abelardo Rodriguez chosen to
complete term.

Lazaro Cardenas presidency. Forced exile of Calles
(1936) . Cardenas begins socialist policies. Agrarian
reform establishes ejidos (see Glossary) and collec-
tivization. Official party renamed Party of the Mexi-
can Revolution (Partido de la Revolucion
Mexicana — PRM); includes representatives from
all sectors of society. Nationalization of oil industry
in 1938.

Manuel AvilaCamacho presidency. Mexico joins Allies
in declaring war on Axis powers. PRM reorganized
to provide wider representation and renamed Insti-
tutional Revolutionary Party (Partido Revoluciona-
rio Institucional — PRI). Bracero (migrant Mexican
worker) agreement established between Mexico
and United States.

Miguel Aleman Valdes presidency. Industrialization,
public works, and creation of a new campus for the
National Autonomous University of Mexico (Uni-
versidad Nacional Autonoma de Mexico — UNAM).










bntinued) Chronology of Important Events

Urban growth at expense of agrarian improve-
ments. Per capita agricultural production reaches
prerevolutionary levels. Inter-American Treaty of
Reciprocal Assistance signed in 1947.

Adolfo Ruiz Cortines presidency. Women’s suffrage
extended to national level. Beginning of political
stability through appointment of PRI candidates to

Adolfo Lopez Mateos presidency. Increased foreign
investments in Mexico and control of economy by
foreign (mainly United States) interests. Land
redistribution policies and increased agricultural
production. Greater participation of minority par-
ties in political process.

Gustavo Diaz Ordaz presidency. Termination of bracero
program. Foreign firms operate in Mexico on
grand scale. Student unrest leads to Tlatelolco Mas-
sacre in 1968.

Luis Echeverria Alvarez presidency. Emphasis by Mex-
ico on participation in Third World policies against
imperialism and foreign economic control. Oil
boom in Chiapas and Tabasco. Economic difficul-

Jose Lopez Portillo y Pacheco presidency. Mexico
becomes world’s fourth largest producer of oil and
also one of world’s leading debtor countries. Politi-
cal reform, leading to increase of minority party
representation in Chamber of Deputies by propor-
tional representation system. Foreign debt and
inflation soar. Government corruption rampant.

Miguel de la Madrid Hurtado presidency. Economy
contracts, and standard of living falls. Foreign debt
renegotiated. Government adopts economic aus-
terity measures.

Carlos Salinas de Gortari presidency. Continuation of
austerity policies leads to upturn in economy. Gov-
ernment takes steps to control corrupdon. Free-
trade measures introduced. Mexico joins North
American Free Trade Agreement (NAFTA) . Mea-
sures taken to open governorships to opposition
pardes. Guerrilla group, Zapatista Army of
National Liberation (Ejercito Zapatista de Lib-
eracion Nacional — EZLN) appears in Chiapas. PRI
nominee for next sexenio, Donald Luis Colosio
Murrieta, assassinated.

Ernesto Zedillo Ponce de Leon presidency. Devalua-
tion of new peso leads to investor panic and near-
economic collapse; massive foreign intervention
required to stabilize situation. Military action
against Zapadstas results in stalemate. Former Pres-
ident Salinas leaves country in disgrace amid
charges of corruption and possible involvement in
series of assassinations.




Country Profile


Formal Name: United Mexican States (Estados Unidos

Short Form: Mexico.

Term for Citizen(s): Mexican(s).

Capital: Mexico City (called Mexico or Ciudad de Mexico in

Date of Independence: September 16, 1810 (from Spain).
National Holidays: May 5, commemorating the victory over the


French at the Battle of Puebla; September 16, Independence


Size: 1,972,550 square kilometers — third largest nation in Latin
America (after Brazil and Argentina).

Topography: Various massive mountain ranges including Sierra
Madre Occidental in west, Sierra Madre Oriental in east,
Cordillera Neovolcanica in center, and Sierra Madre del Sur in
south; lowlands largely along coasts and in Yucatan Peninsula.
Interior of country high plateau. Frequent seismic activity.

Drainage: Few navigable rivers. Most rivers short and run from
mountain ranges to coast.

Climate: Great variations owing to considerable north-south
extension and variations in altitude. Most of country has two
seasons: wet (June-September) and dry (October-April).
Generally low rainfall in interior and north. Abundant rainfall
along east coast, in south, and in Yucatan Peninsula.


Population: Estimated population of 94.8 million persons in
mid-1996. Annual rate of growth 1.96 percent.

Language: Spanish official language, spoken by nearly all.
About 8 percent of population speaks an indigenous language;
most of these people speak Spanish as second language.
Knowledge of English increasing rapidly, especially among
business people, the middle class, returned emigrants, and the

Ethnic Groups: Predominantly mestizo society (60 percent); 30
percent indigenous; 9 percent European; 1 percent other.

Education and Literacy: Secretariat of Public Education has
overall responsibility for all levels of education system.
Compulsory education to age sixteen; public education free.
Government distributes free textbooks and workbooks to all
primary schools. Official literacy rate in 1990 was 88 percent.

Health and Welfare: Health care personnel and facilities
generally concentrated in urban areas; care in rural areas
confined to understaffed clinics operated mostly by medical


graduate students. Life expectancy in 1996 estimated at
seventy-three years. Infant mortality twenty-six per 1,000 live
births. Leading causes of death infections, parasitic diseases,
and respiratory and circulatory system failures.

Religion: About 90 percent of population Roman Catholic,
according to 1990 census. Protestants (about 6 percent)
ranked second. Number of Protestants has increased
dramatically since 1960s, especially in southern states.


Overview: From a colonial economy based largely on mining,
especially silver, in the twentieth century, the economy has
diversified to include strong agriculture, petroleum, and
industry sectors. Strong growth from 1940-80 interrupted by
series of economic crises, caused in part by massive
overborrowing. 1980s marked by inflation and lowering
standard of living. Austerity measures and introduction of free-
market policies led to a period of growth from 1990-94.
Membership in North American Free Trade Agreement
(NAFTA) in 1993 led to hopes of continued economic growth.
However, growing trade deficit and overvalued exchange rate
in 1994 financed by sale of short-term bonds and foreign-
exchange reserves. Series of political shocks and devaluation of
new peso in late 1994 caused investor panic. Inflation soared,
and massive foreign intervention was required to stabilize
situation. Although overall economy remains fundamentally
strong, lack of confidence makes short-term prospects for
strong growth unlikely.

Gross Domestic Product (GDP): Estimated at US$370 billion
in 1994; approximately US$4,100 per capita.

Currency and Exchange Rate: Relatively stable throughout
most of twentieth century, the peso (Mex$) began to
depreciate rapidly during economic crisis of 1980s. In January
1993, peso replaced by new peso (NMex$) at rate of NMex$l =
Mex$l,000. Exchange rate in January 1993, US$1 = NMex$3.1;
rate in April 1997, US$1 = NMex$7.9.

Agriculture: Contributed 8.1 percent of GDP in 1994. Main
crops for domestic consumption corn, beans, wheat, and rice.
Leading agricultural exports coffee, cotton, vegetables, fruit,


livestock, and tobacco.

Industry: Mining, manufacturing, and construction
contributed 28 percent of GDP in 1994. Industrialization
increased rapidly after 1940. By 1990 large and diversified
industrial base located largely in industrial triangle of Mexico
City, Monterrey, and Guadalajara. Most industrial goods
produced, including automobiles, consumer goods, steel, and
petrochemicals. World’s sixth largest producer of petroleum
and major producer of nonfuel minerals.

Energy: More than 120 billion kilowatt-hours produced in
1993, about 75 percent from thermal (mostly oil-burning)
plants, 20 percent from hydroelectric, and the rest from
nuclear or geothermal plants. One nuclear plant with two
reactors at Laguna Verde in Veracruz State. Huge petroleum
deposits discovered in Gulf of Mexico in 1970s. In 1995 sixth-
largest producer of oil and had eighth-largest proven reserves.

Exports: US$60.8 billion in 1994. Manufactured exports
include processed food products, textiles, chemicals,
machinery, and steel. Other important export items are metals
and minerals, livestock, fish, and agricultural products. Major
exports to United States are petroleum, automotive engines,
silver, shrimp, coffee, and winter vegetables.

Imports: US$79.4 billion in 1994. Main imports are metal-
working machines, steel-mill products, agricultural machines,
chemicals, and capital goods. Leading imports from United
States include motor vehicle parts, automatic data processing
parts, aircraft repair parts, car parts for assembly, and paper
and paperboard.

Debt: Massive foreign debt. Buoyed by discovery of large
petroleum reserves, government borrowed heavily in 1970s.
When severe recession hit in 1982, government declared
moratorium on debt payments, precipitating international
economic crisis. Austerity measures and renegotiation of the
debt eased crisis, but in 1995 debt stood at US$158.2 billion.

Balance of Payments: Large trade deficits from 1989 to 1993
pushed current account deeply into deficit. Dramatic
improvement in trade balance in 1994 and 1995, however,
nearly eliminated deficit. Heavy international borrowing
allowed international reserves to rise to US$15.7 billion at end
of 1995.

Fiscal Year: Calendar year.


Transportation and Telecommunications

Roads: Extensive system of roads linking all areas. More than
240,000 kilometers of roads, of which 85,000 paved (more than
3,100 kilometers expressway). Heaviest concentration in
central Mexico. Many roads in poor condition as result of lack
of maintenance and heavy truck traffic.

Railroads: More than 20,000 kilometers. Standard gauge,
largely government-owned. System concentrated in north and
central areas. Numerous connections to United States
railroads; system largely used for freight and in need of
modernization. Extensive, heavily used subway system in
Mexico City; smaller subway in Guadalajara.

Ports: No good natural harbors. On east coast, Veracruz is
principal port for cargo; Tampico, Coatzacoalcos, and
Progreso handle petroleum. Guaymas, Mazatlan, and
Manzanillo are principal ports on Pacific.

Air Transport: Adequate system of airlines and airports. More
than 1,500 airstrips in 1994, of which 202 had permanent-
surface runways. Principal international airport in Mexico City;
other international airports in Monterrey, Guadalajara,
Merida, and Cancun. Aeromexico is main domestic airline.

Telecommunications: Highly developed system undergoing
expansion and privatization. Long-distance telephone calls go
via mix of microwave and domestic satellite links with 120
ground stations. International calls via five satellite ground
stations and microwave links to United States. Demand still
exceeds supply for new telephones in homes, but situation
improving. More than 600 mediumwave amplitude modulation
(AM) stations, privately owned. Twenty-two shortwave AM
stations. Almost 300 television stations, most organized into two
national networks.

Government and Politics

Government: Constitution of 1917 in force in 1997. Formally a
federal republic, although federal government dominates
governments of thirty-one states and Federal District. Central
government power concentrated in president, who directs
activities of numerous agencies and state-owned business
enterprises. Bicameral legislature (128-member Senate and


500-member Chamber of Deputies) relatively weak. Federal
judiciary headed by Supreme Court of Justice. State
governments headed by elected governors; all states have
unicameral legislatures; state courts subordinate to federal
courts. Federal District governed by mayor (regente) indirectly
elected by legislative body of the Federal District beginning in
1996; more than 2,000 local governments headed by elected
municipal presidents and municipal councils.

Politics: Authoritarian system governed by president, who
cannot be reelected to another six-year term. Major political
organization Institutional Revolutionary Party (Partido
Revolucionario Institucional — PRI), which incorporates
peasant groups, labor unions, and many middle-class
organizations within its ranks. Many opposition parties have
had limited electoral success; largest is the conservative Party of
National Action (Partido de Accion Nacional — PAN). Direct
elections at regular intervals; rule of no reelection applies to
most offices. Election by majority vote, except for 200 seats in
Chamber of Deputies reserved for opposition parties chosen by
proportional representation. Extensive participation by
interest groups and labor unions in government and PRI

Foreign Relations: Major attention devoted to United States.
Trade and immigration along shared border subjects of
continuing negotiations. Foreign policy traditionally based on
international law; nonintervendon the major principle. Widely
active in hemispheric affairs, including good relations with

International Agreements and Memberships: Party to Inter-
American Treaty of Reciprocal Assistance (Rio Treaty).
Membership in international organizations includes
Organization of American States and its specialized agencies,
United Nations and its specialized agencies, Latin American
Alliance for Economic Development, and Latin American
Economic System. Joined NAFTA in 1993.

National Security

Armed Forces: Total strength in 1996 about 175,000 active-duty
personnel. Army, 130,000; air force, 8,000; and navy (including
naval aviation and marines), 37,000. Approximately 60,000
conscripts, selected by lottery. Reserve force of 300,000.


Women serving in armed forces have same legal rights and
duties as men but in practice not eligible to serve in combat
positions, be admitted to service academies, or be promoted
beyond rank equivalent of major general in United States
armed forces.

Military Units: Two government ministries responsible for
national defense: Secretariat of National Defense and
Secretariat of the Navy. Country divided into nine military
regions with thirty-six military zones. Each military zone usually
assigned at least two infantry battalions composed of some 300
troops each; some zones also assigned cavalry regiments (now
motorized) or one of three artillery battalions. Personnel
assigned to air force also within command structure of
Secretariat of National Defense, distributed among air base
installations throughout country. Principal air base, Military
Air Base Number 1, located at Santa Lucia in state of Mexico.
Personnel under command of Secretariat of the Navy assigned
to one of seventeen naval installations located in each coastal

Equipment: Under modernization program begun in 1970s,
armed forces began to replace aging World War II-vintage
equipment. Attention also given to development of domestic
military industry. Mexican navy benefited significantly in terms
of new vessels — most domestically built. Plans for additional
acquisitions from abroad constrained by country’s economic

Police: Various federal, state, and local police provide internal
security. Senior law enforcement organization is Federal
Judicial Police, controlled by attorney general, with nationwide
jurisdiction. More than 3,000 members in 1996. Each state and
the Federal District has its own force, as do most municipalities.
Low pay and corruption remain serious problems at all levels.
Protection and Transit Directorate — known as “Traffic
Police” — major Mexico City police force; in 1996 employed
some 29,000 personnel.





Note — Coahuila de Zaragoza, Michoacan de Ocampo,
Queretaro de Arteaga, and Veracruz-Llave are
more commonly known by their short forms—
Coahuila, Michoacan, Queretaro, and Veracruz.

Key to state

1. Ag

2. Qu

3. Fw

4. Mo

5. lis


Figure 1. Administrative Divisions, 1996


ico is a nation undergoing rapid change. Past characterizations
of the country as rural, undemocratic, and protectionist have
been replaced in the last decades of the twentieth century by
descriptions that refer to Mexico as urban, opening to democ-
racy, and market-oriented. For a country composed mostly of
peasants before the Revolution (1910-20), Mexico has under-
gone broad and rapid urbanization; Mexico City has emerged
as one of the world’s largest cities at the end of the twentieth
century. Throughout most of its history, Mexico has been ruled
by strongmen or a one-party system; in 1997 pressures for an
open democracy are greater than ever. Under the presidencies
of Carlos Salinas de Gortari (1988-94) and Ernesto Zedillo
Ponce de Leon (1994- ), the economy, long one of the most
protectionist and statist of the nonsocialist countries, dramati-
cally about-faced, embracing open-market policies and free-
trade links with the United States and countries throughout
the Americas.

Mexico’s history is long. Although the timing of the arrival
of the first inhabitants to the Americas has been a point of
major controversy among archaeologists, recent archaeological
findings indicate that tribes from northeast Asia walked across
what is now the Bering Straits perhaps as early as 35,000 years
ago. Finding abundant wildlife these peoples gradually moved
south, populating the entire Americas over the next several
thousand years.

In the area of present-day Mexico, the earliest settlers found
a rugged and varied topography with only limited areas suited
for human habitation. Viewed from space, modern Mexico
roughly resembles a cornucopia, wide at the top but narrowing
and curving to the east as it stretches southward. At the south-
ern tip of the “cornucopia,” the rectangular Yucatan Peninsula,
described by some as a thumb, extends northward into the Car-
ibbean Sea. Another discongruous piece of land, the Baja Cali-
fornia Peninsula, is a long sliver of land offshore and paral-
leling the northwest coast.

The land itself is characterized by a roughly Y-shaped series
of mountain ranges. The two forks of the Yare rugged ranges
that parallel the northern parts of the Pacific and Gulf of Mex-


Figure 1. Administrative Divisions, 1996

ico coasts. The base of the Yis a spine of mountains, with occa-
sional breaks, that extends from central Mexico into
Guatemala on the south. The center of the Yis a knot of active
volcanoes in the center of the country, just south of Mexico
City. Between the two northern ranges lies a high arid plateau,
and the small coastal plains outside these mountain ranges are
tropical rain forests. The Yucatan Peninsula is a flat humid jun-
gle, and the Baja California Peninsula is a desert with yet
another low mountain range running down its center.

Although most of the land has warm temperatures year
round, lack of rainfall and rugged terrain were obstacles for
the early inhabitants. Only the narrow coastal plains, the
Yucatan Peninsula, and a few valleys in the southern area of the
central plateau or in the volcanic central regions receive reli-
able rainfall for crops. Despite these constrictions, evidence
indicates that between 7000 B.C. and 2000 B.C., corn had been
domesticated, and agricultural villages had sprung up. By 1500
B.C., the Olmec, the first of a string of civilizations in Middle
America, flourished.

The next three millennia would see a series of civilizations,
each built on some of the advancements and traditions of its
predecessors. After the Olmec in what is now called the Classic
Period (0-A.D. 700), the Teotihuacan, Veracruz, and Monte
Alban cultures built large ceremonial cities in south-central
and eastern Mexico. From A.D. 700 to A.D. 900 in the Yucatan,
the classic phase of the Maya civilization, considered by most
archaeologists to be the most advanced pre-Columbian civiliza-
tion in the Americas, was at its zenith. After A.D. 900, the cen-
ter of power and culture shifted to the Valley of Mexico, site of
present-day Mexico City, with the development of the Toltec
and finally the Aztec empires.

The destruction of the Aztec Empire by the Spanish conquis-
tadors in 1519 was one of the most decisive events in Mexican
history. Aided by superior firepower and technology, and carry-
ing deadly diseases for which the native inhabitants had no
immunity, a band of several hundred European soldiers of for-
tune overran an empire of millions of inhabitants. In one of
history’s greatest epic stories, one which still reverberates in the
Mexican psyche of today, a great civilization was virtually wiped
out and replaced by an alien culture and political system. The
Aztec capital of Tenochtitlan was leveled, and atop the ruins
the Spanish built Mexico City, capital of half of their vast colo-
nial empire in the New World.


Fueled by its rich silver mines, a new colonial society
emerged stratified by race and wealth. The upper echelon was
European, in the middle were people of mixed European-
indigenous heritage, and at the bottom were the descendants
of the native peoples who had survived the European
onslaught of the 1500s. The Roman Catholic Church was omni-
present in all aspects of society, religion, and education. The
colony was ruled by a viceroy appointed by the king of Spain.

Troubled by turmoil in Europe and influenced by the liberal
ideas of French and American philosophers and the French
and American revolutions, voices in Mexico began agitating for
independence in the late 1700s and early 1800s. The formal
break began with a proclamation by Father Miguel Hidalgo on
September 16, 1810. The struggle for independence was long
and fitful, however, and freedom from Spain was not finally
realized until 1821.

Despite hopes that independence would bring political and
economic change for the nation’s masses, in reality the only
change was in the country’s ruler. For the next several decades,
various strongmen held power. A disastrous war in 1848
resulted in the country ceding more than half its territory to
the United States. A civil war in the late 1850s set the stage for a
brief democratic interlude under President Benito Juarez, a
French occupation and the establishment of an empire under
Maximilian I, and finally the beginning of a dictatorship in
1871 under Porfirio Diaz that would last four decades.

Historians’ view of the Porfiriato, as the dictatorship of Por-
firio Diaz is called, is a schizophrenic one. On the one hand,
the dictator opened the country to development, building a
modern system of railroads, roads, factories, and schools. On
the other hand (and this is the view stressed in Mexico’s version
of its history), the wealth generated by this period of political
stability and increased trade was concentrated in a small upper
class while the condition of the lower classes degenerated.
Indigenous traditions or associations were totally rejected while
European fashion and mores were slavishly imitated.

In 1910 the pent-up resentment of the lower classes coin-
cided with the political disaffection of middle-class intellectu-
als, producing the series of violent political convulsions known
as the Mexican Revolution. Rebel groups sprang up across the
nation, and Diaz resigned. Instead of uniting, however, the
rebel groups soon turned on each other. Various men, sup-
ported by one of the rebel factions or remnants of the former


central government, held the presidency in rapid succession as
fighting swept back and forth over the country. Although they
disagreed over who should run the country, the leaders of the
Revolution were united in their calls for social justice, land
reform, and a new sense of nationalism based on Mexico’s
indigenous heritage. When the fighting finally ended in 1920,
the ideals that they evoked defined the new Mexican nation
that emerged.

The constitution of 1917, still in effect, established the
present-day framework of Mexican politics. A strong president
with a six-year term, a relatively weak legislature dominated by
the party of the Revolution, and a nominally independent judi-
ciary were all established. The Roman Catholic Church was
stripped of most of its properties and formal power. Much of
the land was taken from large landowners and organized into
ejidos (see Glossary,), or communes, for peasants to work.
Heavily influenced by foreign liberal and leftist ideas and born
of a popular revolution against oppression, the constitution
had a decided revolutionary cast. The National Revolutionary
Party (Partido Nacional Revolucionario — PNR) was formed in
1929 to successfully carry out the constitution’s goals (the party
later added the adjective “institutional” to indicate the consoli-
dation of the redistribution phase of the revolutionary pro-
gram — Partido Revolucionario Institucional — PRI).

The extent to which post-revolutionary administrations have
implemented revolutionary ideals has been a benchmark by
which Mexican historians have generally judged these adminis-
trations. Administrations in the 1920s and 1930s adhered to
these goals more faithfully, the most significant act during
these years being the nationalization of the petroleum indus-
try. Post-1940 governments, however, seemed more concerned
with political stability and economic growth than with land
reform or new social programs.

The Revolution also had a profound effect on the role of the
military. Formerly one of the largest and most influential play-
ers in Mexican politics, the armed forces were reduced in size
after 1920 and their role redefined as one of guaranteeing
domestic political stability. Quelling social unrest and eliminat-
ing guerrilla activity became their primary duties. As “servants
of the people,” units were more likely to be involved in devel-
opment-oriented civic action than in training to defend the
country from foreign intervention.


The Revolution added another irritant in the frequently
stormy relations between the governments of Mexico and the
United States. Long at odds over a variety of issues — including
Mexican bitterness over territory lost in the Mexican War of
1848 and political and military interventions by the United
States in Mexican affairs — the United States was alarmed by the
leftist tone of revolutionary rhetoric and Mexico’s friendliness
with socialist governments and revolutionary movements
worldwide. Often fueled by unspoken prejudices and stereo-
types on both sides, friction between the two countries some-
times resulted in chilly relations and bitter denunciations by
politicians. Not until the end of the twentieth century, when
the two countries realized how economically interdependent
they had become, did the rhetoric cool and genuine attempts
at cooperation and understanding each other’s political posi-
tion occur.

Economic growth was probably the most significant legacy of
the PRI in the mid-twentieth century. From 1940 to 1980,
growth was rapid and sustained. The nation’s vast mineral
wealth was exploited. Petroleum reserves, estimated to be
among the largest in the world, were used by the government
to develop new petrochemical industries. Agriculture diversi-
fied and expanded, and government planners gave particular
emphasis to the development of new crops for export. The
industrial sector accounted for an ever larger share of the
economy, and maquiladoras (see Glossary), or assembly plants
along the United States border, grew exponentially. By 1980
Mexico was the world’s fifteenth largest industrial nation.

Although the numbers of Mexicans who could be classified
as middle class rose, the benefits of economic growth were not
shared by all of Mexico’s citizens. The stark inequality that had
characterized Mexico at the turn of the century was not signifi-
cantly ameliorated by the processes of modernization that
began in the 1940s. Despite the economy’s rapid growth rate in
the post-World War II period, an even faster rate of population
growth meant that the economy could not produce sufficient
jobs for the many millions of young people entering the work-
force every year. The exhaustion of the land available for redis-
tribution in the 1950s also created conditions of severe rural
unemployment. Beginning in the 1950s, rural-to-urban migra-
tion began to change the face of Mexico from a predominantly
rural to an urban society. The search for work often resulted in
displaced workers living in worse conditions than before. The


population of Mexico City, for example, swelled to 15 million
in the 1990s, with millions living in miserable slums on hillsides
or on marginal land on the outskirts of the city. Statistics on
standard of living indices showed improvement in some urban
areas and throughout the north, but few improvements in the
south, where Mexico’s population tended to be more rural and
more heavily mestizo or indigenous.

The PRI’s legacy of political stability and economic growth
generated little enthusiasm or gratitude among the Mexican
people. In fact, the opposite occurred, as the rise of an urban
middle class produced pressures for political reform during
the 1980s. Either by legal or fraudulent means, the PRI consis-
tently won every election at the state and national levels, ced-
ing only the occasional municipality to the conservative
National Action Party (Partido de Accion Nacional — PAN) or
to government-financed “satellite” parties. Widespread corrup-
tion only heightened cynicism. Corruption became synony-
mous with all government dealings, from the presidency to
daily life, where most Mexicans had to bribe petty government
officials to obtain basic public services. The PRI, the party of
revolutionary change in the early years of the century, was now
seen as the primary obstacle to reform.

Beginning in the mid-1980s, the PRI’s overwhelming domi-
nance over the political system began to decline. The massive
earthquake that struck Mexico City in 1985 underscored the
corruption and ineptitude of the authorities, who were slow to
provide relief to the hundreds of thousands made homeless by
the natural catastrophe. Spurred by government inaction, hun-
dreds of nongovernmental civic associations arose in the after-
math of the Mexico City earthquake. In addition to providing
resources for community self-help, many of these new organiza-
tions became a nucleus for opposition political activity during
the latter 1980s.

The national elections of 1988 were a turning point in twen-
tieth-century Mexican politics. For the first time in its six
decades of continuous rule, the PRI’s presidential candidate
faced a formidable challenger in the person of Cuauhtemoc
Cardenas, a former PRI leader who had defected from the
party because of its emerging free-market stance and its author-
itarian practices. Ironically, Cardenas was the son of one of the
PRI’s greatest national heros, President Lazaro Cardenas
(1934-40). During the late 1930s and early 1940s, the elder
Cardenas had assured his place in the annals of Mexican his-


tory by reviving the country’s moribund land reform and by
taking the unprecedented step of nationalizing the foreign-
owned oil companies in Mexico.

After an intense campaign that was bitterly fought by both
sides, the PRI’s candidate, Carlos Salinas de Gortari, was
declared the winner. The election results, which were delayed
by a week because of a mysterious breakdown of the electoral
computer system, were immediately contested by Cardenas and
his supporters. The Cardenas camp alleged that the PRI had
caused the computer malfunction and had systematically
destroyed thousands of ballots to produce a last-minute victory
for its candidate. Despite the left’s protests, Salinas was sworn
in as president in December 1988. The ensuing sexenio (as
Mexico’s six-year presidential term is commonly known) would
be characterized by the most dramatic transition in Mexico’s
political economy since the 1910 Revolution.

As he began his presidential term, Salinas appeared to most
Mexicans as an obscure but competent figure chosen from
among several contenders within the cabinet of outgoing Presi-
dent Miguel de la Madrid Hurtado (1982-88). Salinas, how-
ever, faced a storm of opposition protests and bitter divisions
within his own party. Moreover, for the first time in its history,
the PRI held less than a two-thirds majority in the national
Congress, a fact that would necessitate cooperation with the
congressional opposition in order to pass the broad constitu-
tional reforms needed to liberalize the economy.

The newly elected president was hard-pressed in the first
months of his term to show that he could provide the strong
leadership expected of a Mexican head of state. Salinas was
quick to assert his authority, however. Within weeks of taking
office, he ordered the army to arrest the corrupt leader of the
powerful oil-workers union, who had been a vocal opponent of
Salinas’s candidacy. Throughout his term, Salinas repeatedly
used his extensive powers to remove PRI officials, including
several state governors who resisted his reform efforts or whose
fraudulent election victories were too controversial to ignore.

Despite his stated commitment to democratization, Presi-
dent Salinas significantly augmented the already formidable
powers of the executive branch. To push a series of sweeping
economic reforms through the political system, Salinas concen-
trated broad policy-making authority in a technocratic elite
committed to market economics, trade liberalization, and rap-
prochement with the United States. By the early 1990s, the Sali-


nas administration’s priorities had become clear. Political
reform would be encouraged, but primary emphasis would be
placed on the economic aspects of modernization.

Building on the policies of President de la Madrid, the Sali-
nas administration carried out a comprehensive structural
transformation of the Mexican economy. Salinas’s domestic
macroeconomic policies put into practice a package of market-
oriented reforms endorsed by the United States and interna-
tional financial organizations; these reforms collectively
became known as the “Washington consensus.” The three pil-
lars of Mexico’s structural adjustment program were the priva-
tization of the country’s vast network of parastatals, the
liberalization of its foreign trade, and the modernization of its
financial system.

It was through its comprehensive economic program, rather
than its political reforms, that the Salinas administration left a
lasting impact on Mexico. By the time Salinas entered office,
Mexico had already dramatically reversed its foreign trade
practices by acceding to the General Agreement on Tariffs and
Trade (GATT — as of January 1995 became known as the World
Trade Organization) in August 1986. As a result of its accession
to GATT, Mexico unilaterally lowered its average tariff level
from 100 percent ad valorem to a structure with a top rate of 20
percent. At the same time, it reduced or eliminated many non-
tariff barriers such as import licenses and quotas, the com-
bined effect of which had been to close the Mexican market to
most foreign imports for more than fifty years.

The Salinas administration expanded the process of struc-
tural adjustment begun by its predecessor. A key element of the
government’s structural adjustment program was the privatiza-
tion of Mexico’s vast network of parastatal industries. Between
1986 and 1994, the government privatized more than 700 state-
owned companies, including all eighteen government-owned
commercial banks, the national telephone company, a national
television network, airlines, movie theaters, several sugar- and
food-processing plants, several large copper mines, steel pro-
duction facilities, and the maritime port system. The sale of
state-owned companies generated US$22 billion in govern-
ment revenues, the majority of which was used to reduce the
massive foreign debt and to finance new infrastructure and
social expenditures.

In addition to the sale of state companies, the government
also undertook a major overhaul of its Byzantine financial and


regulatory systems. The Salinas administration oversaw the
privatization of the domestic commercial banks and the pas-
sage of a new national Law of Banking and Credit that thor-
oughly modernized domestic banking. Opportunities for
foreign investment, which had been severely restricted since
the Revolution, were expanded considerably under the 1993
Foreign Investment Law. For the first time since the Revolu-
tion, foreigners were allowed to own commercial and residen-
tial property directly, rather than through a Mexican
intermediary. New commercial and securities market regula-
tions encouraged a massive influx of foreign direct and portfo-
lio investment during the early 1990s. The most visible
consequence of increased foreign investment was the explosive
growth of the in-bond (tariff and tax-free) maquiladora manu-
facturing plants along the Mexico-United States border. Addi-
tionally, after 1993 the capitalization of the Mexican stock
market soared, as a new generation of foreign (mainly United
States) investors sought the higher returns afforded by emerg-
ing markets such as Mexico’s.

The dramatic restructuring and austerity measures of the
Salinas years produced a positive turnaround in Mexico’s mac-
roeconomic performance, although they did not produce the
sustained high growth rates which many had hoped for. Annual
inflation fell from 159 percent in 1987 to 6.7 percent during
the first three quarters of 1994. Concurrently, the average
annual economic growth rate between 1988 and 1994 was a
modest 2.6 percent. Unemployment and underemployment
remained high, especially in the countryside, fueling record
levels of legal and illegal migration to the United States. More-
over, the new prosperity was unevenly distributed, being largely
concentrated in the north and among a minority of relatively
well-educated, urban professionals and white-collar workers.

Perhaps the single most important catalyst for the transfor-
mation of Mexican economic policy was the Salinas administra-
tion’s ambitious goal of participating as a full partner in the
emerging North American free-trade zone begun by Canada
and the United States in the early 1990s. President Salinas and
his advisers viewed Mexico’s integration into the world trading
system as the only viable basis for their country’s future long-
term growth. Bowing to geographic reality, Salinas discarded
decades of protectionist and nationalistic practices by past
Mexican governments to forge a close and lasting economic
and political partnership with the United States. The objective


was nothing less than Mexico’s full incorporation into the
emerging North American financial and trading bloc. In 1991
Mexico began negotiations with Canada and the United States
on the terms of a trilateral free-trade treaty, the North Ameri-
can Free Trade Agreement (NAFTA).

NAFTA became the cornerstone of Mexico’s reform efforts
and the ultimate test of its recognition as a new entrant in the
community of modern nations. In preparation for Mexico’s
accession to NAFTA, the Salinas administration redoubled its
efforts to open its markets and to increase the competitiveness
of its domestic economy. Mexico also became more receptive
to United States concerns on a range of bilateral issues, includ-
ing narcotics trafficking and illegal immigration. In response
to international pressure, the Mexican government improved
its human rights practices and made the electoral process more
transparent. In the weeks preceding the vote on ratification of
NAFTA by the United States Congress, Mexico and the United
States negotiated a series of side agreements on environmental
protection that helped assure the entry into force of the treaty
on January 1, 1994.

The ratification of NAFTA boosted international confidence
in the Mexican economy, spurring an influx of foreign capital
and fueling predictions of an imminent economic boom.
National opinion polls showed President Salinas’s popularity to
be at an all-time high, and the PRI was preparing to pass the
mantle of the presidency to Salinas’s handpicked successor,
Luis Donaldo Colosio Murrieta, in the August 1994 presiden-
tial election.

The triumphant mood in Mexico City was dashed on Janu-
ary 1, 1994, the day NAFTA entered into force, when a hereto-
fore unknown insurgent group, the Zapatista Army of National
Liberation (Ejercito Zapatista de Liberacion Nacional —
EZLN), briefly took over four municipalities in the southern
state of Chiapas. The Zapatistas, as members of the EZLN came
to be known, consisted of several hundred indigenous people
from the Chiapas highlands as well as a leadership and support
network of white, university-educated Marxists and former
guerrillas. The Zapatistas justified their armed movement and
their violent takeover of the Chiapas municipalities as gestures
of protest against the market-oriented economic policies of the
Salinas administration, including NAFTA. These policies were
blamed for the worsening living conditions of Mexico’s rural
poor. Additionally, the Zapatistas decried the state’s historical


discrimination and neglect of Mexico’s indigenous communi-
ties and the authoritarian practices of the ruling PRI. The Chi-
apas rebellion galvanized the Mexican left and created a
heightened awareness of the difficult circumstances of many of
Mexico’s indigenous people. It also provoked a strong military
reaction and shattered the image of stability that the Salinas
administration had tried to project to the world.

An even greater setback to Mexico’s stability occurred on
March 22, 1994, when PRI presidential candidate Colosio was
assassinated at a campaign rally in the northern city of Tijuana.
The Colosio murder was the first major instance of political vio-
lence against a high-level PRI official since the assassination of
President Alvaro Obregon in the 1920s. Following initial
reports that a lone gunman was responsible for the killing,
additional evidence pointed to a conspiracy involving at least
half a dozen security personnel believed to be linked to a local
drug cartel.

Colosio was replaced on the PRI presidential ticket by his
campaign manager and former education secretary, Ernesto
Zedillo Ponce de Leon. The PRI once again faced a competi-
tive election, with the main opposition challenge coming this
time from the conservative PAN. Unlike the election of Salinas
in 1988, the 1994 presidential election was judged by domestic
and international observers to be relatively free and fair. Dur-
ing the months preceding the vote, the PRI had agreed to sev-
eral major reforms of the electoral process, including antifraud
measures such as transparent ballot boxes, photo-identification
cards for voters, and the inclusion of a larger number of non-
PRI seats in the National Electoral Commission. Zedillo won
the election with a plurality of the vote, thus extending the
PRI’s dubious record as the world’s longest-ruling political
party (surpassing even the Communist Party of the former
Soviet Union). Although Zedillo was elected to the presidency
by a slimmer margin than Salinas, the results of what was prob-
ably the cleanest presidential election in modern Mexican his-
tory were accepted as legitimate by most observers and
opposition groups.

The salutary effect of the August elections was not destined
to endure, however. In September, another high-level PRI offi-
cial, Jose Francisco Ruiz Massieu, was assassinated on a Mexico
City street. Widespread speculation that an interfactional war
was taking place within the PRI was supported by evidence link-
ing a fugitive PRI congressman to the second killing. The scan-


dal broadened shortly after the Zedillo administration took
office, when evidence was uncovered linking former president
Salinas’s brother, Raul, to the Ruiz Massieu murder.

The first month of the Zedillo administration coincided with
a dramatic financial crisis that dealt a severe setback to
Mexico’s economic recovery efforts. The crisis was rooted in
Mexico’s accumulation of a dangerously high current-account
deficit throughout 1994. To finance increased government
spending, the Mexican government had floated a large num-
ber of short-term, high-yield bonds known as tesebonos. As the
successive political shocks of 1994 drove capital from the Mexi-
can stock and bond markets, and as interest rates rose in the
United States, the Mexican government became increasingly
dependent on short-term, high-yield instruments to attract
scarce capital.

Following the Ruiz Massieu assassination, Mexican investors
withdrew large amounts of capital from the Mexican market.
This situation made it impossible for the government to pay
dividends on a series of tesebonos that were scheduled to mature
in December. Despite its untenable financial situation, the gov-
ernment dismissed the possibility of a devaluation of the new
peso (for value of the new peso — see Glossary), but subse-
quently reversed itself in late December. The devaluation and
the disclosure of Mexico’s short-term liquidity crisis set off a
run on the new peso and caused the Mexican stock market to
lose half its value. The crash of the Mexican stock market rever-
berated throughout Latin America and other developing coun-

The consequences of the currency crisis in Mexico were
severe. Consumer interest rates shot up to an average of 80 per-
cent, making it impossible for many borrowers to pay interest
on their loans or to make credit-card payments. Mexico’s
expanding commercial sector was devastated, as thousands of
businesses were forced into bankruptcy or were required to lay
off much of their workforce. The devaluation of the currency
pushed annual inflation from 6 percent to nearly 50 percent,
imposing a severe burden on consumers and pushing millions
of people below the poverty line.

In January 1995, the United States provided assistance to
Mexico in the form of a US$20 billion emergency debt relief
package. The concession by the United States government of
an emergency loan to Mexico was highly controversial in both
countries. To assuage congressional opposition to the loan


package, the administration of United States President William
J. Clinton took the unprecedented step of requiring the Mexi-
can government to commit its revenues from the national oil
company as collateral.

As Mexico’s economy stabilized in the wake of the financial
crisis, a series of bizarre political events unfolded in the open-
ing months of 1995. In the aftermath of the financial crisis, a
rare public feud developed between former president Salinas
and the Zedillo administration, with each side blaming the
other for mishandling the crisis. Hailed as a modernizer just a
few months before, Salinas had become the main target of pub-
lic blame for the near-collapse of the financial system. Salinas’s
reputation suffered a further blow in connection with his
brother Raul’s reported role in the Jose Francisco Ruiz Massieu
assassination. Shortly after being cleared as a suspect by the
attorney general’s office, Salinas quietly left Mexico for appar-
ent exile in Ireland.

Charges of high-level corruption, bribery, and the role of
drug money in the assassination of government officials contin-
ued to grow. Despite convictions for the 1994 murder of PRI
official Jose Francisco Ruiz Massieu, the motives behind the
killing remained unanswered. Questions about the assassina-
tion increased when, in November 1994, Mario Ruiz Massieu,
Mexico’s assistant attorney general, younger brother of Jose
Francisco Ruiz Massieu and the official in charge of the mur-
der investigation, abruptly resigned, claiming that high-rank-
ing PRI officials were thwarting his investigation efforts. When
the investigation resumed with a new prosecutor in charge,
Raul Salinas de Gotari, brother of the former president, was
arrested and charged with hiring a hit man to murder Jose
Francisco Ruiz Massieu. It was widely assumed that pressure
from high government officials to ignore Salinas’s involvement
was the reason for Mario Ruiz Massieu’s resignation.

On March 2, 1995, Mario Ruiz Massieu was arrested at New-
ark International Airport before boarding a plan for Spain and
charged by United States customs officials with failing to
declare US$46,000. He was placed under house arrest, and pro-
ceedings for deportation began. Investigations of Mario Ruiz
Massieu’s finances revealed a US$9 million bank account in
Houston. United States federal prosecutors charged that the
money had come from Mexican drug traffickers, and a civil
trial to seize the money began in February 1997. Despite claims
from Mario Ruiz Massieu that the money was obtained legally,


documents and witnesses in the civil trial claimed that the
money had come from payoffs from drug traffickers to avoid
prosecution. The case began to be called the “Mexican Water-
gate” as the Mexico City newspapers El Proceso and La Jornada
published documents from the trial that also implicated
former president Salinas and his brother Raul in drug traffick-
ing. Other stories implied that payoffs from drug traffickers
might have played a role in the Jose Francisco Ruiz Massieu
killing and in Mario Ruiz Massieu’s resignation from the inves-

As the Mario Ruiz Massieu investigation and trial continued,
another drug-related scandal broke. On February 18, General
Jesus Gutierrez Rebollo, newly appointed head of the National
Institute to Combat Drugs, was fired and arrested. While
Gutierrez Rebollo aggressively prosecuted several Mexican
drug cartels in his ten weeks in office, he allegedly protected
the Ciudad Juarez drug cartel leader, Amado Carillo Fuentes.
Known as the “lord of the skies,” Carillo Fuentes used a fleet of
Boeing 747s to ferry cocaine from Colombia to Mexico and
then to the United States. The revelations of bribery and
involvement in drug trafficking were particularly embarrassing
to the Mexican military, long considered the one institution in
Mexico largely untouched by corruption. That assumption was
again challenged when, in March 1997, Brigadier General
Alfredo Navarro Lara was arrested and accused of trafficking,
bribery, and criminal conspiracy in a protection scheme involv-
ing a Tijuana-based drug cartel.

In an effort to clean up the scandal-ridden National Institute
to Combat Drugs, Attorney General Jorge Madrazo Cuellar
named Mariano Federico Herran Salvatti as the institute’s new
head. Herran had previously served as the top prosecutor in
Mexico City, and underwent extensive background checks and
drug and lie detector tests before being offered the position.
All employees of the institute were given drug tests, and, in
another embarrassment, the attorney general’s office reported
that 424 tested positive, about half of those for cocaine use. In
his swearing in, Herran reported that his greatest challenge
would be “recovering the confidence lost and damaged by cor-
ruption, impunity, and the irresponsible actions of many bad
public servants over many years.”

The scandals surrounding the Colosio and Ruiz Massieu
assassinations underscored a growing problem of corruption of
Mexican political and law enforcement institutions and coin-


cided with a surge in criminal activity in much of the country.
By the mid-1990s, local drug mafias with connections to
Colombian drug cartels posed a serious challenge to state
authority in several remote areas of Mexico. With their control
over enormous sums of money, manpower, and real estate, the
cartels were able to evade prosecution through a combination
of innovation and outright bribery of local officials and law
enforcement agencies. In some cases, entire local and state law
enforcement agencies had been effectively neutralized
through the payment of bribes and the placement of local drug
cartel informants in police units. These measures allowed the
cartels to establish relatively secure transshipment corridors for
United States-bound drugs. Mexican authorities reported that
drug traffickers had even resorted to buying and retrofitting
old airliners to carry cocaine from South America to the
Mexico-United States border region.

Organized crime not only represented a direct challenge to
the rule of law but also was indirectly responsible for under-
mining democratic institutions. Evidence gathered from the
Colosio and Ruiz Massieu murder investigations suggested that
the drug cartels may have formed alliances with some of the
informal political networks within the PRI. Reports in the Mex-
ican media of corruption by public officials and law enforce-
ment agencies eroded the public’s confidence in Mexico’s
political institutions and created a climate of severe cynicism
and mistrust of all politicians.

The erosion of public confidence in government agencies
was reinforced by the apparent inability of police to stem a
growing tide of criminal behavior in Mexico City and other
large urban areas. By the mid-1990s, the problem of rising
organized and common crime — a problem that Mexico shared
with several other countries undergoing simultaneous demo-
cratic reform and economic austerity — had become a para-
mount public concern.

Responding to domestic and international pressure to fight
crime and reduce official corruption, during the first weeks of
his administration President Zedillo outlined a plan for the
overhaul of the justice system and the professionalization of
police agencies. To demonstrate his resolve to solve the 1994
assassination cases, Zedillo took the unusual step of appointing
as attorney general a well-respected member of the opposition


President Zedillo’s reform efforts were derailed by the finan-
cial crisis and by the continuation of guerrilla activity in Chia-
pas and, subsequently, in the states of Guerrero and Oaxaca. In
April 1995, Zedillo ordered a major military offensive against
the Zapatistas and their urban command structure. The opera-
tion managed to disrupt the Zapatistas’ urban support network,
but failed to capture the guerrillas’ eccentric field commander
and spokesman, Subcommander Marcos.

The government’s war against narcotrafficking, as well as its
counterinsurgency efforts in Chiapas and Guerrero, raised the
military’s profile in Mexico’s civilian-dominated political sys-
tem. The military, whose role since the 1940s has been largely
confined to civic action and disaster-relief activities, despite
some instances of corruption, was increasingly being called
upon to replace unreliable police agencies in the interdiction
of narcotics shipments. The army’s indefinite deployment in
Chiapas and Guerrero, which also represented a significant
expansion of its mission, prompted some observers to warn of
a growing political role for the military in the Mexican political

By early 1997, the Mexican economy had stabilized and the
political system was continuing its gradual transition toward
increased representativeness and responsiveness. Throughout
1996 the opposition PAN won a number of important munici-
pal and gubernatorial elections. The left did not fare as well as
the right, having failed to regain the momentum it had
acquired during the late 1980s. The opposition victories in
1996 set the stage for strong challenges to the PRI in the 1997
midterm congressional elections, the first balloting for the key
post of mayor of Mexico City in the summer of 1997, and the
2000 presidential race.

In the medium term, Mexico faces the continuing challenge
of carrying through its political and economic reforms in the
face of further potential setbacks. A major challenge facing
Mexico is that of restoring healthy economic growth and
improving domestic productivity and national competitiveness
in global markets. Mexico’s participation in NAFTA provides
strong incentives and opportunities to increase the competi-
tiveness of the Mexican economy. One of the key problems will
be to continue opening the economy while minimizing the
potentially destabilizing human costs of economic dislocation,
particularly of rural communities that have been threatened in
the short run by freer trade.


Another key problem facing Mexico into the twenty-first cen-
tury will be that of promoting balanced development among
the country’s diverse regions. Data from the 1990 national cen-
sus show a declining but still significant gap in basic quality-of-
life and educational indicators between the relatively prosper-
ous north and the less developed south and southwest. Once
sustained growth is restored, Mexico will be challenged to over-
come the wide regional disparities that threaten to create, in
effect, two Mexicos.

Finally, Mexico appears to be undergoing a fundamental
transformation of its political culture. The corporatist patterns
of political participation that were promoted by the PRI during
its sixty-year period of undisputed rule are being replaced by
more liberal forms of civic association. Recent electoral
reforms and opposition victories at the state and local levels
suggest that Mexico is in transition from a one-party authoritar-
ian system to a multiparty democracy. During the first half of
his term, President Zedillo took significant steps to weaken the
historically strong link between the PRI and the state. The
reform process is threatened, however, by the growing problem
of crime and the penetration of the state by criminal organiza-
tions. One of the principal political challenges facing President
Zedillo and his successors will be that of fashioning a robust
response to crime that does not resort to authoritarian meth-
ods that could reverse the reform process.

March 24, 1997 Tim Merrill and Ramon Miro


Chapter 1. Historical Setting

The conquest of Tenochtitldn, adapted from two paintings by Diego Rivera

MEXICO’S MANY ARCHAEOLOGICAL treasures, its architec-
tural wealth, and its diverse population provide physical clues
to a past that has given rise to stories of migration, settlement,
conquest, and nation-building. The cultural heritage of the
Aztec, the Maya, and other advanced civilizations, seen in the
ruins of their temples and in their artifacts, bears witness to the
achievements of the early inhabitants of Mesoamerica (see
Glossary). Following a pattern that spans the pre-Columbian
era to modern times, new civilizations have been built on the
ruins of the old. In this ongoing process of cultural superimpo-
sition, many elements of the past have endured, despite occa-
sional efforts to root out traditional practices and native
identities. A major change came with the Spanish conquest.
The conquest caused a traumatic break in the ebb and flow of
native kingdoms and led to a single, albeit stratified, society
that was neither wholly native nor European, but mestizo.

The conquistadors unified the populations of the former
Mesoamerican kingdoms under the rule of a militaristic and
theocratic Spanish monarchy. After early attempts by the con-
querors and their descendants to establish a decentralized feu-
dal society, central aristocratic authority prevailed. Throughout
the colonial period, a distinctly “Mexican” national identity was
emerging among the mestizo and Creole inhabitants of New
Spain. By the early nineteenth century, Spain’s mercantilist
trade policies and its discrimination against native-born Mexi-
cans in colonial business and administrative affairs fostered
widespread resentment and a desire for greater autonomy. The
geopolitical crisis of the Napoleonic wars and the influence of
Enlightenment ideas provoked a sudden break with Madrid in

In the aftermath of independence, Mexico suffered a pro-
longed tumultuous period of factionalism and foreign inter-
vention. Riven by bitter disputes between conservatives and
liberals and governed by a series of military strongmen, the
country languished in political turmoil while it lost half of its
territory to an expanding United States. Stability, when it was
finally achieved at the close of the nineteenth century, was
imposed by the modernizing but politically repressive regime
of Jose de la Cruz Porfirio Diaz.


Mexico: A Country Study

Throughout most of the nineteenth century, Mexico’s popu-
lation was denied opportunities for individual prosperity and
fair and equal treatment before the law. In a country that
remained predominantly rural until the 1950s, landlessness
and rural unemployment had become endemic. The suppres-
sion of civil liberties and the excessive concentration of wealth
during the Porfiriato (the name given to the years of the Por-
firio Diaz dictatorship, 1876-1910) polarized Mexican society
and eventually led to the bitter and destructive factional wars
collectively known as the Mexican Revolution. After nearly a
decade of devastating warfare, the combatants came together
in the town of Queretaro in 1917 to draft a grand compromise
that would incorporate the ideals of the diverse revolutionary

The constitution of 1917 gave Mexicans the legal and ideo-
logical framework on which to base national development:
equality before the law, national self-determination, and a state-
mediated balance between private property rights and social
welfare objectives. In the decades that followed, different Mexi-
can administrations would alternatively promote redistribution
or economic growth, depending on a variety of circumstances.

By the late twentieth century, the burgeoning Mexican state
could no longer assure the Revolution’s promise of growth with
equity. After decades of semiauthoritarian rule by the domi-
nant Institutional Revolutionary Party (Parti do Revolucionario
Institucional — PRI), corruption and excessive clientelism had
overshadowed the ideal of equality before the law. Poverty,
although lessened, continued to beset half of the population.
The debt crisis of the early 1980s marked the end of Mexico’s
protectionist, state-centered economic model and set the stage
for far-reaching trade and financial liberalization and system-
atic privatization of key industries. By the early 1990s, Mexico’s
economy was thoroughly integrated into the global market,
and a renascent civil society was exercising increasing auton-
omy from Mexico’s corporatist political institutions. Mexico
thus approached the end of the twentieth century in a state of
profound transition (see fig. 1).

Preconquest Mexico

Despite Mexico’s rich pre-Columbian history, following the
Spanish conquest in 1519, the country’s new rulers made a
concerted attempt to erase all things related to indigenous cul-
tures. Conquerors and missionaries felt divinely inspired to


Historical Setting

“civilize and evangelize” the native peoples of the New World.
The attempts to Europeanize and Christianize Mexico led to
the devaluation of much of the indigenous culture for the next
400 years.

This situation was finally reversed in the 1920s during what
has become known as the cultural phase of the Revolution,
when a conscious effort was undertaken to search for a
national cultural identity known as mexicanidad (“Mexican-
ness”). The search for this new national consciousness resulted
in a renewed appreciation of the advanced civilizations
encountered by the Spanish in 1519. Since the 1920s, extensive
scholarship has been devoted to native Mexican values and the
cultural expressions of those indigenous values in contempo-
rary society.

Ancient Mexico

The first humans in the Americas were descendants of
northeast Asian nomads who took part in a series of migrations
across the Bering Strait perhaps as early as 30,000 B.C. Archae-
ological evidence testifies to the presence of early hunters and
gatherers in Mexico around 10,000 to 8000 B.C. During the
next few thousand years, humans domesticated indigenous
plants, such as corn, squash, and beans. With a constant food
supply assured, people became permanent settlers. Leisure
time became available and was used for developing technical
and cultural skills. Villages appeared as the number of people
and food supplies increased. By 1500 B.C., the early inhabitants
were producing handmade clay figurines and sophisticated

Between 200 B.C. and A.D. 900, Mesoamerica was the scene
of highly developed civilizations. Archaeologists have desig-
nated this Classic Period as the Golden Age of Mexico. This era
was a time when the arts and sciences reached their apex, when
a writing system developed, and when a sophisticated mathe-
matical system permitted the accurate recording of time. Reli-
gion was polytheistic, revering the forces of nature in the gods
of rain, water, the sun, and the moon. The most important
deity was Quetzalcoatl, the feathered serpent and the essence
of life, from whom all knowledge derived. Metals came into use
only by the end of the period, but despite this handicap,
impressive architectural structures in the pyramids at Teotihua-
can near Mexico City, the Pyramid of the Niches at El Tajin in


Mexico: A Country Study

the state of Veracruz, and the Temple of the Sun at Palenque in
present-day Chiapas were built and survive to this day.

These civilizations produced pottery, statuary, and ornate
buildings, despite their being supported by a simple agricul-
tural economy based on the cultivation of a few staples. Social
stratification produced a ruling class of priests and intellectuals
who oversaw the labor and social affairs of the peasant majority.

The three most important Classic sites were Teotihuacan (in
central Mexico), Monte Alban (to the south in the state of
Oaxaca), and the Mayan complexes (in the states of Chiapas,
Tabasco, Campeche, Yucatan, and Quintana Roo, as well as in
the nearby countries of Honduras, Guatemala, and Belize).
The fall of Teotihuacan around A.D. 650 effectively transferred
the center of power from central Mexico to the Mayan city
states of the Yucatan Peninsula. The lowland Mayan culture
flourished from A.D. 600 to A.D. 900 when it abruptly
declined. The exact causes of this rapid fall remain unknown,
but archaeologists speculate that it might have been because of
one or a combination of factors: bad harvests, plague, drought,
ecological problems from overpopulation, or pressure from
more warlike neighbors. Whatever the factors may have been,
they provided the groundwork for the next phase, the Post-
Classic period, which would be a radical change from the Clas-

The main characteristic of the Post-Classic period was a sud-
den surge of militarism. The population underwent great tur-
moil and numerous migrations; people moved everywhere and
anywhere they could find allies to fight their common enemies.
Wars ceased to be waged for territorial expansion and became
a means for exacting tribute and for capturing prisoners to be
sacrificed to the gods. For the first time, architecture centered
on defense and fortification. Numerous civilizations rose and
fell during this period, including the Toltec in central Mexico
and the Zapotec and Mixtec in southern Mexico.

The Aztec

Throughout its long history of human habitation, the Valley
of Mexico drew people from Mesoamerica who were attracted
by its abundant sources of water, easy communication, and
plentiful game and vegetation. The valley was a corridor
through which many migrating groups passed and sometimes
settled. During the pre-Columbian era, the valley was in con-


Pyramids at Teotihuacdn
Ceremonial temple at Palenque
Courtesy Arturo Salinas


Mexico: A Country Study

stant turmoil except when central authority and political hege-
mony existed.

The last nomadic arrivals in the valley were the Mexica,
more commonly known as the Aztec. Although recent linguis-
tic and archaeological work suggests the Aztec may have come
from northwest Mexico, their origins are obscure. According to
legend, the Aztec came from Aztlan, a mythical place to the
north of the Valley of Mexico around A.D. 1100. They were said
to have made their way to the valley guided by the chirps of
their sun and war god Huitzilopichtli (meaning “hummingbird
on the left”). The inhabitants of the valley viewed the new arriv-
als with suspicion and tried to prevent their settlement. After
much wandering and a few wars, in the early 1300s, the Aztec
reached the marshy islands in Lago de Texcoco (site of
present-day Mexico City), wiiere they saw an eagle perching on
a cactus tree and holding a snake in its beak (an image repro-
duced on the modern Mexican flag). According to Aztec leg-
end, this was a sign indicating where they should build their
new capital city. Tenochtitlan was eventually built on an island
in Lago de Texcoco and gradually became an important center
in the area. Drinking water came from Chapultepec hill on the
mainland, and causeways connected the island to the shores of
the lake. The Aztec established a monarchy in 1376, naming
Acamapichtli as their first king. By the early sixteenth century,
Aztec domination reached into most of central and southern
Mexico (with the exception of the Mayan areas in the south-
east) .

Before the settlement at Tenochtitlan, Aztec society was
quite simple in its organization and was composed of peasants,
warriors, and priest-rulers. Afterward, and with a much larger
population, there was an increasing division of labor and a
more complex social structure. The emperor was selected
according to merit from among the ruling dynasty. The nobil-
ity was composed of the high priests, the military, and political
leaders. The merchant class lived apart in the city and had its
own courts, guilds, and gods. Commoners, the largest segment
of society, were farmers, artisans, and lower-level civil servants.
The lowest rung of society was composed of conquered peoples
brought to Tenochtitlan as slaves.

The political structure of the Aztec empire was based on a
loose coalition of city-states under the fiscal control of Tenoch-
titlan. The main objective of Aztec expansion was to exact trib-
ute from conquered peoples. Tributes were in kind: cocoa,


Historical Setting

cotton, corn, feathers, precious metals and stones, shells, and
jaguar skins were among those sent. The towns also had the
obligation to provide soldiers and slaves and to recognize Aztec
supremacy and the supremacy of the Aztec god Huitzilopichtli.
Otherwise, towns were basically free to conduct their internal
affairs, and Aztec hegemony was never fully consolidated — a
fact that eventually became a major element in the fall of the

The Spanish Conquest

Lured by stories of the riches of the Aztec, a Spanish adven-
turer, Hernan (sometimes referred to as Fernando or Her-
nando) Cortes, assembled a fleet of eleven ships, ammunition,
and over 700 men and in 1519 set sail from Cuba to Mexico.
The party landed near present-day Veracruz in eastern Mexico
and started its march inland. Superior firepower, resentment
against the Aztec by conquered tribes in eastern Mexico, and
considerable luck all aided the Spanish in their conquest of the
Aztec. The Aztec and their allies had never seen horses or guns,
the Spanish had interpreters who could speak Spanish, Maya,
and Nahuatl (the Aztec language), and perhaps what was most
important, Cortes unwittingly had the advantage of the legend
of Quetzalcoatl, in which the Aztec are said to have believed
that a white god would arrive in ships from the east in 1519 and
destroy the native civilizations.

Unwilling to confront the mysterious arrival whom he con-
sidered a god, the Aztec emperor, Moctezuma II (anglicized as
Montezuma), initially welcomed the Spanish party to the capi-
tal in November 1519. Montezuma soon was arrested, and the
Spanish took control of Tenochtitlan. The Aztec chieftains
staged a revolt, however, and the Spanish were forced to retreat
to the east. The Spanish recruited new troops while a smallpox
epidemic raged through Tenochtitlan, killing much of the pop-
ulation, possibly including Montezuma. By the summer of
1521, the Spanish were ready to assault the city. The battle
raged for three weeks, with the superior firepower of the Span-
ish eventually proving decisive. The last emperor, Cuauhtemoc,
was captured and killed. In the nineteenth century, the legend
of Cuauhtemoc would be revived, and the last Aztec emperor
would be considered a symbol of honor and courage, the first
Mexican national hero.


Mexico: A Country Study

New Spain

After the fall of Tenochtitlan, the Spaniards’ task was to settle
and expand the new domains on the mainland of North and
Central America that became known as New Spain. Cortes dis-
patched several expeditions to survey the areas beyond the Val-
ley of Mexico and to establish political control over the land
and its inhabitants. Once released from the central political
control of Tenochtitlan, most towns surrendered to Cortes’s
men. As a symbol of political continuity, the capital of the new
colony was to be built squarely atop the ruins of Tenochtitlan
and was renamed Mexico after the Mexica tribe.


The conquest of the Aztec empire required an enormous
effort and a tremendous sacrifice by Cortes’s army, and after
their victory, the soldiers demanded what they had come for:
prestige and wealth. The spoils from the city largely had been
lost; Cortes had to resort to some other strategy to provide for
his men. The conquistador had already surveyed all Aztec
records related to tributes and tributary towns, and on the basis
of this information, he decided to distribute grants of people
and land among his men. This practice had already been tried
in the Caribbean, and Cortes himself had received encomiendas,
grants of land and people, in Hispaniola in 1509 and in Cuba
in 1511. Granting encomiendas became an institution through-
out New Spain to ensure subordination of the conquered pop-
ulations and the use of their labor by the Spanish colonizers, as
well as a means to reward Spanish subjects for services ren-
dered to the crown.

The encomienda was a Spanish institution of Roman origin,
and in the New World, the Spanish government established a
series of rights and obligations between the encomendero
(grantee) and the people under his care. The indigenous peo-
ple were required to provide tribute and free labor to the
encomendero, who was responsible for their welfare, their assimi-
lation into Spanish culture, and their Christianization. Political
and social stratification among the encomenderos was easily
achieved by the simple fact that there were communities of dif-
ferent sizes. The larger the grant, the larger the amount of trib-
ute and labor available, and thus the greater the potential
wealth and prestige of the assignment. In reality, the native
population was accustomed to a similar organization of tribu-


Historical Setting

tary towns under the Aztec. In time, the encomenderos became
the New World version of Spanish feudal lords. This new
source of political power came to worry the Spanish authorities
because of the dangers of a local nobility capable of contend-
ing peninsular authority.

Although disease and hardship decimated the indigenous
population, increasing numbers of Spaniards arrived with great
expectations of new wealth. Along with this flow of Europeans
came the African slaves, who were directed to the central areas
of New Spain. In 1549 the Spanish government ended yearlong
labor obligations, as well as payment of tribute. To compensate
for this loss, the crown instituted a new system of forced labor
allotments (repartimientos) of forty-five days a year, for which
every person was to be paid in wages. The repartimiento became
a source of abuse by employers who would pay wages in
advance and then obligate workers indefinitely as repayment.

In the late seventeenth and early eighteenth centuries, royal
control of the granting of encomiendas became more strict. On
November 13, 1717, a royal decree abolished encomiendas, an
act that was confirmed by other decrees in 1720 and 1721.
However, in the most remote areas, encomiendas were often kept
throughout the colonial period in complete defiance of the
royal decree in order to populate these regions.

Colonial Administration

The first royal judicial body established in New Spain in 1527
was the audiencia of Mexico City. The audiencia consisted of
four judges, who also held executive and legislative powers.
The crown, however, was aware of the need to create a post that
would carry the weight of royal authority beyond local alle-
giances. In 1535 control of the bureaucracy was handed over to
Antonio de Mendoza, who was named the first viceroy of New
Spain (1535-50). His duties were extensive but excluded judi-
cial matters entrusted to the audiencia.

Viceregal power was characterized by a certain amount of
independence from royal control, mainly because of distance
and difficult communications with the mother country. Vice-
roys were notorious for applying orders with discretion, using
the maxim “I obey but do not comply.” In addition, viceroys
and audiencias were in conflict most of the time, with the latter
not responsible to the viceroy but reporting directly to the


Mexico: A Country Study

By the end of the seventeenth century, the Viceroyalty of
New Spain reached from New Mexico to Panama and included
the Caribbean islands and the Philippines. In the most distant
areas, local audiencias enjoyed greater autonomy, and viceregal
authority was merely nominal. After the sixteenth-century
expansion of power, the seventeenth century was marked by a
decline in central authority, even though the administrative
structure transplanted to the New World remained intact.

Socioeconomic Structures

The philosophy of mercantilism was the force behind all
overseas ventures by European colonial powers. This set of
ideas emphasized that the most important function of colonial
possessions was to enrich the mother country. This accumula-
tion of wealth was largely accomplished by the levy of the quinto
(royal fifth) on all colonial production. Trade duties protected
manufacturers and merchants in Spain from competition in
the colonies and placed strict restrictions on the colonial econ-
omies. Mexico was required to supply raw materials to Spain,
which would then produce finished goods to be sold at a profit
to the colonies.

From the mid-sixteenth century on, some land grants were
provided to Europeans willing to farm the land and raise live-
stock in underpopulated areas. The European acquisition of
land often encroached upon native villages. Displacement and
fear of forced labor in the early seventeenth century led entire
villages to flee to larger towns, mining camps, or haciendas,
where the displaced persons hired themselves out as artisans,
servants, peons, or laborers. Although originally kept apart in
separate “republics,” close contact of all sorts with the Span-
iards was responsible for the indigenous peoples’ accultura-
tion. The mestizos, who would later play the dominant role in
Mexican society and history, could trace their origins to this
period of intense assimilation of the two cultures (see Ethnicity
and Language, ch. 2).

Agricultural production was directed to internal markets,
while exports consisted mainly of precious metals and animal
hides. During the initial phase of the colonial period, gold had
been collected from the Aztec treasures and from some mining
operations. However, silver soon became the dominant colo-
nial product, followed by the red dye cochineal, and by the late
sixteenth century, silver accounted for 80 percent of all exports
from New Spain. Exploration and the search for mines led the


Historical Setting

Spaniards to the north, far beyond the Aztec empire. The rich
mines of Zacatecas, Real del Monte, Pachuca, and Guanajuato
in north-central Mexico were discovered between 1546 and
1552. Silver production continued into the seventeenth cen-
tury, and it employed most available labor.

During the sixteenth century, a dual economy developed in
New Spain: the hacienda economy in the Valley of Mexico and
the south and the frontier economy of the silver mines to the
north. By the mid-seventeenth century, however, silver produc-
tion collapsed when mercury, necessary to the refining process,
was diverted to the silver mines of Potosi (in present-day
Bolivia). The seventeenth-century mining crisis led to wide-
spread bankruptcy among miners and hacendados (hacienda
owners) and also had a negative effect on transatlantic trade.
However, the financial crisis did promote the production of
crude manufactures and food for domestic consumption by
the growing population of New Spain.

Colonial society was stratified by race and wealth although
these were not hard and fast distinctions. The three main
groups were whites (European- and American-born), castas
(mestizos), and native peoples; each had specific rights or priv-
ileges (fueros) and obligations in colonial society. The major
fuero was the right of an individual to be tried by his or her
peers. The church, the military, the bureaucracy, and the mer-
chants enjoyed their set of fueros. Membership in the upper
classes was open to whites only, particularly peninsulares, whites
who were born in Spain and moved to the colonies. Criollos
(American-born whites, also known as Creoles) tended to
marry peninsulares for reasons of upward social mobility. Never-
theless, many examples exist of race changes after birth.

The lower classes were a mixture of poor whites, castas, and
native peoples who worked in the same occupations as whites
or castas but who had different rights and obligations. Indige-
nous groups were protected from the Inquisition (the Roman
Catholic court designed to combat heresy), paid head taxes,
and could not own property as individuals but were the pri-
mary beneficiaries of social services in health and education.
Mestizos were under the same obligations as whites but were
not considered for most of the jobs in the Spanish administra-
tion. These jobs were held only by peninsulares. Poor whites and
mestizos often competed with native people for the same jobs.
The only unifying force in a society that was divided by race
and privilege was the Roman Catholic Church. The clergy pro-


Mexico: A Country Study

vided education and social services to the rich and the destitute
alike, and clergy also functioned as a buffer in social conflicts.

The Road to Independence

The beginning of the eighteenth century in Spain coincided
with the crowning of Spain’s first Bourbon king. Under the
Habsburgs, Spain had been ruined by wars abroad and con-
flicts at home. The new Bourbon administration that assumed
power in 1707 was determined to effect structural changes in
Spain’s government and the economy to centralize power in
the monarch. The colonies also received increased attention,
mainly in terms of their defense and the reorganization of
their economies.

The Bourbon Reforms

During the reign of the third Bourbon king of Spain,
Charles III (1759-88), the Bourbons introduced important
reforms at home and in the colonies. To modernize Mexico,
higher taxes and more direct military control seemed to be
necessary; to effect these changes, the government reorga-
nized the political structure of New Spain into twelve intenden-
cias, each headed by an intendente under a single commandant
general in Mexico City, who was independent of the viceroy
and reported directly to the king.

The economic reforms were directed primarily at the min-
ing and trade sectors. Miners were given fueros and were
allowed to organize themselves into a guild. Commerce was lib-
eralized by allowing most Spanish ports to trade with the colo-
nies, thus destroying the old monopoly held by the merchants
of the Spanish port of Cadiz.

The Bourbon reforms changed the character of New Spain
by revising governmental and economic structures. The
reforms also prompted renewed migration of Spaniards to the
colonies to occupy newly created government and military
positions. At the same time, commerce, both legal and illegal,
was growing, and independent merchants were also welcomed.
The new monied classes of miners and merchants were the real
promoters of the successes of the reforms enacted by the Bour-

Early Discontent: Criollos and Clergy

Economic expansion and a certain degree of political relax-


Historical Setting

ation in the 1700s gave rise to greater expectations of auton-
omy by the colonists, especially after the republican revolutions
in the United States (1776), France (1789), and Haiti (1804).
Social stratification in New Spain, marked by discrepancies
between the rich and the poor and between criollos and penin-
sulares, however, worked to prevent the necessary social cohe-
sion for a revolutionary undertaking, even though the tensions
for a revolution continued to build. Peninsulares from all walks
of life believed themselves superior to their American-born
counterparts. In reaction to such discrimination, criollos
showed pride in things that pertained to Mexico. Criollos con-
sidered themselves subjects of the Spanish crown, however, and
also abided by the doctrines of the Roman Catholic Church.
More important, criollos did not want an egalitarian society —
privileges were fine as long as they benefited from them.

In Europe, Napoleon Bonaparte invaded the Iberian Penin-
sula in 1808. When French troops entered Madrid, the Habs-
burg king, Charles IV, abdicated, and Napoleon named his
brother Joseph Bonaparte as the new king. Many Spanish patri-
ots in unoccupied parts of Spain declared Ferdinand VII, son
of Charles IV, as the new monarch. When the news of Charles
IV’s abdication reached New Spain, considerable turmoil arose
over the question of whether Ferdinand VII or Joseph was the
legitimate ruler of the colony. Hoping to be named king of a
newly independent country, Viceroy Jose de Iturrigaray sup-
ported the criollos of New Spain when they proposed a junta to
govern the colony. Peninsulares realized the danger of such an
association between criollos and the administration and thus
orchestrated a coup d’etat in 1808 to defend their privileges
and standing in colonial society. After the coup, Iturrigaray was
replaced by a senile puppet Spaniard, Pedro Garibay, much to
the despair of the criollos.

Wars of Independence, 1810-21

The eleven-year period of civil war that marked the Mexican
wars of independence was largely a byproduct of the crisis and
breakdown of Spanish royal political authority throughout the
American colonies. A successful independence movement in
the United States had demonstrated the feasibility of a republi-
can alternative to the European crown. For most politically
articulate criollos, however, a strong cultural affinity with the
mother country, a preference for stability and continuity, and
alienation from Mexico’s native and poor mestizo populations


Mexico: A Country Study

were significant disincentives to a radical break with the estab-
lished order. Dissatisfaction with peninsular administrative prac-
tices and anti-criollo discrimination at many levels of the
colonial government and society were important foci of discon-
tent, but beyond small pockets of radical conspirators, these
grievances had not yet spawned a pronounced wave of proinde-
pendence criollo sentiment at the beginning of the nineteenth

The French occupation of Spain and the overthrow of the
Iturrigaray junta created a vacuum of legitimacy, as it was no
longer clear that the ad hoc peninsular administration repre-
sented any authority or interests other than its own. A revolt
would no longer necessarily be a challenge to the paternal
crown and the faith that it ostensibly defended, but would
instead shake off the rule of the increasingly despised gachu-
pines, as the peninsulares were derisively called. It was in this con-
text that a radical criollo parish priest, Miguel Hidalgo y
Costilla, was able to lead the first truly widespread insurrection
for Mexican independence.

Hidalgo and Morelos

Soon after being named parish priest in the small town of
Dolores, Hidalgo began to promote the establishment of vari-
ous small manufacturing concerns. He realized the need for
diversification of industrial activities in an area that had the
mines of Guanajuato as its major business. At the same time,
during his seven years at Dolores, Hidalgo promoted discussion
groups at his house, where Indians, mestizos, criollos, and
peninsulares were welcomed. The themes of these discussions
were current events, to which Hidalgo added his own input of
social and economic concerns. The independence movement
was born out of these informal discussions and was directed
against Spanish domination of political and economic life in
New Spain. December 8, 1810, was set for the beginning of the

The plans were disclosed to the central government, and the
conspirators were alerted that orders had been sent for their
arrest. Pressed by this new development, on September 16,
1810, Hidalgo decided to strike out for independence without
delay (this date is celebrated as Mexico’s independence day).
The church bells summoned the people, and Hidalgo asked
them to join him against the Spanish government and the
peninsulares in the famous Grito de Dolores (Cry of Dolores):


Historical Setting

“Long live Our Lady of Guadalupe! Death to bad government!
Death to the gachupinesl” The crowd responded enthusiasti-
cally, and soon an angry mob was marching toward the
regional capital of Guanajuato. The miners of Guanajuato
joined with the native workers of Dolores in the massacre of all
peninsulares who resisted them, including the local intendente.

From Guanajuato, the independence forces marched on to
Mexico City after having captured Zacatecas, San Luis Potosf,
and Valladolid. On October 30, 1810, they encountered resis-
tance at Monte de las Cruces and, despite a rebel victory, lost
momentum and did not take Mexico City. After a few more vic-
tories, the revolutionary forces moved north toward Texas. In
March of the following year, the insurgents were ambushed
and taken prisoner in Monclova (in the present-day state of
Coahuila). Hidalgo was tried as a priest by the Holy Office of
the Inquisition and found guilty of heresy and treason. He was
later condemned to death. On July 31, 1811, Hidalgo was exe-
cuted by firing squad. His body was mutilated, and his head was
displayed in Guanajuato as a warning to other would- be insur-

After the death of Hidalgo, Jose Maria Morelos Pavon
assumed the leadership of the revolutionary movement. More-
los took charge of the political and military aspects of the
insurrection and further planned a strategic move to encircle
Mexico City and to cut communications to the coastal areas. In
June 1813, Morelos convoked a national congress of represen-
tatives from all of the provinces, which met at Chilpancingo in
the present-day state of Guerrero to discuss the future of
Mexico as an independent nation. The major points included
in the document prepared by the congress were popular sover-
eignty, universal male suffrage, the adoption of Roman Cathol-
icism as the official religion, abolition of slavery and forced
labor, an end to government monopolies, and an end to corpo-
ral punishment. Despite initial successes by Morelos’s forces,
however, the colonial authorities broke the siege of Mexico
City after six months, captured positions in the surrounding
areas, and finally invaded Chilpancingo. In 1815 Morelos was
captured and met the same fate as Hidalgo.

From 1815 to 1821, most of the fighting by those seeking
independence from Spain was done by isolated guerrilla
bands. Out of these bands rose two men, Guadalupe Victoria
(whose real name was Manuel Felix Fernandez) in Puebla and
Vicente Guerrero in Oaxaca, both of whom were able to com-


Mexico: A Country Study

mand allegiance and respect from their followers. The Spanish
viceroy, however, felt the situation was under control and
issued a general pardon to every rebel who would lay down his

After ten years of civil war and the death of two of its
founders, by early 1820 the independence movement was stale-
mated and close to collapse. The rebels faced stiff Spanish mili-
tary resistance and the apathy of many of the most influential
criollos. The violent excesses and populist zeal of Hidalgo’s and
Morelos’s irregular armies had reinforced many criollos’ fears
of race and class warfare, ensuring their grudging acquies-
cence to conservative Spanish rule until a less bloody path to
independence could be found. It was at this juncture that the
machinations of a conservative military caudillo coinciding
with a successful liberal rebellion in Spain, made possible a rad-
ical realignment of the proindependence forces.

Iturbide and the Plan of Iguala

In what was supposed to be the final government campaign
against the insurgents, in December 1820, Viceroy Juan Ruiz de
Apodaca sent a force led by a royalist criollo officer, Augustin
de Iturbide, to defeat Guerrero’s army in Oaxaca. Iturbide, a
native of Valladolid, had gained renown for the zeal with which
he persecuted Hidalgo’s and Morelos’s rebels during the early
independence struggle. A favorite of the Mexican church hier-
archy, Iturbide was the personification of conservative criollo
values, devoutly religious, and committed to the defense of
property rights and social privileges; he was also disgruntled at
his lack of promotion and wealth.

Iturbide’s assignment to the Oaxaca expedition coincided
with a successful military coup in Spain against the new monar-
chy of Ferdinand VII. The coup leaders, who had been assem-
bled as an expeditionary force to suppress the American
independence movements, compelled a reluctant Ferdinand
to sign the liberal Spanish constitution of 1812. When news of
the liberal charter reached Mexico, Iturbide saw in it both a
threat to the status quo and an opportunity for the criollos to
gain control of Mexico. Ironically, independence was finally
achieved when conservative forces in the colonies chose to rise
up against a temporarily liberal regime in the mother country.
After an initial clash with Guerrero’s forces, Iturbide switched
allegiances and invited the rebel leader to meet and discuss
principles of a renewed independence struggle.


Historical Setting

While stationed in the town of Iguala, Iturbide proclaimed
three principles, or “guarantees,” for Mexican independence
from Spain: Mexico would be an independent monarchy gov-
erned by a transplanted King Ferdinand or some other conser-
vative European prince, criollos and peninsulares would
henceforth enjoy equal rights and privileges, and the Roman
Catholic Church would retain its privileges and religious
monopoly. After convincing his troops to accept the principles,
which were promulgated on February 24, 1821, as the Plan of
Iguala, Iturbide persuaded Guerrero to join his forces in sup-
port of the new conservative manifestation of the indepen-
dence movement. A new army, the Army of the Three
Guarantees, was then placed under Iturbide’s command to
enforce the Plan of Iguala. The plan was so broadly based that
it pleased both patriots and loyalists. The goal of independence
and the protection of Roman Catholicism brought together all

Iturbide’s army was joined by rebel forces from all over
Mexico. When the rebels’ victory became certain, the viceroy
resigned. On September 27, 1821, representatives of the Span-
ish crown and Iturbide signed the Treaty of Cordoba, which
recognized Mexican independence under the terms of the
Plan of Iguala. Iturbide, a former royalist who had become the
paladin for Mexican independence, included a special clause
in the treaty that left open the possibility for a criollo monarch
to be appointed by a Mexican congress if no suitable member
of the European royalty would accept the Mexican crown.

Empire and Early Republic, 1821-55

The Abortive Empire, 1821-23

According to the Plan of Iguala, a provisional government
was set up while an independent congress deliberated on the
future of the nation. Congress was able to agree on two major
issues: to cut the size of the Army of the Three Guarantees and
to determine the eligibility of officials for the planned regency
that eventually would replace the provisional government. As
congress deliberated, Iturbide realized that power was slipping
from his hands and decided to stage a dramatic demonstration
on his behalf. On the evening of May 18, 1822, his troops were
ordered to march through Mexico City in support of their
commander. The demonstration by the Army of the Three
Guarantees was joined by other soldiers and by the populace as


Mexico: A Country Study

it proceeded toward Iturbide’s residence. “Long live Agustin I,
Emperor of Mexico!” was the acclamation, at which Iturbide
pretended surprise. The following day, congress named Itur-
bide as the constitutional emperor of Mexico. The arrange-
ments for the coronation were pretentious but still in accord
with Iturbide’s understanding of the Mexican ethos. Iturbide
recalled the importance of the monarchy in maintaining stabil-
ity and control during the colonial period, and he decided to
take full advantage of tradition.

The new empire faced serious economic problems. After the
wars, the public coffers were empty, and the bureaucracy had
grown. Modest tax adjustments were tried, but the results were
meager. In congress, discontented factions sharply criticized
the government, and Iturbide’s recourse was to dissolve the leg-
islative branch and to have all opposition delegates arrested in
August 1822. In Veracruz, the commander of the garrison,
Antonio Lopez de Santa Anna Perez de Lebron, rose against
Iturbide and proclaimed a republic on December 1, 1822.
Santa Anna was quickly joined by other revolutionaries —
including a disenchanted Vicente Guerrero, Nicolas Bravo,
and Guadalupe Victoria. Together, they drew up the Plan of
Casa Mata on February 1, 1823. By midmonth, Iturbide, realiz-
ing the failure of his efforts, abdicated the throne. Rebel forces
encountered no opposition when they arrived in Mexico City.
In July the United Provinces of Central America (consisting of
Spanish-speaking Central America except for present-day Pan-
ama), which had been forcibly incorporated into the empire by
Iturbide, declared their independence. (The province of Chia-
pas, belonging to the Captaincy General of Guatemala, opted
to remain a part of Mexico.) The experience of an empire had
failed, and the idea of a monarchical system for Mexico would
be dismissed for four decades. Iturbide’s excesses had worked
to the benefit of the republicans.

The Federalist Republic, 1824-36

After the fall of the empire, a provisional government was
installed consisting of Bravo, Victoria, and Pedro Celestino
Negrete. Delegates were elected to the Constitutional Congress
that entered into session on November 27, 1823. The congress
had two major factions: the federalists, who feared control
from a conservative Mexico City and were supported by liberal
criollos and mestizos; and the more conservative centralists,
who preferred the rule of tradition and drew their allegiance


Historical Setting

from the clergy, conservative criollos, the landowners, and the

Although the federalist forces largely prevailed in writing the
new constitution, the centralists won three major concessions.
The constitution of 1824, which was strongly influenced by the
United States constitution and Mexico’s legislative relationship
with Spain since 1810, established the United Mexican States
(Estados Unidos Mexicanos) as a federal republic composed of
nineteen states and four territories (see Constitutional History,
ch. 4). Power was distributed among executive, legislative, and
judicial branches of government. Legislative power was wielded
by the Senate and the Chamber of Deputies, while executive
power was exercised by a president and a vice president elected
by the state legislatures for four-year terms. In spite of the lib-
eral outlook of the constitution, certain traditional privileges
were maintained: Roman Catholicism remained the official
religion, the fueroswere retained by the military and clergy, and
in national emergencies the president could exercise unlim-
ited powers.

During the administration of Mexico’s first president, Gua-
dalupe Victoria, economic conditions worsened as government
expenditures soared beyond revenues. Declining economic
conditions convinced the criollos that there was more behind
the economic decline than bad management by peninsulares.
One of the government’s major burdens was the assumption of
all debts contracted during the late colonial period and the
empire, a substantial sum. The government’s ability to service
the debt was severely constrained by the costs of maintaining a
50,000-strong standing army and the insufficiency of revenues
generated by tariffs, taxes, and government monopolies. To
cover the shortfall, Victoria accepted two large loans on stiff
terms from British merchant houses. The British had sup-
ported independence movements in Spanish colonies and saw
the loans as an opportunity to further displace Spain as the
New World’s dominant mercantile power.

Mexico’s financial crisis was overshadowed in 1827 by a con-
servative rebellion led by Vice President Bravo. The revolt was
quickly suppressed by generals Santa Anna and Guerrero, but
political tensions remained high as the presidential elections of
1828 approached. The September 1828 elections pitted Gene-
ral Guerrero as the liberal candidate for the federalists against
conservative Manuel Gomez Pedraza, who had served as secre-
tary of war in Victoria’s bipartisan cabinet. The voting results


Mexico: A Country Study

from the state legislatures showed Gomez Pedraza to be the
winner in ten of the nineteen states, but the liberals refused to
turn over the government, claiming that Gomez Pedraza had
used his authority over the army to pressure the states into vot-
ing in his favor. A period of confusion ensued as two rival gov-
ernments and their respective military factions battled over the
presidential succession. The liberals finally emerged victorious
after Gomez Pedraza abandoned the presidential palace under
sustained pressure from rebels commanded by Santa Anna and
Lorenzo de Zavala.

President Guerrero took power over a liberal government
shrouded in questionable legality and dependent upon the loy-
alty of the military. Immediately upon assuming office, Gue-
rrero experienced his first major crisis when the Spanish
attempted to retake Mexico. A Spanish force of 3,000 soldiers
under the command of General Isidro Barradas landed at
Tampico in July 1829. Guerrero sent Santa Anna to dislodge
the Spanish force in August, but the Mexican general could
not launch an effective assault and instead dug in for a siege.
Cut off from supplies and weakened by disease, the Spanish
surrendered to the Mexicans in October. In the aftermath of
the Spanish withdrawal, Santa Anna was widely hailed as the
savior of the republic.

With the Spanish threat gone, Guerrero enacted several lib-
eral reforms, including the abolition of slavery in September
1829. His forceful style of governing, made possible by his
retention of emergency presidential powers obtained during
the Spanish invasion, gave the conservatives renewed cause to
rebel. In early 1830, the conservative vice president, Anastasio
Bustamante, led a successful military-backed revolt against
Guerrero and installed himself as Mexico’s third president.
While attempting to flee the country in January 1831, Gue-
rrero was captured and executed by government soldiers on
Bustamante’s orders. Bustamante’s conservative government
was highly unpopular and repressive. In early 1832, Santa Anna
denounced Bustamante in Veracruz, occupied the city, and
appropriated its custom revenues. Santa Anna’s defiance
spurred additional revolts throughout the states, leading to the
eventual collapse of the conservative government and the
return of the liberals.

The highly popular Santa Anna was elected president under
the liberal banner in early 1833. Instead of assuming office,
however, he withdrew into semiretirement and delegated the


Historical Setting

presidency to his vice president, Valentin Gomez Farias. The
liberal Gomez Farias government was strongly reformist, to the
detriment of traditional church and military privileges. Among
its reforms, the new administration decreed that payment of
tithes would no longer be compulsory, and it transferred to the
nation the right to make ecclesiastical appointments. In addi-
tion, Gomez Farias reduced the size of the army and elimi-
nated its fueros.

Gomez Farias’s far-reaching reforms drew a characteristically
strong response from conservative elites, the army, and the
church hierarchy. Under the banner of religion y fueros, the inev-
itable conservative backlash gained strength throughout the
winter of 1833. In April 1834, Santa Anna abandoned the lib-
eral cause and deposed Gomez Farias. The renowned general
promptly dismissed congress and assumed dictatorial powers,
bringing an end to liberal rule under the federal republic.

Centralism and the Caudillo State, 1836-55

In the two decades after the 1834 collapse of the federal
republic, Santa Anna dominated Mexico’s politics. Between
1833 and 1855, the caudillo occupied the presidency eleven
times, completing none of his terms and frequently leaving the
government in the hands of weak caretaker administrations.
During this period, Mexico went to war on three separate occa-
sions and lost half of its territory through sale or military
defeat. Fiscal insufficiency kept Mexico constantly on the verge
of bankruptcy and foreign military intervention.

Santa Anna repeatedly rose to the presidency, only to be cast
out in the wake of scandals and military defeats. Invariably, he
returned — even from exile — to lead the republic once more
into military glory or out of insolvency. Santa Anna’s bravery,
energy, and organizational abilities were often matched by his
vanity, cruelty, and opportunism. His feats of heroism in victori-
ous battle, his bold interventions in the political life of the
country, and his countless shifts from one side of the political
spectrum to the other responded to the insecurities of Mexican
nationalists and the vacillations of the republic’s fractious polit-
ical class.

The Constitution of 1836

Upon assuming dictatorial powers, Santa Anna promptly
annulled Gomez Farias’s reforms and abolished the constitu-
tion of 1824. The authoritarian principles that underlay Santa


Mexico: A Country Study

Anna’s rule were subsequently codified in the constitution of
1836, also known as the Siete Leyes (Seven Laws). Under the
constitution of 1836, Mexico became a centralist regime in
which power was concentrated in the president and his imme-
diate subordinates. The states of the former federal republic
were refashioned as military districts administered by regional
caudillos appointed by the president, and property qualifica-
tions were decreed for congressional officeholders and voters.

The nationalist and authoritarian style of the new centralist
regime soon brought it into conflict with the loosely governed
lands of Mexico’s northern frontier. Santa Anna’s efforts to
exert central authority over the English-speaking settlements in
the northern state of Coahuila-Tejas eventually collided with
the growing assertiveness of the frontier population that
described itself as Texan.

The Loss of Texas

Texas (known as Tejas) had been part of New Spain since
the early colonial period. In 1821 in an effort to colonize and
populate Texas, the Spanish commander in Monterrey granted
a concession to a United States pioneer, Moses Austin, to settle
the area under the Roman Catholic faith. Land could be
acquired for a nominal charge of US$0.25 per hectare, and
soon colonists from the United States started to pour into the
area. By 1835 they outnumbered the Mexicans, four to one.
Texas had no autonomous government and was politically
attached to the state of Coahuila. Most Mexicans began to fear
the incursions by North Americans and the possibility of losing
Texas to the United States. Restrictions were placed on the
future immigration of colonists from the United States, and sla-
very was abolished in 1829 in the hope of discouraging United
States southerners from moving into the area.

Santa Anna’s move to bring Texas under the political domi-
nation of Mexico City pushed the Texans to secede from
Mexico on November 7, 1835, and to declare their indepen-
dence in March 1836. In 1835 Santa Anna marched north in
the direction of San Antonio with an army of 3,000 men. He
reached San Antonio in March 1836 and learned that about
150 armed Texans had taken refuge at an old Franciscan mis-
sion, called the Alamo. He laid siege to the mission for several
days before the final attack on March 6, 1836. The Mexican
force took the mission the next day, killing all but five of the
defenders in battle (the five prisoners were later executed). On


Historical Setting

March 23, the Texan town of Goliad was surrounded by Mexi-
can forces, who compelled the Texan commander in charge to
surrender. On express orders from Santa Anna, 365 prisoners
were executed. The events at the Alamo and at Goliad stirred
strong anti-Mexican sentiment in the United States. Volunteer
fighters poured into Texas to stage a decisive blow against
Santa Anna. The Mexican commander in chief and his army
were ambushed and roundly defeated near the San Jacinto
River by a force commanded by Sam Houston on April 21.
Santa Anna, who had fled the scene of the battle, was captured
by the Texans two days later.

While under custody of the Texans, Santa Anna signed two
treaties with the Texas government: one ended hostilities by
pledging the withdrawal of Mexican troops to positions south
of the Rio Bravo del Norte (Rio Grande), and the other, a
secret treaty, recognized Texan independence from Mexico.

The Mexican-American War

After Texas attained its independence, the idea of its incor-
poration into the United States gained support both in Texas
and in the United States Congress. Definitive action on the
measure was delayed for several years, however, because of the
divisive issue of admitting another slave state into the United
States and the likely prospect that annexation would provoke a
war with Mexico. In early 1845, the United States Congress
passed a resolution in favor of the annexation of Texas, which
prompted Mexico to sever diplomatic relations with the United
States. The Mexican congress had never ratified Santa Anna’s
secret treaty with the Texans, and to underscore its opposition
to Texas’s independence, the Mexican congress passed a law
that retroactively annulled any treaties signed by a Mexican
negotiator while in captivity.

Further aggravating the dispute was the fact that the Texans
had issued a dubious territorial claim that expanded the repub-
lic’s southern and western boundary from the previously
accepted Nueces River to the Rio Bravo del Norte. By claiming
all of the land up to the headwaters of the Rio Bravo del Norte,
the Texans more than doubled the size of their republic to
include parts of present-day New Mexico, Colorado, Okla-
homa, Kansas, and all of present-day western Texas.

Shortly after Texas was admitted to the Union as the twenty-
eighth state, President James K. Polk dispatched a special
envoy, John Slidell, to Mexico City to settle the Texas boundary


Mexico: A Country Study

dispute and to arrange the purchase of California. The Mexi-
can president, Jose Joaqmn Herrera, had been willing to recog-
nize an independent Texas but was under intense domestic
pressure to reject United States annexation and Texas’s
expanded territorial claim. As a result, he refused to meet
Slidell and began reinforcing Mexican army units along the
Rio Bravo del Norte.

Hostilities between Mexico and the United States began on
April 25, 1846, when several United States soldiers were killed
in a cavalry skirmish with Mexican forces in the disputed terri-
tory. Shortly after the two sides declared war, Santa Anna was
recalled from exile in Cuba to once again lead Mexican troops
against a foreign invasion.

The United States Army attacked on three fronts: one col-
umn, under General Stephen W. Kearney, occupied California
and New Mexico; another column, under General Zachary Tay-
lor, entered northern Mexico; and a third detachment, com-
manded by General Winfield Scott, landed at Veracruz and
marched to Mexico City. California and New Mexico fell with
little bloodshed. Northern Mexico was the scene of fierce bat-
tles between Taylor and Santa Anna’s armies at Buena Vista.
Santa Anna initially struck hard at the outnumbered United
States forces, but he later abandoned the battle and returned
to Mexico City, prematurely claiming victory.

The heaviest fighting was done by Scott’s Army of Occupa-
tion, which landed at Veracruz on March 9, 1847. Rather than
attempt to occupy the city outright, Scott positioned his forces
west of it, cutting off Veracruz’s supply line from the capital.
After several days of heavy naval bombardment that killed hun-
dreds of civilians, Veracruz surrendered on March 27, 1847.

In Mexico City, the situation was chaotic. President once
again, Santa Anna denounced both congress and his own sub-
ordinates in the executive branch for their lack of resolve in
preparing the defense of the capital. They, in turn, denounced
him for his failures in battle. On August 20, 1847, the Army of
Occupation asked for the surrender of Mexico City, but the
battle continued until September 13, 1847, when the last bas-
tion of Mexican resistance fell during the famous Battle of
Chapultepec. During the battle, young cadets from the Mexi-
can military academy, the Nihos Heroes (or “boy heroes”) leapt
to their deaths rather than surrender. The United States vic-
tory marked the end of the war and the beginning of negotia-
tions for peace.


Historical Setting

Treaty of Guadalupe Hidalgo

According to the terms of the Treaty of Guadalupe Hidalgo
of February 2, 1848, the boundary between Mexico and the
United States was established at the Rio Bravo del Norte.
Mexico was then required to relinquish its territories of New
Mexico and Upper California (the present-day states of Califor-
nia, Nevada, Utah, and parts of Arizona, New Mexico, Colo-
rado, and Wyoming) and to accept Texas’s incorporation into
the United States. As compensation, the United States agreed
to pay US$15 million for the territories and to assume more
than US$3 million in claims from private citizens of these areas
against the Mexican government. Mexico lost more than one-
half of its territory as a result of the war with the United States.
The territorial losses and the brief but traumatic occupation of
Mexico City by United States troops engendered a deep-seated
mistrust of the United States that still resonates in Mexican
popular culture. Anti-United States nationalist sentiment was a
major intellectual current in the Mexican Revolution and con-
tinues to manifest itself in some aspects of Mexican society (see
Foreign Relations, ch. 4).

Santa Anna’s last political venture resulted in the sale of
more Mexican territory. In what is known in the United States
as the Gadsden Purchase, ratified by the United States Con-
gress in 1854, Santa Anna sold 77,692 square kilometers of land
in southern New Mexico and Arizona for US$10 million (see
fig. 2). This additional loss of territory alienated a large,
reform-minded group of young Mexicans, who then conspired
to oust Santa Anna.

Reform and French Intervention, 1855-67

The Revolution of Ayutla and the Reform Laws

The Mexican reform movement was inspired by the liberal
political philosophies of European intellectuals, such as Jean-
Jacques Rousseau, John Stuart Mill, and Pierre Joseph Proud-
hon. Their views were adopted by a group of Mexican intellec-
tuals who shared a strong commitment to moralize Mexican
politics. The most outstanding member of the group was
Benito Juarez, a Zapotec lawyer and politician. Juarez and his
cohorts went into exile in Louisiana, where they drew up the
Plan of Ayutla in 1854 for the overthrow of Santa Anna. As the
plan gained broad-based support, the conspirators began to


Mexico: A Country Study

International boundary of Mexico, 1836

® National capital

• Populated place

kxvvvi Traditional area of Texas (Austin land grant) — declared

independence in 1836, annexed by United States in 1845

HHH^ Area claimed by Texas government — ceded to United States
by Treaty of Guadalupe-Hidalgo, 1848

mmmm Additional area ceded to United States by Treaty of
Guadalupe-Hidalgo, 1848

lllllllll Gadsden Purchase, 1853

Source: Based on information from Cathryn L. Lombardi, John V. Lombardi, and K.
Lynn Stoner, Latin American History: A Teaching Atlas, Madison, Wisconsin,

Figure 2. Mexican Territorial Losses to the United States, 1836-53


Historical Setting

return to Mexico. In August 1855, in response to growing
opposition, Santa Anna resigned for the last time.

A provisional government was installed under Juan Ruiz de
Alvarez and the intellectuals of Ayutla; the ensuing period of
liberal rule came to be known as the Reform. The Reform was
touted as a Mexican version of the French Revolution. Several
laws, known collectively as the Reform Laws, abolished the
fueros, curtailed ecclesiastical property holdings, introduced a
civil registry, and prohibited the church from charging exorbi-
tant fees for administering the sacraments.

The Reform Laws polarized Mexican society along pro- and
anticlerical lines at a time when delegates were preparing the
constitution of 1857, as provided for in the Plan of Ayutla. The
new constitution was derived from that of 1824, but it reflected
a more liberal vision of society through its incorporation of the
Reform Laws. It reaffirmed the abolition of slavery, secularized
education, and guaranteed basic civil liberties for all Mexicans.
Both the Reform Laws and the constitution, however, divided
the political classes and set the stage for a civil war.

Civil War and the French Intervention

The civil war, commonly known as the War of the Reform,
that engulfed Mexico between 1858 and 1861 brought to light
the underlying conflicts that had been present in Mexican soci-
ety since independence. The conservative faction launched the
Plan of Tacubaya and, with the support of the military and the
clergy, dissolved congress and arrested Juarez. Juarez escaped
and established a “government in exile” in Queretaro (the lib-
erals later moved their capital to Veracruz) . The initial military
advantage was held by the conservatives, who were better
armed and had plentiful supplies, but by 1860 the situation was
reversed. The final battle took place just before Christmas
1860. The victorious liberal army entered Mexico City on Janu-
ary 1, 1861.

In March 1861, Juarez won the presidential election, but the
war left the treasury depleted. Trade was stagnant, and foreign
creditors were demanding full repayment of Mexican debts.
Juarez proceeded to declare a moratorium on all foreign debt
repayments. In October 1861, Spain, Britain, and France
decided to launch a joint occupation of the Mexican Gulf coast
to force repayment. In December troops from the three
nations landed at Veracruz and began deliberations. Because
the representatives of the three nations could not agree on the


Mexico: A Country Study

means to enforce the collection of the debt, Britain and Spain
recalled their armies. Spurred by dreams of reestablishing an
empire in the New World, the French remained and, with the
support of Mexican conservatives, embarked on an occupation
of Mexico.

In Puebla, the French troops encountered strong resistance
led by one of Juarez’s trusted men, General Ignacio Zaragoza,
who defeated the foreigners on May 5, 1862 (May 5 is cele-
brated todav as one of Mexico’s two national holidays). The fol-
lowing May, Puebla was surrounded once again by French
troops, who laid siege to the city for two months until it surren-
dered. The fall of Puebla meant easy access to Mexico City, and
Juarez decided to evacuate the capital after receiving approval
from congress.

The French encountered no resistance to their occupation
of Mexico City. In June 1863, a provisional government was
chosen, and in October a delegation of Mexican conservatives
invited Ferdinand Maximilian Joseph von Habsburg of Austria
to accept the Mexican crown, all according to the plans of
French emperor Napoleon III. Maximilian was a well-inten-
tioned monarch who accepted the crown believing that this act
responded to the desire of a majority of Mexicans. Before
departing for Mexico, Maximilian signed an agreement with
Napoleon III, under which Maximilian assumed the debts
incurred for the upkeep of the French army in Mexico. On
June 12, 1864, the Emperor Maximilian I and his Belgian wife,
Marie Charlotte Amelie Leopoldine, now called Empress Car-
lota, arrived in Mexico City. The republican government under
Juarez retreated to the far north.

Maximilian, schooled in the European liberal tradition, was
a strong supporter of Mexican nationalism. He soon found
resistance from all quarters of the political spectrum, however.
The conservatives expected the emperor to act against the
Reform Laws, but Maximilian refused to revoke them. Mexican
liberals appealed for military assistance from the United States
on the basis of the French violation of the 1823 Monroe Doc-
trine, but the United States was involved in its own civil war.
The end of the Civil War in the United States in 1865, however,
prompted a more assertive foreign policy toward Mexico and
released manpower and arms that w T ere directed to help Juarez
in his fight against the French. In Europe, France was increas-
insrlv threatened bv a belligerent Prussia. Bv November 1866,
Napoleon III began recalling his troops stationed in Mexico.


Historical Setting

Conservative forces switched sides and began supporting the
Mexican liberals. United republican forces resumed their cam-
paign on February 19, 1867, and on May 15, Maximilian sur-
rendered. He was tried and, on Juarez’s orders, was executed
on June 19.

The Restoration, 1 867-76

The liberal republicans under Juarez’s leadership consoli-
dated the victory of the principles of the constitution of 1857.
The Restoration, as the period from 1867 to 1876 is called, was
marked by peace and tolerance toward the conservatives.
Juarez returned to Mexico City on July 15, 1867, called for pres-
idential elections, and presented himself as a candidate. By the
end of the year, he was victorious.

The economy and the education system were vitally impor-
tant to Juarez’s new administration. Economic development
was based on the improvement of communications, the exploi-
tation of the country’s natural resources, and the revamping of
the mining sector through favorable tax guidelines. Seeking to
reduce banditry and to attract investment capital, Juarez
strengthened the rurales, the Rural Defense Force (Guardia
Rural) responsible for the security of roads and land cargo,
and placed it under the Ministry of Interior. The improvement
of communications began with the completion in 1873 of the
railroad that linked Mexico City with Veracruz, a Mexican ven-
ture that had been started in the 1850s. In the area of educa-
tion, a complete reorganization was directed by a commission
headed by the prominent physician and positivist intellectual,
Gabino Barreda. He devised a school curriculum that concen-
trated on mathematics and the physical sciences. For the first
time, education became mandatory. Despite new schools, the
liberal aspiration for literacy and schools open to all remained
an unfulfilled goal, as in most nineteenth-century rural societ-

At the end of his term in 1871, Juarez decided to seek reelec-
tion. His opponents were Jose de la Cruz Porfirio Diaz and
Sebastian Lerdo de Tejada, whose candidacies divided the lib-
eral faction and resulted in none of the candidates receiving a
majority of the votes. With no clear winner, it was up to con-
gress to choose among the three candidates or to reelect the
incumbent president. The congress chose Juarez. Diaz invoked
the principle of “no reelection” in the constitution of 1857 and


Mexico: A Country Study

staged a revolt in November 1871. On July 18, 1872, amidst the
Diaz rebellion, Juarez died of a heart attack.

New elections were called in 1872, and Lerdo won the presi-
dency. His administration was characterized by a continuous
effort to bring peace to the country, and he intervened militar-
ily in the countryside whenever it was necessary. Lerdo main-
tained the emphasis on communications through new railroad
and telegraph lines. In education, he directed his energies to
the construction of new schools and the enrollment of more
students. When the time came for electing a new president,
Lerdo showed interest in another four-year term. Diaz rose in
rebellion a second time in March 1876, again defending the
“no reelection” principle. Lerdo went into exile in the United
States, and on November 21, 1876, Diaz occupied Mexico City.
A political mastermind, surrounded by capable advisers, he
held power directly or indirectly for the next thirty-four years.
The period known as the “Porfiriato” (the period of Porfirio
Diaz’s rule) had begun.

The Porfiriato, 1876-1910

Propitious economic conditions did not greet Porfirio Diaz
upon his rise to power in 1876. Mexico remained saddled with
a huge foreign debt and an empty treasury. An army of bureau-
crats was owed back wages, the country had a poor interna-
tional credit rating, and persistent current account deficits
caused serious balance of payments problems. Investment,
whether foreign or domestic, was scarce, and the mining indus-
try had yet to recover from the revolutionary wars. The rela-
tively few mines in operation in 1876 were exploited
haphazardly, and extraction and smelting techniques were
archaic. Only a few miles of rail had been laid, transportation
and communications were rudimentary, and dock facilities
were dilapidated and unsafe. Endemic rural violence further
hindered commerce.

During his first four years in office, Diaz began to tackle eco-
nomic backwardness. He first decreed stiff measures against
contraband moving across the United States border. Smugglers
and bandits crossed the border from both sides, but Diaz would
not permit United States troops to enter Mexico in search of
them. Instead, he enlarged the Mexican border patrol. In 1877
Diaz agreed to honor US$4 million in claims by United States
citizens against Mexico.


Jose de la Cruz Porfirio Diaz,
president, 1876-80, 1884-1911
Courtesy New York Public Library

In 1880 at the end of his term and despite his followers’
wishes, Diaz left office. The next president, Manuel Gonzalez,
continued Diaz’s modernization program. Telegraph lines
began to operate, and railroad construction was kept apace. In
an attempt to meet his foreign debt obligations, Gonzalez with-
held the salaries of government officials, a move that led to a
harsh campaign against the president.

During Gonzalez’s tenure, Diaz gathered a large following
that restored him to office in 1884. Mexican positivism, embod-
ied in the slogan “order and progress,” was the backbone of the
modernization scheme supported by the cientificos, intellectual
followers of Barreda. Led by Jose Ives Limantour, who served as
adviser to Diaz, the cientificos developed a plan for economic
recovery that was to be carried out through the next twenty-
seven years of the Porfiriato.

Porfirian Modernization

Diaz’s strategy of export-oriented growth led to Mexico’s
rapid integration into the world economy. The modernization
program was based on exploitation of the country’s natural
resources, using cheap domestic labor and foreign capital and
technology for export production.


Mexico: A Country Study

Foreign capital fueled dynamic growth, and an expanding
rail network promoted export agriculture, manufacturing, and
mining. Agriculture and livestock export products expanded to
include cattle and cattle hides, coffee, cotton, henequen, sugar,
vanilla, and chicle. Railroads allowed the exploitation of new
land in the north for cotton cultivation and enabled Mexico to
double its cotton production between 1887 and 1910.

The Diaz regime encouraged manufacturing through
export incentives, high protective tariffs on foreign manufac-
tured products, low transportation costs, and abolition of the
transactions tax on business. The number of industrial enter-
prises — most of them heavily backed by United States, French,
German, and British investors — grew rapidly, and the volume
of manufactured goods doubled between 1877 and 1910.

The railroads also contributed to the revival of mining
because they provided the only feasible means of transporting
huge amounts of ore. Legal reforms in 1884 lowered taxes on
mining and allowed foreign ownership of subsoil resources,
spurring a large increase in United States and European invest-
ment in Mexican mines.

Society under the Porfiriato

Ironically, Mexico’s economic success during the Porfiriato
had negative social consequences. Although the economy grew
at an average annual rate of 2.6 percent, real income per capita
had recovered only to pre-1821 levels by 1911. After 1900
unemployment increased as mechanization displaced artisans
faster than unskilled workers were absorbed into new produc-
tive enterprises. Additionally, real and financial assets were
increasingly concentrated in the hands of a few local and for-
eign investors.

The rural peasantry bore most of the cost of modernization.
Government seizure of private and communal land increased
the landless rural population and led to further concentration
of land ownership. Taking advantage of an 1883 land law
intended to encourage foreign investment, by 1888 land com-
panies had obtained possession of more than 27.5 million hect-
ares of rural land. By 1894 these companies controlled one-
fifth of Mexico’s total territory. By 1910 most villages had lost
their ejidos (communal land holdings — see Glossary), a few
hundred wealthy families held some 54.3 million hectares of
the country’s most productive land, and more than half of all
rural Mexicans worked on these families’ huge haciendas.


Historical Setting

The modernization program was also brought about at the
expense of personal and political freedom. Diaz made certain
that “order” was maintained at all costs for the sake of
“progress.” Force was used whenever necessary to neutralize
opponents of the regime. Freedom of the press was nonexist-
ent. The army and the rurales became the forces of repression
for the maintenance of the Porfirian peace during the Porfi-
riato. Mock elections were held at all levels of government,
while Diaz appointed his loyal friends as political bosses.
Despite the modernization, Mexico remained a predominantly
poor and rural country, and class stratification became

The wealth that flowed into urban areas during the Porfi-
riato fostered the growth of an urban middle class of white-col-
lar workers, artisans, and entrepreneurs. The middle class had
little use for anything Mexican, but instead identified strongly
with the European manners and tastes adopted by the urban
upper class. The emulation of Europe was especially evident in
the arts and in architecture, to the detriment of indigenous
forms of cultural expression. The identification of the urban
middle class with the European values promoted by Diaz fur-
ther aggravated the schism between urban and rural Mexico.

The Revolution, 1910-20

The Early Phase

In the political arena, the Porfiriato was marked by the sys-
tematic violation of the principles of the constitution of 1857.
Diaz courted foreign interests, allowed the clergy again to
become openly influential in temporal matters, and gave the
army a free hand to violate guaranteed civil liberties while
opponents of the regime were either coopted or sent to jail.

Meanwhile, liberal writers and journalists began to challenge
the regime. These attacks became more coordinated with the
organization of liberal clubs and a liberal convention at San
Luis Potosi in 1900 and 1901 that defended the principles of
the constitution of 1857. For the next two years, liberal con-
gresses were held, but the persecution of representatives led
many liberals to seek asylum in the United States. The exiles
(especially the Flores Magon brothers, Juan Saraia, Antonio I.
Villareal, and Librado Rivera) issued a liberal proclamation on
July 1, 1906, from St. Louis, Missouri, that called for the over-
throw of Diaz. They then started a publication, Redencion, to set


Mexico: A Country Study

forth their ideas. The program presented in the proclamation
of St. Louis introduced new concepts in education, labor rela-
tions, land distribution, and agricultural credit. These ideas
reached Mexico through issues of Redencion smuggled across
the border.

In 1908 an unexpected development brought hope of politi-
cal change to the anti-Diaz political opposition. In an interview
with a United States reporter, Diaz stated that he would not
seek reelection in 1910. Liberals and dissident intellectuals
immediately seized the opportunity and nominated Francisco
I. Madero, the scion of a wealthy family in Coahuila, to run in
the upcoming election. In June 1910, relying on harsh mea-
sures, including the imprisonment of thousands of opposition
activists, Diaz was reelected. Madero, himself imprisoned, was
released from jail and went into exile in the United States.

Diaz began preparing a joint celebration — the one-hun-
dredth anniversary of Mexican independence and his eightieth
birthday — in September 1910. Mexico City went through a full
refurbishing. Buildings were dedicated, monuments were
unveiled, and numerous balls and celebrations were attended
by the entire diplomatic corps. The streets of the capital were
cleared of refuse and undesirables in order to present foreign-
ers with a positive picture of the society created by the Porfi-

In October 1910, Madero drafted the Plan of San Luis
Potosi, which called for the people to rise on November 20 to
demand the restoration of the democratic principles of the
constitution of 1857 and the replacement of Diaz with a provi-
sional government. Although it was mainly a political docu-
ment with scant reference to redressing Mexico’s many social
ills, the Plan of San Luis Potosi was enthusiastically received
among the widespread, but uncoordinated movements that
were already on the verge of rebellion against their respective
state governments. Copies of the plan, which Madero had
drafted in St. Louis, soon reached Mexico and were widely dis-
tributed. On the appointed day, Madero and a small band of
rebels crossed into Mexico, but finding no rebel armies with
which to rendezvous, they soon turned back.

By January 1911, however, a large-scale insurrection had bro-
ken out in the northern state of Chihuahua, led by Pascual
Orozco, a local merchant, and Francisco “Pancho” Villa.
Madero, who had declared himself provisional president in the
Plan of San Luis Potosi, returned to Mexico to lead the nascent


Francisco “Pancho” Villa,
revolutionary leader, 1911-17,
with a group of fighters
Courtesy Library of Congress

Emiliano Zapata,
revolutionary leader, 1911-17
Courtesy New York Public Library

Mexico: A Country Study

revolution. The successes of the rebel bands in Chihuahua
sparked similar uprisings throughout the country. As early as
1909 in Morelos, the peasant leader, Emiliano Zapata, had
recruited thousands of hacienda laborers and landless peasants
to attack the haciendas and reclaim lost lands.

In April Diaz sent finance minister Limantour to negotiate
an armistice with the northern rebels, who were besieging
Ciudad Juarez. When Limantour refused to negotiate Diaz’s
resignation, Villa and Orozco renewed their attack on Ciudad
Juarez and captured the town. By May several state capitals had
been lost to the rebels, and mobs filled the streets of Mexico
City shouting for Diaz to resign. On May 25, 1911, the eighty-
year-old dictator submitted his resignation to congress and
turned power over to a provisional government. The following
day Diaz quietly sailed for exile in France.

Madero’s Government

Madero assumed the presidency in November 1911. The
new administration faced insurmountable problems. The fall
of Diaz raised popular expectations of far-reaching social
reforms, especially land reform. Zapata had come to Mexico
City to claim hacienda land for the peasants of Morelos, which
to him was the only acceptable result of the overthrow of the
Diaz regime. Instead, Madero ordered Zapata to disband his
troops, and reluctantly Zapata acceded to Madero’s request.
The interim government did not think Zapata was demobiliz-
ing fast enough, however, and sent federal troops to disarm the
revolutionaries by force. Even though Madero was not respon-
sible for this action, Zapata withdrew his support for Madero.
Madero soon realized that to the liberals, the Revolution
meant political change, but to the revolutionary fighters it
meant radical social and economic transformations that
Madero would not be able to fulfill. Madero dealt with the
labor and land tenure problems politically through the
National Agrarian Commission and the Department of Labor.
However, the only tangible change was that labor groups felt
free to organize. They were also allowed to publish the newspa-
per Luz. Labor unrest continued, despite the government’s
attempts to control strikes. Madero’s democratic administra-
tion was failing its staunchest supporters, and rebellions began
to surface.

In November the Zapatista faction revolted under the princi-
ples of the Plan of Ayala, which asked for restoration of pri-


Historical Setting

vately owned lands to rural villages. The armed revolt spread
through the states of Morelos, Guerrero, Tlaxcala, Puebla,
Mexico, and even into Mexico City. By 1912 the Zapatista
forces had caused severe damage to railroad and telegraph
lines and had won several battles against federal troops.

Revolutionaries from other areas began to challenge the
new government, and an offensive was launched in March 1912
by Orozco, who accused Madero of abandoning the principles
of the Plan of San Luis Potosi. Orozco was defeated, however,
by Victoriano Huerta, the unscrupulous commander of the
federal forces. Meanwhile, Felix Diaz (Porfirio’s nephew) was
assembling an army in Veracruz to march against Madero, but
Madero was able to order his arrest andbring him to Mexico

Felix Diaz and other counterrevolutionaries plotted a mili-
tary coup from inside prison and proceeded to take the
National Palace on February 8, 1913. With the aid of loyal
troops under Huerta, Madero initially resisted the Diaz forces,
but street fighting and chaos overtook the city. On February
18, Huerta, seeing an opportunity to seize power, joined the
coup against Madero and had both the president and Vice
President Jose Maria Pino Suarez arrested.

Huerta’s decision to change sides was made with the knowl-
edge and assistance of United States ambassador Henry Lane
Wilson in what became known as the Pact of the Embassy.
Huerta extracted resignations from both Madero and Pino
Suarez and had himself appointed secretary of interior, which
made him the heir to the presidency, according to the provi-
sions of the constitution of 1857. That same evening, Huerta
was sworn in as president, and on February 21, Madero and
Pino Suarez were assassinated while being transferred to the
penitentiary in Mexico City.

The Huerta Dictatorship

Opposition to Huerta began to emerge once he assumed
power. Venustiano Carranza in Coahuila, Villa in Chihuahua,
and Alvaro Obregon in Sonora formed a front against the dic-
tator under the Plan of Guadalupe, issued in March 1913.
Zapata preferred to maintain his troops’ independence from
the northern coalition, but remained in revolt against Huerta.
The latter responded by increasing the size of the military by
forced conscription. Federal forces terrorized the countryside
and looted villages, and political assassinations became a trade-


Mexico: A Country Study

mark of Huerta’s rule. The country faced other problems. The
federal treasury was empty, and each faction began issuing its
own currency. Huerta’s government had not been recognized
by the United States, which considered him a usurper of the
previously elected government. Seeking a return to constitu-
tional rule, the administration of President Woodrow Wilson
channeled aid indirectly to the northern coalition.

By early 1914, Huerta was clearly losing on all fronts, but
there was one specific event that precipitated his resignation.
When United States sailors were arrested at Veracruz for tres-
passing on dock facilities, the commander of the United States
naval forces off Tampico demanded ceremonial salutes of the
United States flag by Mexican personnel. When the United
States demands were not met, United States troops occupied
Veracruz. Indignation brought about a series of reprisals
against United States citizens and their flag throughout
Mexico. In the face of growing disorder, Huerta resigned on
July 8, 1914.

The Constitution of 1 91 7

After the fall of Huerta, Carranza, chief of the northern coa-
lition, invited all revolutionary leaders to a military conference
at Aguascalientes to determine the future course of Mexico. A
split developed almost immediately: on one side were
Carranza, Obregon, and supporters of the plans of San Luis
Potosf and Guadalupe; on the other side were Zapata, Villa,
and the supporters of the Plan of Ayala. The convention chose
Eulalio Gutierrez, who had the support of the Villistas and the
Zapatistas, as provisional president, while Carranza, with
Obregon’s support, established a dissident government in Vera-
cruz. The country went through another period of civil war
and anarchy in which four governments claimed to represent
the will of the people: Carranza in Veracruz, Obregon in
Mexico City (after Gutierrez had left the city and established
his headquarters in Nuevo Leon), Roque Gonzalez Garza (sup-
ported by the Zapatistas), and Villa in Guanajuato. Later that
year, Carranza emerged as the victorious commander of the
revolutionary forces. His government was soon recognized by
the United States, and his troops were supplied by munitions
abandoned when United States forces left Veracruz.

United States support for Carranza prompted an aggressive
reaction from Villa. After 1916 Villa frequently raided United
States border towns and then retreated to Mexico. United


Historical Setting

States General John J. “Blackjack” Pershing’s troops crossed the
border in pursuit of Villa several times during 1917. Despite
Villa’s “victories” over Pershing, the true victor was Carranza.
To consolidate his power further and to institutionalize the
Revolution, he called for a meeting at Queretaro, where the
constitutionalists drew up a new supreme law for Mexico. The
Congress of Queretaro met for the first time on December 1,
1916. In commemoration of that event, the inauguration of all
Mexican constitutional presidents has taken place on Decem-
ber 1.

Carranza presented his draft of a constitution to the con-
gress. The draft was similar in many ways to the constitution of
1857, but gave extensive powers to the executive. The final ver-
sion of the constitution of 1917, however, gave additional rights
to the Mexican people. It was the fruit of the Revolution — an
expression of popular will that guaranteed civil liberties, no
presidential succession, and protection from foreign and
domestic exploitation to all Mexicans (see Constitutional His-
tory, ch. 4).

Carranza’ s Presidency

After formally accepting the constitution of 1917, Carranza
won the presidential election and was sworn into office on May
1, 1917. Conditions in Mexico were again close to chaos: the
economy had deteriorated during the years of civil war, com-
munications had been seriously disrupted, and shortages had
led to rampant inflation. Land and labor remained the basic
issues for the Mexican people, but Carranza chose to overlook
the constitutional provisions dealing with these issues and
returned lands expropriated during the Revolution. Despite
the president’s opposition, public enthusiasm for the labor pro-
visions of Article 123 led to the creation in 1918 of the
Regional Confederation of Mexican Workers (Confederation
Regional de Obreros Mexicanos — CROM), which would unify
and lead the labor movement in the years ahead. Meanwhile,
Mexico took advantage of United States involvement overseas
in World War I, its attention and troops distant from any fur-
ther intervention in Mexico.

In 1918 parts of the country still saw military action; the
fighting was particularly fierce in Morelos. The Zapatistas in
that area, who had very specific grievances, wanted more than
a constitution. In March 1919, Zapata sent an open letter to
Carranza, hoping by this means to bring the Zapatistas’


Mexico: A Country Study

demands before the whole population. Zapata expected that
Carranza, once confronted by public pressure, would be willing
to address the Zapatistas’ grievances. Carranza’s response was
very different, however. Jesus M. Guajardo, a colonel in the fed-
eral army, was contracted to deceive Zapata by offering alle-
giance to the revolutionaries. Zapata’s cautious acceptance of
Guajardo’s protests of loyalty led to a meeting on April 10,
1919, in Zapata’s territory. As Zapata entered the meeting area,
Guajardo’s men appeared ready to fire a salute in his honor but
instead they fired point-blank, killing the peasant leader and
thereby eliminating the last significant military opposition.

In 1920 just as Carranza was about to nominate a loyal subor-
dinate, Ignacio Bonilla, to serve as a puppet president, Adolfo
de la Huerta and Plutarco Elias Calles rose in opposition.
Under the Plan of Agua Prieta, they raised a constitutionalist
army of northerners and marched to Mexico City. Carranza
fled the capital and was assassinated in May while on the road
to exile. De la Huerta served briefly as provisional president,
but was replaced in November 1920 by Obregon, who was
elected to a four-year term. Shortly thereafter, Villa accepted a
peace offer from the federal government.

The Constructive Phase, 1 920-40

The Obregon Presidency, 1920-24

The four years of Obregon’s presidency (1920-24) were ded-
icated to beginning to realize the objectives of the constitution
of 1917. The military phase of the Revolution was over, and the
new administration began to build the bases for the next stage
of the revolutionary process of reconstruction.

Obregon’s choice for secretary of education was Jose Vascon-
celos, a distinguished lawyer and professor who had rejected
the elitist positivism of the cientificos. Vasconcelos adapted the
curricula of rural schools to Mexican reality by teaching stu-
dents basic skills in reading, writing, mathematics, history, and
geography. Seeking to integrate indigenous peoples into Mexi-
can society through education, Vasconcelos dispatched hun-
dreds of teachers to remote villages. Between 1920 and 1924,
more than 1,000 rural schools and more than 2,000 public
libraries were established. Vasconcelos also believed in instruct-
ing through images, and for that purpose he commissioned
works by Mexican muralists — foremost among them Diego


Historical Setting

Rivera — to decorate public buildings while depicting impor-
tant events in Mexican history and the ideals of the Revolution.

Obregon’s agrarian policies proved more traditional. He
believed that the Mexican economy could not afford to forego
productivity for the sake of radical agrarian reform. Conse-
quently, redistribution of land proceeded slowly. During his
administration, Obregon redistributed 1.2 million hectares to
landless peasants, a fraction of the eligible land. Obregon was
careful in handling Article 27 of the constitution, which
restricted land ownership by foreigners, because of fear of
intervention by the United States. Despite Obregon’s modera-
tion, United States oil companies launched a campaign against
the Mexican government, fearing possible implementation of
Article 27. A joint Mexican-United States commission agreed to
meet on Bucarelli Street in Mexico City in 1923. Under the
terms of the commission agreements, known as the Bucarelli
Agreements, Mexico upheld the principle of “positive acts.”
Mexico agreed that if a foreign enterprise improved the land
(in the case of oil, by installing oil drilling equipment), the
company’s holdings would not be nationalized. The United
States fulfilled its part of the agreement by recognizing the
Mexican government.

When the time came for the next presidential nomination,
Obregon’s choice was his secretary of interior, Plutarco Elias
Calles. The nomination met with strong opposition from land-
owners, who feared Calles’s radical reputation. Obregon suc-
ceeded in imposing his candidate because Calles had the
support of labor unions and Mexican nationalists. Overall,
Obregon’s government disappointed the more radical revolu-
tionary factions, as well as conservative interests, such as the
military, wealthy landowners, and the Roman Catholic Church,
but it brought Mexico a welcome degree of political stability.

The Calles Presidency, 1924-28

Calles was perhaps Mexico’s strongest political figure since
the Diaz dictatorship. Calles began seriously to implement
agrarian reform by distributing some 3.2 million hectares of
land during his term, in addition to developing agricultural
credit and irrigation. Labor was still organized into one
national union, CROM, run by Calles’s crony Luis Morones,
even though independent unions were emerging. Public edu-
cation facilities continued to expand, and Calles’s administra-
tion built another 2,000 schools.


Mexico: A Country Study

A major crisis developed, however, between the government
and the Roman Catholic Church. In 1926 the archbishop of
Mexico City, Jose Mora y del Rio, made public his view that
Roman Catholics could not follow the religious provisions of
the constitution of 1917. In defiance of the declaration by the
archbishop, Calles decided to implement fully several of the
constitutional provisions: religious processions were prohib-
ited; the church’s educational establishments, convents, and
monasteries were closed; foreign priests and nuns were
deported; and priests were required to register with the govern-
ment before receiving permission to perform their religious
duties. The church reacted by going on strike on July 31, 1926,
and during the three years that followed, no sacraments were
administered. Bloody revolts broke out in the states of Micho-
acan, Puebla, Oaxaca, Zacatecas, Jalisco, and Nayarit. To the
call of “Viva Cristo Rey” (Long live Christ the King), bands of
militant Roman Catholics, known as Cristeros, attacked govern-
ment officials and facilities and burned public schools. The
government responded with overwhelming force, using the
army and its own partisan bands of Red Shirts to fight the Cris-
teros. The fighting was vicious, with both sides engaging in
indiscriminate acts of terrorism against civilians and wide-
spread destruction of property. By 1929 the revolt had been
largely contained, and the Cristeros were compelled to lay
down their arms and accept most of the government’s terms.

The Maximato

In defiance of the “no-reelection” principle that had been
one of the key political legacies of the Revolution, Calles sup-
ported Obregon’s bid to recapture the presidency in 1928.
Beginning with the 1928 election, the presidential term was
increased from four to six years (sexenio). Thereafter, the sexenio
formed the basis for regular and orderly political succession.
Obregon won the election but was assassinated by a religious
fanatic before taking office on July 17, 1928. Seeking to ensure
political stability, Calles opted not to violate the “no-reelection”
principle and instead chose one of his supporters, Emilio
Portes Gil, as interim president (December 1928 to February
1930) until new elections could be held.

During the next six years (a period known as the Maximato),
Calles exercised behind-the-scenes control over Mexican poli-
tics through the actions of three presidents who were essen-
tially his puppets. By 1929 Calles’s political machine had found


Historical Setting

institutional expression as the National Revolutionary Party
(Partido Nacional Revolucionario — PNR). Unlike previous par-
ties, which existed only in name during electoral campaigns
and dissolved immediately thereafter, the PNR was designed to
be a permanent organization run exclusively by Calles as jefe
mdximo (supreme leader), through which he acted as de facto
president. Henceforth, the “official” party of the revolutionary
regime served as the dominant political organization in the
country and the primary dispenser of official patronage.

In the special election of 1929, called to select a figurehead
to serve out the remaining four years of Obregon’s term, Calles
chose Pascual Ortiz Rubio as the PNR candidate. Ortiz Rubio
was opposed by Jose Vasconcelos, who decried Calles’s thinly
veiled authoritarian rule and the growing corruption of the
older revolutionary generation. Relying on ballot stuffing and
other forms of electoral fraud, Ortiz Rubio defeated Vasconce-
los with 99.9 percent of the vote. Ortiz Rubio’s presidency
would be short-lived, however. Having demonstrated excessive
independence from Calles once in office, the president was
summarily removed by the “supreme leader” in September
1932 and replaced with a more compliant figure, Abelardo

The last two years of the Maximato under the presidency of
Rodriguez witnessed a steady rightward drift of the revolution-
ary regime. Deciding that the country could not forego agricul-
tural productivity for the sake of equity, Calles ordered a near
halt to further land redistribution. Organized labor, which was
seen as overly sympathetic to bolshevism and not loyal enough
to the PNR, was disavowed and suppressed. By the early 1930s,
the government was persecuting the Mexican Communist
Party and allowing fascist organizations to terrorize Mexico’s
small Jewish population.

As the election for the 1934-40 presidential sexenio
approached, Calles came under increasing pressure from the
left wing of the PNR to pursue with more vigor the social wel-
fare provisions of the constitution of 1917. Seeking to avoid a
party split, Calles mollified his party’s left wing by nominating
Lazaro Cardenas, a popular state governor, to succeed
Rodriguez. Cardenas had participated in the revolutionary
conflict as a constitutionalist military officer, achieving the
rank of brigadier general. While governor of his home state of
Michoacan, Cardenas gained recognition for his support of
public education and his good relationship with organized


Mexico: A Country Study

labor and peasant organizations. Cardenas’s modest efforts at
land reform at the state level earned him a reputation as a pop-
ulist. Calles, although wary of Cardenas, nevertheless expected
the new president to fall into line much as his three predeces-
sors had done.

Cardenismo and the Revolution Rekindled, 1934-40

Cardenas immediately showed his independence by becom-
ing the first Mexican president to campaign for office. Once in
office, he began his sexenio by adopting several popular mea-
sures. He reduced his presidential salary and decided not to
move into the national palace, he ordered a resumption of
land reform on an unprecedented scale, and he expressed tacit
support for a wave of urban strikes. Calles followed these devel-
opments with unease, and soon sought to undermine the new
president’s authority. A definitive break occurred between
Calles and Cardenas when the new president fired many of
Calles’s followers in the federal bureaucracy and closed down a
network of gambling houses owned by Calles’s associates. It
became apparent that Calles had underestimated Cardenas’s
commitment to reform and his political skills. Calles’s open
opposition to Cardenas finally earned the former leader forced
exile to the United States in 1936. Conservatives from San Luis
Potosf staged a rebellion in protest, but the military remained
loyal to the president and brought the revolt under control.

Land reform was one of Cardenas’s major accomplishments.
In the course of six years, he distributed almost 18 million hec-
tares — more than twice as much land as all of his predecessors
combined — to two-thirds of the Mexican peasantry through
the system of communal farms or ejidos (see Land Tenure, ch.
3). Even though agriculture suffered an initial setback because
of the loss of economies of scale and a lack of resources and
credit, the redistribution proved tremendously popular with
the majority of the Mexican people and earned Cardenas a spe-
cial place in Mexican history.

Church relations also improved during Cardenas’s presi-
dency. Key was the intervention of Luis Maria Martinez, arch-
bishop of Mexico. Martinez encouraged Roman Catholics to be
more sensitive to the social and economic welfare of society,
even though national education continued to be secular and
had become socialist in its emphasis. The labor movement also
received Cardenas’s attention. The president supported
Vicente Lombardo Toledano, a Marxist who reorganized labor


Ldzaro Cardenas, president,

Courtesy Library of Congress

into the Confederation of Mexican Workers (Confederacion
de Trabajadores Mexicanos — CTM). The old CROM had
become corrupt through the years, and the CTM became the
new, quasi-official representative of Mexican workers, develop-
ing programs and pushing for improvement of working condi-
tions and minimum wage schedules (see Organized Labor, ch.

Cardenas also reorganized the official Mexican party, the
PNR, to broaden its political base. The party was renamed the
Party of the Mexican Revolution (Partido de la Revolucion
Mexicana — PRM), and membership expanded to include rep-
resentatives of four corporately defined “sectors” of Mexican
society: labor, agrarian, military, and popular. The agrarian sec-
tor consisted of peasants and rural laborers, and the popular
sector included the small but growing middle class, civil ser-
vants, and small-scale merchants.

Cardenas’s boldest act was his expropriation in March 1938
of all foreign oil operations on Mexican territory. In response
to a strike by oil workers seeking higher wages, the government
intervened on their behalf, demanding that the mostly United
States-owned companies share more of their technical and
managerial expertise with Mexican nationals. When the com-
panies failed to comply with the worker-training demand,
Cardenas issued his sweeping expropriation of all foreign oil


Mexico: A Country Study

operations. Compensation was based on the underreported
“book” value of the properties. The expropriation, which
Cardenas considered a natural outcome of the constitutional
claim to national ownership of all subsoil resources, tempo-
rarily disrupted commerce between Mexico and the United
States. Nationalization, however, won Cardenas widespread
praise both within Mexico and throughout Latin America,
where nationalist sentiment against foreign commercial inter-
ests ran high.

In November 1941, on the eve of United States entry into
World War II, Mexico and the United States finally settled their
differences over the expropriated properties. Although it was a
significant political victory for Cardenas, the oil expropriation
cost Mexico dearly in terms of capital flight and foreign invest-
ment. For nearly twenty years, the new national petroleum
company, Mexican Petroleum (Petroleos Mexicanos — Pemex)
suffered from inadequate technical expertise and outdated

By the end of his term in 1940, Cardenas had dramatically
transformed the Mexican political system. Continuing the leg-
acy of executive predominance begun by Calles, Cardenas fur-
ther augmented presidential power by subordinating the entire
apparatus of the official party under the chief executive. In
addition, Cardenas expanded the role of the state in Mexican
society, establishing patron-client relationships among various
state agencies and the corporately defined interest groups. The
“institutionalization” of the Revolution resulted in a situation
in which the state became the sole mediator among competing
interest groups and the final arbiter of political disputes.

From Revolution to Governance, 1940-82

Avila Camacho’s Wartime Presidency, 1940-46

Cardenas’s nomination of Manuel Avila Camacho, a rela-
tively unknown career military officer, as the PRM candidate
for the presidency in 1940 surprised many Mexicans. Numer-
ous party members were aware of Avila Camacho’s conservative
tendencies. Moreover, in contrast to the anticlerical position
held by most Mexican politicians since the Revolution, during
the presidential campaign Avila Camacho had stated that he
was a believer and a Roman Catholic. The new president took
office on December 1, 1940, and, as expected, did not push for
enforcement of the most populist articles of the constitution.


Historical Setting

Land reform was slowed down, and its emphasis shifted from
reconstituting ejidos to promoting private ownership of land.

The conservative bent of the new administration was espe-
cially evident in the administration’s attitude toward labor.
Fidel Velasquez, a more conservative labor leader, replaced
Lombardo Toledano as head of the CTM. The government
withdrew much of its support for organized labor, and controls
were placed on the rights of strikers. By 1942 the CTM had lost
textile and building industry workers, who felt alienated from
the new leadership. Although the Avila Camacho administra-
tion created the Mexican Institute of Social Security (Instituto
Mexicano del Seguro Social — IMSS), the program initially ben-
efited only a small portion of the labor force.

Changes were also apparent in education as the Avila Cama-
cho administration introduced new education programs.
Greater emphasis was placed on private schools, and the gov-
ernment started a campaign that encouraged each literate citi-
zen to teach another person to read and write. Launched with
much fanfare, the impact of the campaign was short-lived, how-

Avila Camacho’s administration witnessed the expansion of
World War II in Europe. Exercising its independence from the
United States, Mexico initially attempted to remain neutral
after the United States entered the war in December 1941.
However, when two Mexican tankers were sunk by German sub-
marines in May 1942, Mexico declared war on Germany. The
declaration received full support from congress and most of
the Mexican population. On September 16, 1942, several
former presidents held an unprecedented meeting at the
National Palace for a public display of solidarity in the face of
war. Those present included former presidents de la Huerta,
Calles, Portes Gil, Ortiz Rubio, Rodriguez, and Cardenas. A
comprehensive national security policy was developed to
counter Axis espionage against Mexico and to defend Mexican
oil fields and military industries. Mexico participated in the
war effort mainly as a supplier of labor and raw materials for
the United States, although a Mexican fighter squadron fought
and sustained casualties in the Pacific theater.

In 1942 the Mexican and United States governments negoti-
ated a program to enlist migrant Mexican workers ( braceros) to
assist in harvesting United States crops. The program was ini-
tially intended to supplement the depleted rural labor force in
the United States, who had been displaced by the war effort.


Mexico: A Country Study

The bracero program, which continued into the 1960s, subse-
quently lured hundreds of thousands of Mexican laborers with
and without legal documentation to seek employment across
the border.

By early 1946, the PRM’s political power base included new
groups in Mexican society. The party now had representatives
of the business and industrial communities within its popular
sector. As a sign that the official party viewed the transitional
phase of the Revolution as ended, officials decided to rename
the party the Institutional Revolutionary Party (Partido Revolu-
cionario Institucional — PRI). The same January 1946 conven-
tion nominated Miguel Aleman Valdes to be the PRI candidate
for the presidential term of 1946-52.

The Aleman Sexenio, 1946-52

The Aleman presidency marked a turning point in contem-
porary Mexican politics. With the election of Aleman (a lawyer
by profession), the torch was passed to a new generation of
civilian politicians who had not participated in the military
campaigns of the Revolution. The age of the generals in Mexi-
can politics was over. Henceforth, the military assumed a low
profile, surrendering many of its institutional prerogatives to a
civilian-dominated PRI.

Aleman’s presidency was also noteworthy because it repre-
sented the consolidation in power of a PRI faction that was
more probusiness and less nationalistic than the Cardenas wing
of the party. One of Aleman’s first acts as president was to reaf-
firm amicable postwar relations between Mexico and the
United States. In a symbolic gesture of rapprochement, United
States President Harry S Truman and President Aleman visited
each other’s countries. On September 2, 1947, Mexico was
among the signatories of the Inter-American Treaty of Recipro-
cal Assistance (Rio Treaty), which outlined a system of mutual
defense on the part of Western Hemisphere nations against
outside aggression.

The Aleman administration attempted to promote industri-
alization and economic growth by embarking on an extensive
program of infrastructure improvements. Major flood control
and irrigation projects were built in northern Mexico, greatly
expanding the opportunities for large-scale agribusiness. The
exploitation of cheap hydroelectric power and the expansion
of the national road network were undertaken to help spur
heavy industry and tourism. By the end of Aleman’s sexenio in


Historical Setting

1952, Mexico had four times as many kilometers of paved roads
(roughly 16,000 kilometers) as in 1946. Another legacy of the
Aleman era was the completion in 1952 of a new campus — in
what was then suburban Mexico City — for the flagship of the
Mexican university system, the National Autonomous Univer-
sity of Mexico (Universidad Nacional Autonoma de Mexico —

Aleman was viewed as much less sympathetic than his imme-
diate predecessors to the demands of labor and the rural popu-
lations of central and southern Mexico. To promote growth
without generating high inflation, the government acted
through the PRI-afnTiated unions to suppress the wage
demands of labor. The government also began a new strategy
of “stabilizing development.” The new program was based on
promoting industrialization through import substitution (see
Glossary), heavy subsidies of industry, and maintaining low
inflation by suppressing real wages.

Further straying from the ideals of the Revolution, Aleman’s
administration became noted for its tolerance of official cor-
ruption. The government’s growing involvement in the econ-
omy provided ample opportunities for kickbacks and other
forms of illicit enrichment, and several senior government offi-
cials became wealthy while in office. The scale of official venal-
ity was enough to spark a public outcry and protests from
within the PRI. To restore popular faith in the ruling party, Ale-
man nominated Adolfo Ruiz Cortines, a former governor of
Veracruz, minister of interior, and a man noted for his impec-
cable character, to succeed him in 1952.

The Ruiz Cortines Sexenio, 1952-58

Despite his friendship with Aleman, Ruiz Cortines set out to
eliminate the corruption and graft that had tainted the previ-
ous administration. In his inaugural speech on December 1,
1952, Ruiz Cortines promised to require complete honesty
from officials in his government and asked that they make pub-
lic their financial assets. He later fired several officials on
charges of corruption.

The economy continued to grow with government support.
The government, for example, devaluated the peso (Mex$ —
for value, see Glossary), a move that helped to encourage inves-
tors from abroad. Ruiz Cortines did not promote a new con-
struction boom but rather channeled money into public health
programs. The IMSS, under the directorship of Antonio Ortiz


Mexico: A Country Study

Mena, was expanded to provide medical services at hospitals
and clinics throughout the country, and a more comprehen-
sive system of benefits for eligible workers and their families
was created.

By the end of Ruiz Cortines’s sexenio in 1958, three consecu-
tive administrations had pursued probusiness policies that
departed significantly from the agrarian populism practiced by
Cardenas. Import-substitution industrialization had generated
rapid growth in urban areas, while land reform was scaled back
and redefined to emphasize individual private farming. Mean-
while, Mexico’s population more than doubled in less than
thirty years, from 16 million in the mid-1950s to 34 million in
1960. The resulting population pressure, as well as the concen-
tration of services and new jobs in urban areas, encouraged
massive urban migration — most notably in and around Mexico
City. The proliferation of urban shantytowns in the capital’s
outskirts became a growing symbol of the imbalance between
urban and rural development in postwar Mexico.

With wartime calls for unity and austerity now well past, the
Cardenas faction of the PRI reemerged as a powerful force act-
ing on behalf of the party’s core agrarian and labor constituen-
cies. Former President Cardenas (who continued to wield
considerable influence in national politics) persuaded the
party to nominate one of his followers, Adolfo Lopez Mateos,
as the PRI candidate for the 1958 presidential election.

Lopez Mateos and the Return to Revolutionary Policies, 1958-

The election of Lopez Mateos to the presidency in August
1958 restored to power the PRI faction that had historically
emphasized nationalism and redistribution of land. As in past
elections, the PRI won handily over the conservative candidate
of the opposition National Action Party (Partido de Accion
National — PAN) with an overwhelming 90 percent of the vote.
Although the PRI regularly engaged in vote buying and fraud
at the state and local levels, presidential races were not credibly
contested by the opposition, and little interference was
required to keep the official party in office. Although the 1958
election was the first in which women were able to vote for the
president, the enfranchisement of women did not significantly
affect the outcome of the presidential race.

Lopez Mateos was widely viewed as the political heir of
Cardenas, whose nationalism and social welfare programs had


Historical Setting

left a lasting impact on Mexican political culture. After nearly
two decades of urban bias in government policy, Lopez Mateos
took tentative steps to redress the imbalance between urban
and rural Mexico. His administration distributed more than 12
million hectares of land to ejidos and family farmers and made
available new land for small-scale cultivation in southern
Mexico. In addition, the IMSS program was introduced into
rural areas, and major public health campaigns were launched
to reduce tuberculosis, poliomyelitis, and malaria.

Whereas the government regained much of the support of
agrarian interests, Lopez Mateos’s relations with organized
labor were strained. As Ruiz Cortines’s labor minister, Lopez
Mateos had gained a reputation for fairness and competence
in the settlement of labor disputes. As president, however, he
opposed the growing radicalization and militancy among ele-
ments of organized labor and acted forcefully to put down sev-
eral major strikes. Reflecting a growing ideological polarization
of national politics, the government imprisoned several promi-
nent communists, including the famed muralist David Alfaro
Siqueiros. Relations between labor and the government eased
somewhat in 1962, when Lopez Mateos revived a constitutional
provision that called for labor to share in the profits of large

Following Cardenas’s example, Lopez Mateos restored a
strongly nationalist tone to Mexican foreign policy, albeit not
with the fervor that had characterized his populist predecessor.
In 1960 the government began to buy foreign utility conces-
sions (as opposed to expropriating them, as Cardenas had
done). Some of the larger companies bought were Electric
Industries (Impulsora de Empresas Electricas) (from the Amer-
ican and Foreign Power Company of the United States), Mexi-
can Light and Power Company (from a Belgian firm), and
Mexican Electric Company (Industria Electrica Mexicana)
(from the United States-based California Power Company).
The film industry, previously owned by United States firms, was
also brought under Mexican control. Mexican nationalism was
most evident in its response to United States-led efforts to iso-
late the communist regime of Fidel Castro Ruz in Cuba. Alone
among the members of the Organization of American States
(OAS), Mexico refused to break diplomatic relations with
Cuba or to observe the hemispheric embargo of the island
approved at the OAS’s Punta del Este Conference in 1962 (see
Foreign Relations, ch. 4).


Mexico: A Country Study

Authoritarianism Unveiled, 1964-70

By choosing his minister of interior, Gustavo Diaz Ordaz, to
succeed him, Lopez Mateos yielded to growing concerns within
the PRI about maintaining internal order and spurring eco-
nomic growth. As government minister, Diaz Ordaz had been
responsible for some very controversial policy decisions,
including the arrest of Siqueiros, the violent suppression of sev-
eral strikes, and the annulment of local elections in Baja Cali-
fornia Sur, in which the PAN had received most of the votes.

Business interests once again received priority, and students
and labor were kept under control so as not to disrupt eco-
nomic growth. Antigovernment protests reached unprece-
dented proportions, however, in the demonstrations of the
summer of 1968, just prior to the Summer Olympic Games that
were to be held in Mexico City in October. From July through
October, academic life in the city and throughout Mexico was
halted as students rioted. The antigovernment demonstrations
were ignited by student grievances, but many discontented sec-
tors of society joined the students.

As the Olympic Games approached, the PRI and Diaz Ordaz
were preparing the country to show foreign visitors that
Mexico was politically stable and economically sound. Student
unrest grew louder and more violent, however. Student
demands included freedom for all political prisoners, dismissal
of the police chief, disbanding of the antiriot police, guaran-
tees of university autonomy, and the repeal of the “law of social
dissolution” (regulating the punishment of acts of subversion,
treason, and disorder). Luis Echeverna Alvarez, the new inte-
rior minister, agreed to discuss the issues with the students but
changed his mind when they demanded that the meeting be
televised. The students, their demands unmet, escalated the
scale and frequency of their protests. In late August, they con-
vened the largest antigovernment demonstration to date, rally-
ing an estimated 500,000 protesters in the main plaza of the
capital. Seeking to bring a halt to the demonstrations, Diaz
Ordaz ordered the army to take control of UNAM and to arrest
the student movement leaders.

To show that they had not been silenced, the students called
for another rally at the Plaza of the Three Cultures in Mexico
City’s Tlatelolco district. On October 2, 1968, a crowd of about
5,000 convened on the plaza in defiance of the government
crackdown. Armed military units and tanks arrived on the
scene and surrounded the demonstrators, while military heli-


Historical Setting

copters hovered menacingly overhead. The helicopters began
to agitate the crowd by dropping flares into the densely packed
gathering. Shortly thereafter, shots rang out (according to
some accounts, the shooting was started by the military, while
others claim the first shots were fired at soldiers by antigovern-
ment snipers in the surrounding buildings). The panicked
crowd suddenly surged toward the military cordon, which
reacted by shooting and bayoneting indiscriminately into the
crowd. Estimates of the number of people killed ranged from
several dozen to more than 400. Despite the violence, the
Olympic Games proceeded on schedule. However, the Tlate-
lolco massacre had a profound and lasting negative effect on
the PRI’s public image. The authoritarian aspects of the politi-
cal system had been starkly brought to the surface.

Reconciliation and Redistribution, 1970-76

Despite the groundswell of urban protest unleashed against
the government, the PRI candidate easily won the 1970 presi-
dential election. The new president, Echeverria, was expected
to continue his predecessor’s policies. Contrary to expecta-
tions, however, once in office Echeverria swung the ideological
pendulum of the regime back to the left. The government
embarked on an ambitious public relations campaign to regain
the loyalty of leftist intellectuals and the young. To solidify the
support of its core labor and agrarian constituencies, the PRI
also launched a barrage of social welfare programs.

Echeverria was determined to coopt the dissatisfied ele-
ments of the middle class that had become radicalized during
the 1960s. Government patronage became an important mech-
anism of rapprochement. Thousands of intellectuals and
young leftists were given posts in the government’s bloated
bureaucracy, and prominent student leaders were brought into
the president’s cabinet. To attract support from the young —
who now represented a majority of the population — Echeverria
lowered the voting age to eighteen, and the ages for election to
the Senate and Chamber of Deputies to thirty and twenty-one,
respectively. In addition, he freed most of the demonstrators
arrested during the raid on UNAM and the Tlatelolco massa-

Despite his aversion to domestic communist movements,
Echeverria became a champion of leftist causes in Latin Amer-
ica. He was a strong advocate of the proposed “new interna-
tional economic order” to redistribute power and wealth more


Mexico: A Country Study

equitably between the industrialized countries and the devel-
oping world. Demonstrating his independence from the
United States, Echeverna became only the second Latin Amer-
ican head of state to visit Castro’s Cuba. In 1974 he warmly
received Hortensia Allende, widow of leftist Chilean president
Salvador Allende Gossens, as a political refugee from Chile’s
right-wing military dictatorship.

In domestic economic affairs, the Echeverna administration
ended the policies of stabilizing development that had been
pursued since the early 1950s. Echeverna abandoned Mexico’s
commitment to growth with low inflation and undertook
instead to stimulate the economy and redistribute wealth
through massive public-spending programs. The new policy of
“shared development” was premised on heavy state investment
in the economy and the promotion of consumption and social
welfare for the middle and lower classes.

The focus of Echeverna’s social welfare policies was the Mex-
ican countryside. Despite ample evidence that the ejidos were
less efficient than private farming, Echeverna resumed the
redistribution of land to ejidos and expanded credit subsidies to
cooperative agriculture. The government also pursued an
extensive program of rural development that increased the
number of schools and health clinics in rural communities. By
refusing to defend rural property owners from squatters, the
Echeverna government encouraged a wave of land invasions
that reduced land pressure in the countryside but seriously
undermined investor confidence.

In addition to providing broad subsidies for agriculture, the
government embarked on several costly infrastructure projects,
such as the US$1 billion Lazaro Cardenas-Las Truchas Steel
Plant (Sicartsa) steel complex in Michoacan state. State subsi-
dies to stimulate private and parastatal (see Glossary) invest-
ment grew from 16 billion pesos (US$1.2 billion) in 1970 to
428 billion pesos (US$18.6 billion) by 1980. Although this type
of spending generated high economic growth throughout the
1970s, much of the money was either wasted in unnecessary
and inefficient projects or lost to corruption. The government
relied heavily on deficit spending to finance its domestic pro-
grams, incurring heavy debt obligations with foreign creditors
to make up the shortfall in public revenues.

Under Echeverna, the historically uneasy relationship
between the PRI and the national business community took a
sharp turn for the worse. Echeverna’s antibusiness rhetoric and


Historical Setting

the government’s interference in the economy deterred new
foreign and domestic investment. Although the government
avoided full-scale expropriations, it increased the state’s role in
the economy by buying out private shareholders and assuming
control of hundreds of domestic enterprises. By the end of
Echeverria’s term, the government owned significant shares in
more than 1,000 corporations nationwide.

Despite warning signs of a looming financial crisis, deficit
spending continued unabated throughout Echeverria’s sexenio.
The public sector’s foreign debt rose by 450 percent to
US$19.6 billion in six years, while the peso was allowed to
become overvalued. By the end of his sexenio, Echeverria was
facing the consequences of his administration’s unrestrained
spending. In August 1976, mounting currency speculation,
large-scale capital flight, and lack of confidence in Mexico’s
ability to meet its debt repayment schedule forced the govern-
ment to devalue the peso for the first time since 1954. The out-
going president bequeathed to his successor, Jose Lopez
Portillo y Pacheco, an economy in recession and burdened by
severe structural imbalances. The only bright spot in an other-
wise bleak economic picture was the discovery in the mid-1970s
of vast reserves of oil under the Bahia de Campeche and in the
states of Chiapas and Tabasco.

Recovery and Relapse, 1 976-82

President Lopez Portillo was inaugurated on December 1,
1976, amid a political and economic crisis inherited from the
previous administration. A rising foreign debt and inflation
rate, a 55 percent currency devaluation, and a general climate
of economic uncertainty that had spurred capital flight
plagued the economy. The new administration also faced a
general lack of confidence in government institutions. Unex-
pected help arrived as a result of the confirmation of the large
oil reserves. The Mexican government chose to follow a policy
of increasing oil production only gradually to prevent an infla-
tionary spiral that would disrupt economic recovery. Neverthe-
less, by 1981 Mexico had become the fourth largest producer
of oil in the world, its production having tripled between 1976
and 1982. While production increased, so did the price per
barrel of crude oil.

The immense revenues generated by oil exports during the
administration of Lopez Portillo gave Mexico a greater degree
of confidence in international affairs, particularly in its ever


Mexico: A Country Study

important relations with the United States. The government,
for example, refused to participate in the United States-led
boycott of the 1980 Summer Olympic Games in Moscow. When
the two countries could not agree on the price of natural gas,
Mexico flared its excess resources rather than sell to the United
States below its asking price. Also in defiance of United States
wishes, Mexico recognized the Farabundo Marti National Lib-
eration Front rebels in El Salvador as a representative political
force. These steps occurred although the United States
remained Mexico’s major oil customer and its major source of
investment capital (see Petroleum, ch. 3; Foreign Relations, ch.

As in so many developing countries, oil did not solve all of
Mexico’s problems, however. The oil industry grew rapidly but
could not employ the ever-increasing ranks of the unskilled.
Oil made Mexico a rich nation in which a majority of the peo-
ple continued to live in poverty. Foreign banks and the interna-
tional lending agencies, seeing Mexico as a secure investment
with abundant energy resources, flooded the country with
loans that kept the peso overvalued.

“The Crisis” Begins, 1982

Although its effects rippled through every aspect of national
life, the roots of what came to be known simply as “the crisis”
were exclusively economic. The roots of the crisis lay in the oil
boom of the late 1970s. Oil prices rose sharply at a time when
oil exploration in Mexico was at a peak. The nation found itself
awash in petrodollars. Its infrastructure, barely adequate
before the boom, was overwhelmed by the influx of imported
goods that followed Mexico’s rising foreign exchange reserves
and the overvalued peso. Lopez Portillo promised “to trans-
form nonrenewable resources into renewable wealth.” In other
words, he vowed to invest substantial amounts of the new oil
revenue in areas and projects that would establish sustainable
economic growth. This promise went unfulfilled.

Government spending did increase substantially following
the oil boom. Little, if any, of the new spending, however, qual-
ified as productive investment. Food subsidies, long a political
necessity in Mexico, accounted for the largest single portion of
the new spending. Although impossible to quantify, many
accounts agree that the level of graft and corruption skyrock-
eted. The new money fueled a level of inflation never before
seen in modern Mexico; the inflation rate eventually surpassed


Historical Setting

100 percent annually. The Lopez Portillo administration chose
to ignore warning signs of inflation and opted instead to
increase spending.

The macroeconomic trends that preceded the crisis also dis-
played warning signs that went unheeded. Oil income rose
from 1979 to 1980. Oil exports began to crowd out other
exports; the petroleum sector accounted for 45 percent of total
exports in 1979, but dominated exports with 65.4 percent of
the total in the second quarter of 1980. Like so many other
developing nations, Mexico became a single-commodity
exporter. With almost 50 billion barrels in proven reserves
serving as collateral, Mexico also became a major international
borrower. Significant foreign borrowing began under Presi-
dent Echeverna, but it soared under Lopez Portillo. Foreign
banks proved just as shortsighted as the Mexican government,
approving large loans in the belief that oil revenue expansion
would continue over the terms of the loans, assuring repay-
ment. Hydrocarbon earnings for the period from 1977 to 1982,
US$48 billion, were almost matched by public-sector external
borrowing over the same period, which totaled US$40 billion.
By 1982 almost 45 percent of export earnings went to service
the country’s external debt.

Living standards had already begun to decline when the oil
glut hit in 1981. Although the economy grew by an average of 6
percent per year from 1977 to 1979, purchasing power over
that period dropped by 6.5 percent. By mid-1981, overproduc-
tion had softened the international oil market considerably. In
July the government announced that it needed to borrow
US$1.2 billion to compensate for lost oil revenue. The month
before, Pemex had reduced its sales price for crude oil on the
international market by US$4 per barrel. Continued high
import levels and the drop in oil exports had boosted Mexico’s
current account deficit to US$10 billion. This uncertain situa-
tion — high external debt, stagnant exports, and a devalued
currency as of February 1982 — prompted investors to pull their
money out of Mexico and seek safer havens abroad. This
action, in turn, led Lopez Portillo to nationalize the banks in
September 1982 in an effort to staunch wounds that were
largely of his own making.

Lopez Portillo left office in 1982 a discredited figure, in no
small part because the press publicized accounts of his luxuri-
ous lifestyle. The Mexican public, long-suffering and pragmatic
in political matters, found Lopez Portillo’s calls for “sacrifice”


Mexico: A Country Study

and austerity unacceptable when contrasted with his own life-

To the Brink and Back, 1982-88

The de la Madrid Sexenio, 1 982-88

When he took office in December 1982, Miguel de la Madrid
Hurtado faced domestic conditions arguably more serious than
those confronting any postrevolutionary president. The for-
eign debt had reached new heights, the gross national product
(GNP — see Glossary) was contracting rather than growing,
inflation had hit 100 percent annually, and the peso had lost 40
percent of its value. Moreover, and perhaps most critical, the
Mexican people had begun to question and criticize the system
of one-party rule that had caused this situation. Abroad, com-
mentators (including United States president Ronald W.
Reagan) speculated as to the potential for revolutionary
upheaval in what had been considered a stable, if not demo-
cratic, southern neighbor. Some Mexicans shared this concern.
The government and most in the PRI, de la Madrid included,
believed that they could continue to hold power by keeping the
people well fed and reversing economic trends.

Hand-picked by Lopez Portillo, de la Madrid inherited the
former president’s economic mismanagement and that of sev-
eral of his predecessors. Lack of fiscal restraint, encouraged by
a sudden flood of oil wealth, lay at the root of the crisis. Over-
printing of the peso cheapened the currency, fed inflation, and
exacerbated rather than cured the economic sins that
prompted it. And corruption, the traditional parasite of eco-
nomic vitality in Mexico, made its contribution to the crash.

Although weak compared with earlier presidents, de la
Madrid still wielded formidable power in both the economic
and political arenas. The day of his inauguration, he recog-
nized the nation’s “emergency situation” by instituting a sweep-
ing program of economic austerity measures. The ten-point
program included federal budget cuts, new taxes, price
increases on some previously subsidized items, postponement
of many scheduled public works projects, increases in some
interest rates, and the relaxation of foreign- exchange controls
enacted during the waning days of the Lopez Portillo adminis-
tration. Aside from its anticipated adverse impact on the stan-
dard of living, many Mexicans resented the program for other
reasons. Nationalists saw the measures as inspired and all but


Historical Setting

imposed by the International Monetary Fund (IMF — see Glos-
sary), which reportedly had taken a hard line in debt talks with
the government. Others resented the austerity edicts because
they believed that the government and the PRI had brought
the nation to the brink of ruin, but that the people would have
to bear the burden of official incompetence.

The sudden reversal of a long trend of steady economic
growth in Mexico threw the political system into turmoil,
undermined the authority of the PRI, and raised the already
high levels of popular skepticism. Economic austerity exacer-
bated the elitist aspect of the populist authoritarian system that
developed after the Revolution. Conditions such as inflation,
devaluation, and the withdrawal of subsidies hit the poor hard-
est. The wealthy found ways to insulate themselves from such
developments; as a result, the rich grew richer. This was true
both within the private sector and among the bureaucracy. In
addition to the schism between the poor and the rich, the crisis
and its impact on the PRI’s authority sharpened the long-
standing dichotomy between central and southern Mexico and
the north. The immediate political beneficiary of the crisis was
the PAN, a conservative, probusiness party with its roots in the
northern border states.

To counteract the ferment, the government decided to allow
some opening of the political system — enough to provide a
safety valve for public discontent — but not enough to threaten
the PRI’s control, a balance difficult to attain. The first volley in
the campaign against the PRI and its policies came with the
elections of July 3, 1983. Although the PRI took a large major-
ity of municipal and state legislative races in five northern
states, the PAN captured an unprecedented nine mayoralties
and registered gains in all five state legislatures.

In addition to the economic and political arenas, de la
Madrid sought to exert influence in the area of ethics. Early in
his administration, the president announced a program of
“moral renewal.” Despite its high-minded rhetoric, the pro-
gram never enacted major legislation to discourage corrupt
practices. One exception was a new rule that eliminated gov-
ernment subcontracting, a device that union leaders often
used to earn kickbacks from contractors. In addition to institut-
ing this new rule, the moral renewal campaign chose to make
examples of a handful of corrupt officials, including former
Pemex director Jorge Diaz Serrano and former Mexico City


Mexico: A Country Study

police chief Arturo Durazo Moreno, both of whom served
prison sentences for illegal personal gain.

The United States and the Crisis in Mexico

Historically, United States relations with Mexico have fol-
lowed a reactive pattern of neglect, activism, and intervention.
The crisis of the 1980s, which appeared to threaten the long-
standing stability of Mexico, triggered a new period of activist
attention to its southern neighbor by the United States. The
prospect of an economically overextended Mexico defaulting
on US$100 billion in foreign loans caused alarm in Washington
and throughout the industrialized world. The possibility of
resulting political upheaval was particularly worrying to the
United States. As a result, other lesser issues between the two
countries — migration, drugs, environmental concerns, invest-
ment, and trade — received increased attention.

United States president Reagan, a former governor of Cali-
fornia, brought to the White House an appreciation of the
importance of the relationship between the two countries.
Reagan met with President Lopez Portillo in Ciudad Juarez on
January 5, 1981, becoming the first United States president-
elect to visit Mexico. One of the topics that the two leaders dis-
cussed in Ciudad Juarez was the political crisis in Central Amer-
ica, where the leftist Sandinista National Liberation Front
(Frente Sandinista de Liberacion Nacional — FSLN), also
known as Sandinistas (see Glossary), held power in Nicaragua
and supported guerrilla movements in El Salvador and Guate-
mala. Lopez Portillo reportedly cautioned Reagan, a conserva-
tive who had strongly condemned the Nicaraguan government,
regarding United States intervention in the region. At this
time, Mexico considered Central America, particularly Guate-
mala, to lie within its geopolitical sphere of influence. Mexican
policy, since the victory of the FSLN in 1979, had sought to pro-
vide an alternative to United States, Cuban, or Soviet influence
on the isthmus. This Mexican strategy, however, eventually
failed because Cuban influence on the Nicaraguan Sandinistas
was rooted in years of clandestine support for the revolutionary

The United States, however, rejected Mexico’s conciliatory
approach to Central American affairs in favor of military sup-
port to friendly governments, such as those in El Salvador and
Honduras, and the even more controversial policy of backing
anti-Sandinista guerrilla forces. After the economic crisis of


Historical Setting

1982, Mexico lost much of its influence in Central America.
Mexican governments, in turn, also became more guarded in
their criticism of United States policy in order to assure Wash-
ington’s support in financial forums such as the World Bank
(see Glossary) and the IMF.

Although the two nations did not always agree on the best
strategy for dealing with Mexico’s burgeoning foreign debt, the
United States government continued to work with the Mexi-
cans and support efforts to buoy the Mexican economy and
reschedule the debt. Washington announced the first of several
debt relief agreements in August 1982. Under the terms of the
agreement, the United States purchased ahead of schedule
some US$600 million in Mexican crude oil for its strategic oil
reserve; the United States treasury also provided US$1 billion
in guarantees for new commercial bank loans to Mexico. Pri-
vately, United States officials reportedly pressured commercial
banks to postpone a US$10 billion principal payment that fell
due that same month.

A bank advisory group representing 530 foreign creditors
reached an accord with Mexico in late August 1984. The
rescheduling agreement allowed Mexico to repay its foreign
debt over a term of fourteen years at interest rates lower than
those originally contracted. United States Federal Reserve
Board Chairman Paul A. Volcker, among others, had pushed
for the interest rate reduction, in part as recognition of
Mexico’s having instituted difficult austerity measures and
needing some fiscal relief in order to restore economic growth.

Other concerns meanwhile strained the Mexican-United
States relationship. Perhaps the most dramatic was drug traf-
ficking. The consumption of cocaine rose steadily in the
United States during the late 1970s and early 1980s, becoming
a major law enforcement and public health problem. Mexico
has never been a major producer of cocaine. Geography, how-
ever, made Mexico a conduit for the transshipment of cocaine
hydrochloride from South America to the United States. Diffi-
cult terrain; sparse population in many rural areas; an ade-
quate infrastructure for transporting goods by land, sea, and
air; and the relative ease of bribing both local and federal offi-
cials all lured drug traffickers to use Mexico as a conduit.

Eventually, an isolated incident came to symbolize Mexican
drug corruption and the friction between the two nations on
the issue of drug trafficking. The United States Drug Enforce-
ment Administration (DEA) maintained a comparatively large


Mexico: A Country Study

presence in Mexico. One of its resident offices operated out of
the consulate in Guadalajara. In March 1985, Mexican authori-
ties unearthed the body of DEA special agent Enrique Cama-
rena on a ranch in Michoacan state, some 100 kilometers from
Guadalajara. Mexican drug traffickers, reports later revealed,
had tortured Camarena to death, perhaps in retaliation for his
discovery of a major marijuana cultivation operation. Initial
protest from the United States government brought little or no
response from Mexican officials. As a result, the United States
Customs Service closed nine lesser points of entry from Mexico
to the United States and began searching every vehicle that
passed northward. The resultant traffic backups, complaints,
and economic losses infuriated the Mexican government. Mex-
icans claimed that the appearance of their inaction stemmed
from misperceptions of the Mexican legal system, not from
efforts to protect drug traffickers.

Despite the eventual arrest of a key suspect in the Camarena
murder, relations between the United States and Mexico on
the drug issue followed a rocky course. On April 14 and 15,
1985, United States Attorney General Edwin Meese III met with
his Mexican counterpart, Sergio Garcia Ramirez. The two
agreed to closer monitoring of the two nations’ joint counter-
drug programs. The Camarena case, however, continued to
cast a pall over these efforts. Leaked information from the
United States Department of State and from law enforcement
agencies indicated that Mexican authorities had made only
token efforts against drug production and trafficking. Accord-
ing to Department of State figures, by the end of 1985, Mexico
was the largest exporter of marijuana and heroin to the United
States. Efforts at eradicating these crops had failed abysmally,
and output in 1985 exceeded 1984 levels.

As controversy continued over Mexican drug policy, United
States politics forced another bilateral issue to the fore. The
United States had made sporadic efforts over the years to exert
greater control over its porous southern border. Mexican and
Central American illegal immigrants crossed the border almost
at will to seek low-paid jobs. Organized labor, among others,
urged the United States Congress to act. This pressure, based
on the belief that illegal aliens took large numbers of jobs that
United States citizens might otherwise fill, gave impetus to the
Simpson-Rodino bill of 1986. The bill’s two major provisions
constituted a carrot and a stick for illegal immigrants. The car-
rot came in the form of an amnesty for all undocumented resi-


Historical Setting

dents who could prove continuous residence in the United
States since January 1, 1982. The suck imposed legal sanctions
on employers of illegal aliens, an unprecedented attempt to
deter migrants indirectly by denying them employment.

The Simpson-Rodino bill, which became law as the United
States Immigration Reform and Control Act of 1986, repre-
sented the most serious effort to date to reduce illegal Mexican
immigration. Northern migration had provided an economic
safety valve from the Mexican economy’s chronic inability to
produce sufficient employment. Many Mexicans resented the
timing of this new law, which came in the midst of severe eco-
nomic distress in Mexico and relative prosperity in the United
States. Although the level of migration dropped immediately
after passage of the law, joblessness and poverty eventually
drove the number of illegal migrants up again.

Despite the irritants of drug trafficking and migration, the
United States concern for stability in Mexico led both coun-
tries to continue the search for a solution to Mexico’s crushing
debt burden. By the end of 1987, the United States govern-
ment publicly recognized that Mexico could not “grow its way
out” of the debt merely by stretching out payments and invest-
ing more borrowed funds. Acknowledging that some portion
of the debt would never be repaid, the Department of the Trea-
sury offered to issue zero-coupon bonds that would allow
Mexico to buy back its debt at a discount (see 1982 Crisis and
Recovery, ch. 3). Although not a panacea, the plan represented
a new approach to the debt problem, one that helped to
improve Mexican public opinion of the United States.

Economic Hardship

While the Mexican government, with assistance from the
United States, struggled to improve its status in the world
financial community, conditions at home remained unsettled.
After the GNP contracted by 5 percent in 1983, Mexican opti-
mism surged briefly in 1984, when the economy posted a 3.5
percent growth rate. The next year hope faded as the economy
contracted by 1 percent.

A major natural disaster in 1985 further depressed the eco-
nomic situation. In mid-September, central Mexico experi-
enced two major earthquakes. Between 5,000 and 10,000
people died as a result, and some 300,000 lost their homes. The
cost of relief and reconstruction placed a heavy burden on an
already struggling nation. The de la Madrid administration suc-


Mexico: A Country Study

cessfully cited the earthquakes as negotiating points in its
efforts to obtain better terms from its creditors.

In the political arena, initial optimism also gave way to disil-
lusionment. The liberalization that appeared to have begun in
1983 ended by 1984. The ruling PRI easily swept municipal
elections in the northern cities of Mexicali and Tijuana, in
Coahuila and Sinaloa states, and in the city of Puebla. Despite
public protests alleging widespread fraud, the results stood.
The PRI easily maintained its majority in congress, but some
party leaders were concerned that of the combined vote in five
large cities — Mexico City, Guadalajara, Nezahualcoyotl,
Monterrey, and Ciudad Juarez — the PRI polled less than 45
percent. The vote in the northern cities could be seen to
reflect the traditional regional schism, but the poor showing in
the capital area and Guadalajara signaled a growing alienation
from the PRI, particularly among the middle class.

Moreover, the persistent fall in oil prices and continuing
high levels of foreign debt service forced a new round of aus-
terity measures. De la Madrid effected an additional US$465
million in federal budget cuts by reducing subsidies and gov-
ernment investments, selling more than 200 state-owned para-
statals, and placing a partial freeze on federal hiring. As the
president announced these new belt-tightening measures, he
could also point to some significant achievements. Inflation,
which had exceeded 100 percent in 1982, had declined to 60
percent annually. The public-sector deficit had also decreased
from 13.6 percent of gross domestic product (GDP — see Glos-
sary) to 6.9 percent. Although these figures fell short of the
goals prescribed by the IMF, they represented progress.

De la Madrid did not exaggerate the importance of these
positive economic indicators. In his 1986 State of the Nation
address, he declared that “our austerity effort is permanent”
and vowed again not to deviate from his economic course. Just
months before, his administration had reached a precedent-
setting agreement with the IMF in which the amount of new
loans to Mexico would be tied to fluctuations in the world price
of crude oil. But the crisis was far from over.

Carlos Salinas de Gortari: Economic Liberalization,
Political Indecision

The Passing of the Torch, 1 987-88

The year 1987 in Mexico was the last full year of de la


Historical Setting

Madrid’s presidential term. In both economic and political
terms, de la Madrid’s last months in office proved tumultuous.
Economically, the administration’s failure to restore sustain-
able growth rates produced a new flare-up. On November 18,
1987, the government recognized the overvalue of the peso
and announced that the national currency would be allowed to
float on the free exchange market. The free float produced an
overnight devaluation of 18 percent; devaluation in turn reig-
nited inflation, which jumped to 144 percent on an annual
basis. To avoid an economic disaster, de la Madrid mandated
the Economic Solidarity Pact among government, business,
and labor to control both prices and wages. Although the gov-
ernment had always exercised immense influence over the
economy, wage and price controls of this scope were unheard
of. Their implementation by a president who had made sincere
but ineffective efforts to liberalize the economy demonstrated
both de la Madrid’s frustration and his determination to avoid
personal blame for the intractable crisis.

The man who inherited this unenviable legacy was a forty-
year-old economist with wide experience in the Mexican
bureaucracy. Carlos Salinas de Gortari was de la Madrid’s minis-
ter of budget and planning when the president decided that
Salinas was best qualified to assume the helm of state. The
selection of Salinas appeared calculated to signal the continua-
tion of de la Madrid’s austere economic policies, which were
largely shaped by Salinas. A Harvard-educated Ph.D., Salinas
was a tecnico, a competent technocrat with little or no grassroots
political experience. Technically, he was highly qualified to
deal with the nation’s problems. Politically, however, he had to
define himself on the campaign trail.

Although throughout his administration de la Madrid had
publicly vowed to promote political reform, this promise was
not realized. De la Madrid’s failure to open up the political sys-
tem to genuine competition dashed the expectations of Mexi-
cans both within and outside the ruling party. As a result some
disaffected PRI members chose to establish the Democratic
Current (Corriente Democratico — CD) within the party in
October 1986.

The CD leaders were Porfirio Munoz Ledo, a former chair-
man of the PRI, and Cuauhtemoc Cardenas, former governor
of Michoacan state and son of president Cardenas. The pri-
mary issue binding the faction members together was the
exclusionary nature of party-nominating procedures. They par-


Mexico: A Country Study

ticularly condemned the practice of the dedazo, whereby the sit-
ting president chooses his successor, who is then declared the
party’s candidate by acclamation. In addition, CD members
and their sympathizers also objected to de la Madrid’s austere
economic policies on nationalistic grounds. The president,
they believed, had mortgaged the national patrimony to for-
eigners. Such policies, these dissidents claimed, resulted from
the noncompetitive nomination of tecnico presidents who had
no feeling for the plight of the average Mexican.

The CD did not find a receptive audience for its message
within the PRI. At the party’s national assembly in March 1987,
party president Jorge de la Vega condemned the CD, recom-
mending that those who could not abide by the party’s rules
should resign. Months later, the PRI leadership formally “con-
demned, rejected, and denounced” Muhoz and Cardenas, ren-
dering them persona non grata within their own party.

Ostracized by his former party members, Cardenas declared
himself an independent candidate for president on July 3,
1987. Backed by a coalition of leftist parties that eventually
dubbed itself the National Democratic Front (Frente
Democratico Nacional — FDN), Cardenas advocated a “return
to the original principles of the Mexican Revolution.” The can-
didate’s familial heritage infused this message with legitimacy
and had considerable emotional appeal for the Mexican voter.
Nationalistic policy prescriptions, such as repudiation of the
foreign debt and the redistribution of oil exports away from
the United States, appealed to the poor, whose lives had clearly
not improved under de la Madrid’s administration. Like most
Mexicans, Cardenas was mestizo. The prospect of rule by some-
one other than an elite, light-skinned tecnico further added to
Cardenas’s appeal.

Many in the PRI recognized the threat posed by Cardenas’s
candidacy. In response, the party leadership attempted to make
it appear that the presidential nominating process had been
made more pluralistic. On August 14, 1987, de la Vega
announced a list of six candidates for the nomination, includ-
ing Salinas, but not Cardenas. The convention formally nomi-
nated Salinas on October 4, 1987. Salinas began his campaign
having to defend unpopular policies against a popular rival at a
time when his party’s solidarity and influence were in question.
Despite Salinas’s pronouncements mandating electoral probity,
the July 1988 elections appeared to most observers to be fraud-
ulent. The most serious incidents were the deaths of two key


Historical Setting

aides to Cardenas, Xavier Ovando and Roman Gil, which were
never adequately explained.

Post-election reports by outside observers and voter inter-
views indicated that much of the rural vote experienced some
degree of tampering; the FDN and the PAN had insufficient
observers to monitor such elections. After much delay, the elec-
tion commission declared Salinas the winner on July 13, 1988.
The surprise was the total number of votes for the victor —
50.36 percent. The low total, which itself spoke of manipula-
tion, demonstrated the people’s disaffection with the PRI.

President Salinas

The 1988 election did not end Salinas’s struggle to succeed
his mentor, de la Madrid. Cardenas rejected the Electoral Com-
mission’s results, which showed him with 31.1 percent of the
national vote. On July 17, 1988, Cardenas addressed a rally of
some 200,000 in Mexico City, in an effort to force a recount.
Eventually, along with the PAN candidate Manuel Clouthier,
the two opposition candidates united to demand that the elec-
tions be nullified and an interim president appointed.

On August 15, 1988, the National Congress, sitting as the
electoral college, met to ratify the presidential vote. Cardenas
filed criminal charges against Minister of Interior Manuel Bar-
tlett Diaz, who also served as head of the Federal Electoral
Commission. Despite an August 15 rally by the FDN and the
PAN, nationwide protests never materialized; the electoral col-
lege ratified Salinas’s victory as expected.

Meanwhile, during his final months in office, de la Madrid
sought to maintain the economy on an even keel for his succes-
sor. On August 15, 1988, the government extended the wage
and price freeze through November 30, the end of de la
Madrid’s term. The freeze had done what had been expected —
it had reduced inflation from 15.5 percent in January to 1 per-
cent in August. To ease the burden somewhat on the poor, the
administration also eliminated a 6 percent value-added tax on
basic foodstuffs and medicine and decreed a 30 percent tax cut
for low-income workers. The exchange rate of the peso to the
dollar remained fixed at the 2,270-to-l level established in
December 1987.

On October 17, 1988, the United States government
announced a US$3.5 billion loan to Mexico to help ease the
revenue shortfall resulting from the continued drop in oil
prices. The loan was considered a bridge loan to tide Mexico


Mexico: A Country Study

over until it could reach agreement with the IMF and the
World Bank. Many observers considered the United States
action to have been prompted more by political concerns than
economic ones. From 1982 to 1988, real income in Mexico had
fallen by 40 percent; inflation had reached almost 160 percent
annually, privatization efforts had eliminated thousands of jobs
that had not yet been replaced by the private sector, and the
economy had contracted more than it had grown. In late April
1988, candidate Salinas visited the United States to sound out
both United States presidential candidates George H.W. Bush
and Michael Dukakis and to visit with members of the United
States Congress, interest groups, the press, academics, and
influential Mexican-Americans. Even before his election, it was
clear that Salinas set great store on productive relations with
Mexico’s northern neighbor. The October loan may have been
one result of his efforts.

Salinas took office on December 1, 1988. In preinaugural
interviews, he promised the “political, economic, and cultural
modernization” of Mexico and an improvement in Mexico’s
standing abroad. During the inaugural ceremony, Cardenas’s
supporters walked out in protest; PAN members protested
silently throughout. In his speech, Salinas stressed the impor-
tance of a sound economy to the nation’s future. The debt, he
claimed, was the primary problem in this regard. He urged fur-
ther renegotiation, “no longer to pay, but to return to growth.”
Salinas, however, had no intention of reneging on any portion
of the debt. The new president also promised further political

Salinas made the economy his first priority. On December
12, 1988, he ended the wage, price, and exchange-rate freeze
instituted under de la Madrid. In its place, the new president
advocated price restraint, a modest wage increase, and a sched-
uled devaluation averaging one peso per day against the dollar.
Salinas endorsed de la Madrid’s efforts for Mexico’s entry into
the General Agreement on Tariffs and Trade (GATT),
although imports had risen and foreign reserves had dwindled
since membership had first been proposed. Salinas privately
held that Mexico must open and integrate itself more exten-
sively into the world economy in order to progress and meet
the employment needs of a burgeoning young population.
Over the short term, however, he admitted that 1989 would be
a “year of transition,” with little overall economic growth.


Historical Setting

Initially, Salinas hoped to diversify Mexico’s markets by
expanding trade with the industrialized nations of Europe and
perhaps with Japan. A state tour of Europe and other contacts,
however, convinced him that this hope was illusory. Geography,
history, infrastructure, investment, financial ties, and other fac-
tors made the United States the arbiter of Mexican economic
progress, whether President Salinas liked it or not. Accordingly,
Salinas began to develop a notion that he had first proposed to
United States president-elect Bush in late November 1988. The
Mexican president-elect suggested the establishment of free
trade between the two nations, as a natural extension of bilat-
eral agreements already negotiated in such areas as steel, tex-
tiles, and automobiles. Bush had promised to take the
suggestion under advisement.

In several ways, Salinas followed the pattern established by
his predecessor. He wasted little time in moving against poten-
tial political enemies in his own moral renewal campaign.
Where de la Madrid had moved quietly, however, Salinas acted
more dramatically. The corrupt leader of the oil workers
union, Joaquin Hernandez Galicia (also known as La Quina),
surrendered after a gunfight with federal police at union head-
quarters (see Petroleum, ch. 3). Subsequently, authorities took
into custody broker Eduardo Leorreta, a PRI member and
former fundraiser for the party, on charges of tax fraud.

With his political flanks covered, and having included both
tecnicos and oldtime PRI members (disparagingly nicknamed
“dinosaurs”) among his cabinet, Salinas felt secure enough to
begin his program of economic liberalization and reform. In
May 1989, he ended previous restrictions on foreign ownership
of business in Mexico and opened to foreign investment some
previously restricted areas. The president also promised to sim-
plify the bureaucratic process that often had deterred investors
in the past. The new administration also continued the process
of privatization begun under de la Madrid. The major casualty
of this process was Altos Hornos de Mexico, a state-owned steel
mill in Monclova, where 1,740 workers lost their jobs under a
foreign-financed modernization program begun in June 1989.
The previous administration had closed outright the Fundi-
dora Monterrey, another steel mill, in 1986, putting almost
13,000 out of work.

In laying the groundwork for economic liberalization, the
government announced in July 1989 that it had reached
another accord with its foreign creditors after four months of


Mexico: A Country Study

negotiations. Under the so-called Brady Plan, an approach
advocated by United States Secretary of the Treasury Nicholas
F. Brady to reduce Mexico’s debt principal, the IMF agreed to
provide US$3.5 billion over three years, US$1 billion of which
was designed to assure Mexico’s bank payments. In addition,
the World Bank was to provide US$6 billion over three years
for economic development and guarantees. The government
of Japan also provided US$2.05 billion in debt reduction loans.
Foreign creditor banks received three options: to make new
loans to Mexico, to reduce the principal by writing off some
percentage of their loans, or to cut the interest rates they
charged on Mexican loans. The net effect of the terms was to
reduce Mexico’s foreign debt payments by US$8 billion per

The debt agreement behind him, Salinas began to make
good on his promise of political reform. In the balloting of July
1989, the PRI conceded the governorship of Baja California
Norte to the candidate of the PAN. This was a historic event,
the first time that the PRI had admitted the loss of a state elec-
tion. At the same time, however, the PRI took a firm stand in
Cardenas’s home state of Michoacan, where the ruling party
claimed to have won eleven of eighteen seats in the state legis-
lature. Cardenas’s party, now known as the Democratic Revolu-
tionary Party (Partido Revolucionario Democratico — PRE)),
protested that its candidates had taken fifteen of the eighteen
seats. The PRI, they claimed, had stuffed ballot boxes.

Allegations of voting fraud aside, the United States govern-
ment, led by President Bush, was very supportive of Salinas and
his efforts, particularly in the economic arena. Salinas’s origi-
nal suggestion of a free-trade agreement received serious con-
sideration in Washington. Eventually, after the debt reduction
agreement and liberalization efforts in such areas as foreign
investment and privatization, United States officials felt that a
free-trade accord was a logical next step in opening the Mexi-
can economy and incorporating it into a North American trad-
ing bloc. Accordingly, on June 11, 1990, the two governments
agreed in principle to negotiate a “comprehensive free-trade
agreement” that would eliminate not only tariff barriers, but
also “import quotas, licenses, and technical barriers” to the free
flow of goods, services, and capital between the two nations. As
negotiations progressed, the treaty would become known as
the North American Free Trade Agreement (NAFTA) (see
Trade Agreements, ch. 3) . The agreement fit logically into Sali-


Historical Setting

nas’s vision of a modernizing Mexico, at least in an economic
sense. In 1992 NAFTA was approved by the legislatures of
Mexico, the United States, and Canada to take effect on Janu-
ary 1, 1994.

With the president’s support, congress passed modest politi-
cal reforms during the last half of Salinas’s term. In 1992 con-
stitutional restrictions on the Roman Catholic Church were
repealed (see Church-State Relations, ch. 2). The following
year, congress passed a package of electoral reforms, including
limits on campaign financing, expansion of the Senate to allow
a third minority-party senator from each state, and increased
proportional representation in the Chamber of Deputies (see
The Salinas Presidency: Reform and Retrenchment, ch. 4).

As in previous sexenios, the last year of the Salinas administra-
tion was a time of crisis. On January 1, 1994, the Zapatista Army
of National Liberation (Ejercito Zapatista de Liberation Nacio-
nal — EZLN), a heretofore unknown group, suddenly overran
several towns in Chiapas (see National Security Concerns, ch.
5). The overwhelming military response forced the rebels into
the mountains, but the rebels’ demands for reform reminded
the country that recent economic improvements had failed to
reach many in the lower classes or in the impoverished south.

Political uncertainty increased during 1994. In March Luis
Donaldo Colosio Murrieta, the PRI presidential candidate, was
assassinated while campaigning in Tijuana. Several investiga-
tions failed to produce a motive or the existence of a conspir-
acy. Rumors circulated, however, that the assassination was
drug-related or the action of old-line PRI members opposed to
political reform. Anxious to divorce itself from a reputation of
fraud, the PRI quickly nominated reform-minded Ernesto
Zedillo Ponce de Leon as its presidential candidate. Zedillo
had been Salinas’s secretary of budget and secretary of educa-
tion and was widely perceived as someone who would continue
Salinas’s policies.

With all eyes focused on the presidential campaign and the
uprising in Chiapas, few noticed the worsening economy in
1994. A rising deficit in the current account made the economy
increasingly vulnerable to shifts in external capital flow.
Although statistics showed a healthy rise in exports, most of the
exports were goods from the border-zone maquiladora (see
Glossary) industries, with little overall benefit to the Mexican
economy or Mexican workers. In addition, rising interest rates
in the United States diverted much-needed capital from the


Mexico: A Country Study

developing world. The government was reluctant to take strin-
gent economic measures in an election year, however, and
instead issued short-term, dollar-denominated bonds to
finance government spending.

The election results of August 21, 1994, contained no sur-
prises. The PRI candidate, Zedillo, won the presidency with 49
percent of the vote. The PAN took 26 percent of the total, the
major candidate on the left garnered 16 percent, and six minor
parties accounted for the rest. Despite some irregularities,
international observers declared that the election was generally
honest, and Zedillo was inaugurated on December 1, 1994.

With the election over, attention turned to the economy.
Most economists felt that the currency was overvalued, and a
devaluation was widely anticipated. When a devaluation was
announced on December 20, however, the result was unex-
pected. Investors panicked, and large amounts of capital were
pulled out of Mexico or converted to dollars. Government
measures to stem the exodus of funds only exacerbated the
problem. Government debt rose sharply, and inflation and
interest rates soared. Only large-scale international interven-
tion stopped the downward spiral.

President Salinas had hoped that his free-market economic
policies and political reforms would bring sustained economic
growth and increased democratization. The realities of the last
years of the twentieth century differed, however. The Mexican
economy suffered one of its worst downturns since the Great
Depression of the 1930s. The PRI’s lessening grip on power led
not to stability but to an era of increased political and social
turmoil. As so often in Mexico’s past, in the late 1990s democ-
racy and prosperity remained only tantalizing goals.

* * *

An enormous wealth of historical literature exists on
Mexico. Both Mexican and foreign historians have produced
analyses of the developments leading to the country’s position
in contemporary Latin America. The most useful standard his-
tories of Mexico are Henry Bamford Parkes’s A History of
Mexico, Charles C. Cumberland’s Mexico: The Struggle for Moder-
nity, Frank Tannenbaum’s Mexico: The Struggle for Peace and
Bread, and Jan S. Bazant’s A Concise History of Mexico. Although
now slightly dated, the most complete and best researched gen-
eral historical analysis available in English is Michael C. Meyer


Historical Setting

and William L. Sherman’s The Course of Mexican History, a com-
prehensive book that presents Mexican history from precon-
quest times to the inauguration of President de la Madrid in

For the study of pre-Columbian peoples and their origins,
Eric R. Wolfs Sons of the Shaking Earth and Michael D. Coe’s
Mexico are extremely useful. The Aztec traditions and belief sys-
tem are also well researched and artfully presented in Jose
Lopez Portillo’s Quetzalcdatl. The classic work of Bernal Diaz
del Castillo, The Discovery and Conquest of Mexico, 1517-1521,
remains one of the best sources of information about the
arrival of the Spaniards in Mexico and the victory over the

For the colonial period, useful studies are Clarence Henry
Haring’s The Spanish Empire in America, Charles Gibson’s Spain
in America, Francois Chevalier’s Land and Society in Colonial
Mexico, William B. Taylor’s Landlord and Peasant in Colonial
Oaxaca, and James Lockhart and Stuart B. Schwartz’s Early
Latin America. The struggle for independence and the Mexican
Revolution are the best researched subjects. Aside from the
general works already cited, useful sources include W. Dirk
Raat’s Mexico: From Independence to Revolution, 1810-1910, Victor
Alba’s The Mexicans: The Making of a Nation, Jesus Romero
Flores’s La revolucion mexicana (anales historicos, 1910-1974) ,
John Womackjr.’s classic Zapata and the Mexican Revolution, and
many more.

For the modern period, the following sources are helpful:
Thomas G. Sanders’s Mexico in the 70s, Howard F. Cline’s Mexico:
Revolution to Evolution, 1940-1960, Fernando Benitez’s Ldzaro
Cardenas y la revolucion mexicana (three volumes), Frank R.
Brandenburg’s The Making of Modern Mexico, Jaime Castrejon
Diaz’s La republica imperial en los 80s, Kenneth F. Johnson’s Mexi-
can Democracy, Dan Hofstadter’s Mexico, 1946-73, and the arti-
cles published in the Mexican Forum. (For further information
and complete citations, see Bibliography.)


Chapter 2. The Society and Its Environment

A representation of a Mexican mother and children from a painting by
David Alfaro Siqueiros

ing the second half of the twentieth century. A sharp decline in
mortality levels, coupled with fertility rates that remained rela-
tively high until the mid-1970s, produced a massive population
increase. Indeed, the 1990 census total of approximately 81
million Mexicans was more than triple the figure recorded
forty years earlier. Mexico’s stagnant agricultural sector could
not absorb the millions of additional workers, triggering a
steady migration to the cities. As a result, Mexico shifted from a
predominantly rural to a heavily urban society. Because of the
lack of available housing, migrants generally clustered on the
periphery of Mexico City and other major urban centers. The
local infrastructure often could not keep pace with such
growth, resulting in serious environmental concerns.

Despite the massive problems caused by the rapid popula-
tion shift, successive Mexican governments could point to nota-
ble accomplishments in improving the quality of life of their
citizens. In the years after World War II, the percentage of
deaths caused by infectious, parasitic, and respiratory illnesses
fell dramatically. Both the number and percentage of Mexicans
with access to basic services such as running water and electric-
ity grew substantially. Literacy and educational levels continued
to climb.

The benefits of modernization were not equally distributed,
however. Residents of southern Mexico consistently trailed the
rest of the country in “quality-of-life” indicators. Urban workers
in the informal sector of the economy did not have access to
the same level of health care as their counterparts in the for-
mal sector and did not qualify for retirement or pension pay-
ments. Income distribution had become increasingly skewed in
favor of the wealthiest sectors of society. Mexican policy makers
thus faced the difficult challenge of ensuring economic growth
while also confronting the persistence of poverty.

Physical Setting

Mexico’s total area covers 1,972,550 square kilometers,
including approximately 6,000 square kilometers of islands in
the Pacific Ocean, Gulf of Mexico, Caribbean Sea, and Gulf of
California (see fig. 3) . On its north, Mexico shares a 3,326-kilo-


Mexico: A Country Study

meter border with the United States. The meandering Rio
Bravo del Norte (known as the Rio Grande in the United
States) defines the border from Ciudad Juarez east to the Gulf
of Mexico. A series of natural and artificial markers delineate
the United States-Mexican border west from Ciudad Juarez to
the Pacific Ocean. On its south, Mexico shares an
871-kilometer border with Guatemala and a 251-kilometer bor-
der with Belize. Mexico has a 10,143-kilometer coastline, of
which 7,338 kilometers face the Pacific Ocean and the Gulf of
California, and the remaining 2,805 kilometers front the Gulf
of Mexico and the Caribbean Sea. Mexico’s exclusive economic
zone (EEZ), which extends 200 nautical miles off each coast,
covers approximately 2.7 million square kilometers. The land-
mass of Mexico dramatically narrows as it moves in a southeast-
erly direction from the United States border and then abruptly
curves northward before ending in the 500-kilometer-long
Yucatan Peninsula. Indeed, the capital of Yucatan State,
Merida, is farther north than Mexico City or Guadalajara.

Topography and Drainage

Two prominent mountain ranges — the Sierra Madre Occi-
dental and the Sierra Madre Oriental — define northern
Mexico. Both are extensions of ranges found in the United
States. The Sierra Madre Occidental on the west is a continua-
tion of California’s Sierra Nevada (with a break in southeastern
California and extreme northern Mexico), and the Sierra
Madre Oriental on the east is a southward extension of the
Rocky Mountains of New Mexico and Texas. Between these two
ranges lies the Mexican altiplano (high plain), a southern con-
tinuation of the Great Basin and high deserts that spread over
much of the western United States.

Beginning approximately fifty kilometers from the United
States border, the Sierra Madre Occidental extends 1,250 kilo-
meters south to the Rio Santiago, where it merges with the Cor-
dillera Neovolcanica range that runs east-west across central
Mexico. The Sierra Madre Occidental lies approximately 300
kilometers inland from the west coast of Mexico at its northern
end but approaches to within fifty kilometers of the coast near
the Cordillera Neovolcanica. The northwest coastal plain is the
name given the lowland area between the Sierra Madre Occi-
dental and the Gulf of California. The Sierra Madre Occiden-
tal averages 2,250 meters in elevation, with peaks reaching
3,000 meters.




in meters

rs ,

[300 Miles


The Society and Its Environment

The Sierra Madre Oriental starts at the Big Bend region of
the Texas-Mexico border and continues 1,350 kilometers until
reaching Cofre de Perote, one of the major peaks of the Cordi-
llera Neovolcanica. As is the case with the Sierra Madre Occi-
dental, the Sierra Madre Oriental comes progressively closer to
the coastline as it approaches its southern terminus, reaching
to within seventy-five kilometers of the Gulf of Mexico. The
northeast coastal plain extends from the eastern slope of the
Sierra Madre Oriental to the Gulf of Mexico. The median ele-
vation of the Sierra Madre Oriental is 2,200 meters, with some
peaks at 3,000 meters.

The Mexican altiplano, stretching from the United States
border to the Cordillera Neovolcanica, occupies the vast
expanse of land between the eastern and western sierra
madres. A low east-west range divides the altiplano into north-
ern and southern sections. These two sections, previously
called the Mesa del Norte and Mesa Central, are now regarded
by geographers as sections of one altiplano. The northern alti-
plano averages 1,100 meters in elevation and continues south
from the Rio Bravo del Norte through the states of Zacatecas
and San Luis Potosi. Various narrow, isolated ridges cross the
plateaus of the northern altiplano. Numerous depressions dot
the region, the largest of which is the Bolson de Mapimi. The
southern altiplano is higher than its northern counterpart,
averaging 2,000 meters in elevation. The southern altiplano
contains numerous valleys originally formed by ancient lakes.
Several of Mexico’s most prominent cities, including Mexico
City and Guadalajara, are located in the valleys of the southern

One other significant mountain range, the California sys-
tem, cuts across the landscape of the northern half of Mexico.
A southern extension of the California coastal ranges that par-
allel California’s coast, the Mexican portion of the California
system extends from the United States border to the southern
tip of the Baja Peninsula, a distance of 1,430 kilometers. Peaks
in the California system range in altitude from 2,200 meters in
the north to only 250 meters near La Paz in the south. Narrow
lowlands are found on the Pacific Ocean and the Gulf of Cali-
fornia sides of the mountains.

The Cordillera Neovolcanica is a belt 900 kilometers long
and 130 kilometers wide, extending from the Pacific Ocean to
the Gulf of Mexico. The Cordillera Neovolcanica begins at the
Rio Grande de Santiago and continues south to Colima, where


Figure 3. Topography and Drainage

Mexico: A Country Study

it turns east along the nineteenth parallel to the central por-
tion of the state of Veracruz. The region is distinguished by
considerable seismic activity and contains Mexico’s highest vol-
canic peaks. This range contains three peaks exceeding 5,000
meters: Pico de Orizaba (Citlaltepetl) — the third highest
mountain in North America — and Popocatepetl and Iztac-
cihuatl near Mexico City. The Cordillera Neovolcanica is
regarded as the geological dividing line between North Amer-
ica and Central America.

Several important mountain ranges dominate the landscape
of southern and southeastern Mexico. The Sierra Madre del
Sur extends 1,200 kilometers along Mexico’s southern coast
from the southwestern part of the Cordillera Neovolcanica to
the nearly flat isthmus of Tehuantepec. Mountains in this
range average 2,000 meters in elevation. The range averages
100 kilometers in width, but widens to 150 kilometers in the
state of Oaxaca. The narrow southwest coastal plain extends
from the Sierra Madre del Sur to the Pacific Ocean. The Sierra
Madre de Oaxaca begins at Pico de Orizaba and extends in a
southeasterly direction for 300 kilometers until reaching the
isthmus of Tehuantepec. Peaks in the Sierra Madre de Oaxaca
average 2,500 meters in elevation, with some peaks exceeding
3,000 meters. South of the isthmus of Tehuantepec, the Sierra
Madre de Chiapas runs 280 kilometers along the Pacific Coast
from the Oaxaca-Chiapas border to Mexico’s border with Gua-
temala. Although average elevation is only 1,500 meters, one
peak — Volcan de Tacuma — exceeds 4,000 meters in elevation.
Finally, the Meseta Central de Chiapas extends 250 kilometers
through the central part of Chiapas to Guatemala. The average
height of peaks of the Meseta Central de Chiapas is 2,000
meters. The Chiapas central valley separates the Meseta Cen-
tral de Chiapas and the Sierra Madre de Chiapas.

Mexico has nearly 150 rivers, two-thirds of which empty into
the Pacific Ocean and the remainder of which flow into the
Gulf of Mexico or the Caribbean Sea. Despite this apparent
abundance of water, water volume is unevenly distributed
throughout the country. Indeed, five rivers — the Usumacinta,
Grijalva, Papaloapan, Coatzacoalcos, and Panuco — account for
52 percent of Mexico’s average annual volume of surface water.
All five rivers flow into the Gulf of Mexico; only the Rio Panuco
is outside southeastern Mexico, which contains approximately
15 percent of national territory and 12 percent of the national
population. In contrast, northern and central Mexico, with 47


Pico de Orizaba in eastern Mexico
Courtesy Embassy of Mexico, Washington
Typical cactus and scrub vegetation in north-central Mexico
Courtesy Inter-American Development Bank


Mexico: A Country Study

percent of the national area and almost 60 percent of Mexico’s
population, have less than 10 percent of the country’s water

Seismic Activity

Situated atop three of the large tectonic plates that consti-
tute the earth’s surface, Mexico is one of the most seismologi-
cally active regions on earth. The motion of these plates causes
earthquakes and volcanic activity.

Most of the Mexican landmass rests on the westward moving
North American plate. The Pacific Ocean floor off southern
Mexico, however, is being carried northeast by the underlying
motion of the Cocos plate. Ocean floor material is relatively
dense; when it strikes the lighter granite of the Mexican land-
mass, the ocean floor is forced under the landmass, creating
the deep Middle American trench that lies off Mexico’s south-
ern coast. The westward moving land atop the North American
plate is slowed and crumpled where it meets the Cocos plate,
creating the mountain ranges of southern Mexico. The sub-
duction of the Cocos plate accounts for the frequency of earth-
quakes near Mexico’s southern coast. As the rocks constituting
the ocean floor are forced down, they melt, and the molten
material is forced up through weaknesses in the surface rock,
creating the volcanoes in the Cordillera Neovolcanica across
central Mexico.

Areas off Mexico’s coastline on the Gulf of California,
including the Baja California Peninsula, are riding northwest-
ward on the Pacific plate. Rather than one plate subducting,
the Pacific and North American plates grind past each other,
creating a slip fault that is the southern extension of the San
Andreas fault in California. Motion along this fault in the past
pulled Baja California away from the coast, creating the Gulf of
California. Continued motion along this fault is the source of
earthquakes in western Mexico.

Mexico has a long history of destructive earthquakes and
volcanic eruptions. In September 1985, an earthquake measur-
ing 8.1 on the Richter scale and centered in the subduction
zone off Acapulco killed more than 4,000 people in Mexico
City, more than 300 kilometers away. Volcan de Colima, south
of Guadalajara, erupted in 1994, and El Chichon, in southern
Mexico, underwent a violent eruption in 1983. Paricutin in
northwest Mexico began as puffs of smoke in a cornfield in
1943; a decade later the volcano was 2,700 meters high.


The Society and Its Environment

Although dormant for decades, Popocatepetl and Ixtaccihuatl
(“smoking warrior” and “white lady,” respectively, in Nahuatl)
occasionally send out puffs of smoke clearly visible in Mexico
City, a reminder to the capital’s inhabitants that volcanic activ-
ity is near. Popocatepetl showed renewed activity in 1995 and
1996, forcing the evacuation of several nearby villages and caus-
ing concern by seismologists and government officials about
the effect that a large-scale eruption might have on the heavily
populated region nearby.


The Tropic of Cancer effectively divides the country into
temperate and tropical zones. Land north of the twenty-fourth
parallel experiences cooler temperatures during the winter
months. South of the twenty-fourth parallel, temperatures are
fairly constant year round and vary solely as a function of eleva-

Areas south of the twentieth-fourth parallel with elevations
up to 1,000 meters (the southern parts of both coastal plains as
well as the Yucatan Peninsula), have a yearly median tempera-
ture between 24°C and 28°C. Temperatures here remain high
throughout the year, with only a 5°C difference between winter
and summer median temperatures. Although low-lying areas
north of the twentieth-fourth parallel are hot and humid dur-
ing the summer, they generally have lower yearly temperature
averages (from 20°C to 24°C) because of more moderate condi-
tions during the winter.

Between 1,000 and 2,000 meters, one encounters yearly aver-
age temperatures between 16°C and 20°C. Towns and cities at
this elevation south of the twenty-fourth parallel have relatively
constant, pleasant temperatures throughout the year, whereas
more northerly locations experience sizeable seasonal varia-
tions. Above 2,000 meters, temperatures drop as low as an aver-
age yearly range between 8°C and 12°C in the Cordillera
Neovolcanica. At 2,300 meters, Mexico City has a yearly median
temperature of 15°C with pleasant summers and mild winters.
Average daily highs and lows for May, the warmest month, are
26°C and 12°C, and average daily highs and lows for January,
the coldest month, are 19°C and 6°C.

Rainfall varies widely both by location and season. Arid or
semiarid conditions are encountered in the Baja Peninsula, the
northwestern state of Sonora, the northern altiplano, and sig-
nificant portions of the southern altiplano. Rainfall in these


Mexico: A Country Study

regions averages between 300 and 600 millimeters per year.
Average rainfall totals are between 600 and 1,000 millimeters in
most of the year in most of the major populated areas of the
southern altiplano, including Mexico City and Guadalajara.
Low-lying areas along the Gulf of Mexico receive in excess of
1,000 millimeters of rainfall in an average year, with the wettest
region being the southeastern state of Tabasco, which typically
receives approximately 2,000 millimeters of rainfall on an
annual basis. Parts of the northern altiplano and high peaks in
the Sierra Madre Occidental and the Sierra Madre Oriental
occasionally receive significant snowfalls.

Mexico has pronounced wet and dry seasons. Most of the
country experiences a rainy season from June to mid-October
and significantly less rain during the remainder of the year.
February and July generally are the driest and wettest months,
respectively. Mexico City, for example, receives an average of
only 5 millimeters of rain during February but more than 160
millimeters in July. Coastal areas, especially those along the
Gulf of Mexico, experience the largest amounts of rain in Sep-
tember. Tabasco typically records more than 300 millimeters of
rain during that month. A small coastal area of northwestern
coastal Mexico around Tijuana has a Mediterranean climate
with considerable coastal fog and a rainy season that occurs in

Mexico lies squarely within the hurricane belt, and all
regions of both coasts are susceptible to these storms from June
through November. Hurricanes on the Pacific coast are less fre-
quent and often less violent than those affecting Mexico’s east-
ern coastline. Several hurricanes per year strike the Caribbean
and Gulf of Mexico coastline, however, and these storms bring
high winds, heavy rain, extensive damage, and occasional loss
of life. Hurricane Hugo passed directly over Cancun in Sep-
tember 1989, with winds in excess of 200 kilometers per hour
producing major damage to hotels in the resort area. In Sep-
tember 1988, Hurricane Gilbert struck northeast Mexico.
Flooding from the heavy rain in that storm killed dozens in the
Monterrey area and caused extensive damage to livestock and
vegetable crops.

Environmental Conditions

Mexico faces significant environmental challenges affecting
almost every section of the country. Vast expanses of southern
and southeastern tropical forests have been denuded for


The Society and Its Environment

cattle-raising and agriculture. For example, tropical forests cov-
ered almost half of the state of Tabasco in 1940 but less than 10
percent by the late 1980s. During the same period, pastureland
increased from 20 to 60 percent of the state’s total area. Ana-
lysts reported similar conditions in other tropical sections of
Mexico. Deforestation has contributed to serious levels of soil
erosion nationwide. In 1985 the government classified almost
17 percent of all land as totally eroded, 31 percent in an accel-
erated state of erosion, and 38 percent demonstrating signs of
incipient erosion.

Soil destruction is particularly pronounced in the north and
northwest, with more than 60 percent of land considered in a
total or accelerated state of erosion. Fragile because of its semi-
arid and arid character, the soil of the region has become
increasingly damaged through excessive cattle-raising and irri-
gation with waters containing high levels of salinity. The result
is a mounting problem of desertification throughout the

Mexico’s vast coastline faces a different, but no less difficult,
series of environmental problems. For example, inadequately
regulated petroleum exploitation in the Coatzacoalcos-Minati-
tlan zone in the Gulf of Mexico has caused serious damage to
the waters and fisheries of Rio Coatzacoalcos. The deadly
explosion that racked a working-class neighborhood in Gua-
dalajara in April 1992 serves as an appropriate symbol of envi-
ronmental damage in Mexico. More than 1,000 barrels of
gasoline seeped from a corroded Mexican Petroleum (Petro-
leos Mexicanos — Pemex) pipeline into the municipal sewer sys-
tem, where it combined with gases and industrial residuals to
produce a massive explosion that killed 190 persons and
injured nearly 1,500 others.

Mexico City confronts authorities with perhaps their most
daunting environmental challenge. Geography and extreme
population levels have combined to produce one of the world’s
most polluted urban areas. Mexico City sits in a valley sur-
rounded on three sides by mountains, which serve to trap con-
taminants produced by the metropolitan area’s 15 million
residents. One government study in the late 1980s determined
that nearly 5 million tons of contaminants were emitted annu-
ally in the atmosphere, a tenfold increase over the previous
decade. Carbons and hydrocarbons from the region’s more
than 3 million vehicles account for approximately 80 percent
of these contaminants, with another 15 percent, primarily of


Mexico: A Country Study

sulfur and nitrogen, coming from industrial plants. During the
dry winter months, untreated fecal matter also becomes air-
borne. The resulting dangerous mix is responsible for a wide
range of respiratory illnesses. One study of twelve urban areas
worldwide in the mid-1980s concluded that the residents of
Mexico City had the highest levels of lead and cadmium in
their blood. The volume of pollutants from Mexico City has
damaged the surrounding ecosystem as well. For example,
wastewater from Mexico City that flows north and is used for
irrigation in the state of Hidalgo has been linked to congenital
birth defects and high levels of gastrointestinal diseases in that

Beginning in the mid-1980s, the government enacted
numerous antipollution policies in Mexico City with varied
degrees of success. Measures such as vehicle emissions inspec-
tions, the introduction of unleaded gasoline, and the installa-
tion of catalytic converters on new vehicles helped reduce
pollution generated by trucks and buses. In contrast, one of
the government’s most prominent actions, the No Driving Day
program, may have inadvertently contributed to higher pollu-
tion levels. Under the program, metropolitan area residents
were prohibited from driving their vehicles one day each work
week based on the last number of their license plate. However,
those with the resources to do so purchased additional automo-
biles to use on the day their principal vehicle was prohibited
from driving, thus adding to the region’s vehicle stock. Ther-
mal inversions reached such dangerous levels at various times
in the mid-1990s that the government declared pollution emer-
gencies, necessitating sharp temporary cutbacks in vehicle use
and industrial production.


The eleventh annual census, conducted in 1990, reported a
total Mexican population of 81,250,000. This figure repre-
sented a 2.3 percent per annum growth rate from the 1980 cen-
sus and indicated successful government efforts at slowing
down the level of population increase. The government
reported that the population stood at 91,158,000 at the end of
1995, a 1.8 percent increase over the previous year. Assuming
that this most recent level of growth were maintained through
the rest of the 1990s, Mexico’s population would stand at
approximately 100 million persons in the year 2000. A return
to the higher 1980 to 1990 growth rate, however, would result


The Society and Its Environment

in a population total of approximately 102 million persons by
the year 2000.

The pace of migration to the United States increased mark-
edly during the 1980s. One analyst, Rodolfo Corona Vazquez,
estimated that 4.4 million Mexicans resided outside the coun-
try (almost all in the United States) in 1990, roughly double
the estimated number in 1980. Corona Vazquez also noted a
changing pattern of emigration since the 1960s. Seven contigu-
ous states in north central Mexico — -Jalisco, Michoacan, Guana-
juato, Zacatecas, Durango, San Luis Potosi, and Aguasca-
lientes — accounted for approximately 70 percent of all emi-
grants in 1960, but only 42 percent in 1990. New important
sources of emigration included Chihuahua in the northeast,
the Federal District (the administrative unit that includes
Mexico City), and the southernmost state of Oaxaca.

Notable variations exist in the country’s population density
(see fig. 4). Four states, three of them in the arid northwest,
had fewer than ten persons per square kilometer in 1990, and
another thirteen states, mostly in the north, had density levels
between ten and fifty persons per square kilometer. By con-
trast, two states clustered near the capital had densities in
excess of 200 persons per square kilometer. The rate in Mexico
City itself was approximately 5,500 persons per square kilome-
ter (see table 2, Appendix) .

The state of Mexico and the Federal District accounted for
over 22 percent of the national population in 1990. The state
of Mexico’s spectacular population growth (the state alone
accounted for more than 12 percent of national totals)
reflected the expansion of the Mexico City metropolitan area.
Almost 69 percent of the state of Mexico’s population resided
in the twenty-seven municipalities that, together with the Fed-
eral District, comprise the Mexico City metropolitan area.
More than 40 percent of state residents lived in four
working-class municipalities — Nezahualcoyotl, Ecatepec, Nau-
calpan, and Tlalnepantla — that serve as bedroom communities
for Mexico City.

During the course of its history, Mexico has experienced
dramatic shifts in population. Demographers estimate that the
country’s population at the time of the Spanish conquest in the
early 1500s was approximately 20 million. By 1600, however,
barely 1 million remained — the result of deadly European dis-
eases and brutal treatment of the indigenous inhabitants by the
Spanish colonizers (see New Spain, ch. 1). At the onset of the


Mexico: A Country Study

Mexican Revolution in 1910, Mexico’s population stood at
approximately 15 million persons. Not until 1940 did Mexico
reach the population level it had in 1519.

Although the population growth between 1910 and 1940
appeared relatively modest in absolute numbers, the seeds
were sown for a spectacular increase over the next thirty years.
Because of advances in preventive medicine and the gradual
control of diseases such as yellow fever, the crude death rate
declined from 33.2 per 1,000 inhabitants in the period 1905 to
1910 to 23.4 in 1940 (see table 3, Appendix). As sanitation con-
ditions improved in post-World War II Mexico, the crude death
rate dropped sharply to 10.1 by 1970. At the same time, how-
ever, fertility rates (the number of children the average woman
would bear from fifteen to forty-nine years of age) remained
relatively stable. Because of the stable fertility rate and declin-
ing death rate, the population increased by 2.7 percent per
annum between 1940 and 1950, by 3.1 percent per annum
between 1950 and 1960, and by 3.4 percent per annum
between 1960 and 1970. By 1970 Mexico’s population stood at
approximately 48.2 million persons, almost two and one-half
times its pre-World War II number. Demographers in 1970 omi-
nously forecast that the population would reach 125 million
persons by the year 2000.

Shortly after assuming the presidency in 1976, Jose Lopez
Portillo y Pacheco (1976-82) adopted an aggressive national
family planning program. This effort paid immediate divi-
dends by reducing Mexico’s fertility rate from 5.4 in 1976 to 4.6
in 1979. The family planning initiative produced a fundamen-
tal change in attitudes that continued and accelerated into the
1990s. Indeed, the government reported that the fertility rate
had declined to 2.9 in 1993. This lower fertility rate produced a
slightly older average population in 1990, compared with two
decades earlier. In 1970, 46.2 percent of all Mexicans were
younger than fifteen years of age, and 56.7 percent were under
twenty years of age. By 1990, these numbers had dropped to
38.3 and 50.6 percent, respectively (see fig. 5).

Ethnicity and Language

Ethnicity is an important yet highly imprecise concept in
contemporary Mexico. Students of Mexican society, as well as
Mexicans themselves, identify two broad ethnic groups based
on cultural rather than racial differences: mestizos and Indi-
ans. Each group has a distinct cultural viewpoint and perceives








300 Mi

The Society and Its Environment

itself as different from the other. At the same time, however,
group allegiances may change, making measurement of ethnic
composition problematic at best.

Originally racial designators, the terms mestizo and Indian
have lost almost all of their previous racial connotation and are
now used entirely to designate cultural groups. Historically, the
term mestizo described someone with mixed European and
indigenous heritage. Mestizos occupied a middle social stratum
between whites and pure-blooded indigenous people (see
Socieconomic Structures, ch. 1). Whites themselves were
divided into criollo (those born in the New World) and peninsu-
lar (those born in Spain) subgroups. In contemporary usage,
however, the word mestizo refers to anyone who has adopted
Mexican Hispanic culture. Seen in this cultural context, both
those with a solely European background and those with a
mixed European-indigenous background are automatically
referred to as mestizos. Mestizo, then, has become a synonym
for culturally Mexican, much as ladino is used in many Latin
American countries for those who are culturally Hispanic.
Members of indigenous groups also may be called (and may
call themselves) mestizos if they have the dominant Hispanic
societal cultural values.

If an indigenous person can become a mestizo, who, then, is
an Indian? Anthropologist Alan Sandstorm lists minimum cri-
teria that compose a definition of Indian ethnicity. According
to Sandstorm, an Indian is someone who identifies himself as
such; chooses to use an indigenous language in daily speech;
remains actively involved in village communal affairs; partici-
pates in religious ceremonies rooted in native American tradi-
tions; and attempts to achieve a harmony with, rather than
control over, the social and natural worlds. Should one or more
criteria become absent over time, the individual probably has
begun the transition to becoming a mestizo.

Although mestizos and Indians may both reside in rural
areas and have relatively comparable levels of income, they
maintain different lives. Such differences can lead to highly
negative perceptions about each other. Mestizos often contend
that Indians are too unmotivated and constrained by tradition
to deal appropriately with the demands of modern society.
Indians, in turn, frequently complain that mestizos are aggres-
sive, impatient, and disrespectful toward nature.

Given the cultural use of the terms, it would be unrealistic to
expect Mexican census officials to count the number of mesti-


Mexico: A Country Study


85 and over



6 4 2 2 4 6


Source: Based on information from Mexico, National Institute of Statistics, Geography,
and Informatics, Mexico Today, Aguascalientes, 1992, 25.

Figure 5. Population by Age and Gender, 1990

zos and Indians based on racial criteria. However, in measuring
how many people speak an indigenous language, the census at
least serves to identify a minimum number of racially unmixed
Indians. In 1990, 7.5 percent of the Mexican population, or
approximately 5.3 million people five years of age and over,
spoke an Indian language. Of that total, approximately 79 per-
cent knew Spanish as well and thus were at least potential cul-
tural converts to the mestizo world.

Enormous statewide differences exist in familiarity with
indigenous languages (see fig. 6). Roughly speaking, familiarity
with indigenous languages increases from north to south. The
latest census showed that almost no native speakers lived in a
band of eight contiguous states stretching from Coahuila in the
northeast to Jalisco and Colima along the north-central Pacific
coast. Speakers of indigenous languages constituted less than 5
percent of the population in states in the far northwest and
along a central belt of states from Michoacan in the west to


The Society and Its Environment

Tlaxcala in the east. The percentage climbed to between 10
and 20 percent in another contiguous grouping of states from
San Luis Potosi to Guerrero, to 26 percent in Oaxaca, to 32
and 39 percent, respectively, in Quintana Roo and Chiapas,
and to 44 percent in Yucatan. Only 63 percent of users of indig-
enous languages in Chiapas also knew Spanish.

Specialists have identified twelve distinct Mexican linguistic
families, more than forty subgroups, and more than ninety
individual languages. Nearly 23 percent of all native speakers
speak Nahuatl, the language of the Aztec people and the only
indigenous language found in fifteen states. Other major indig-
enous languages include Maya (spoken by approximately 14
percent of all Indians and primarily used in the southeast from
the Yucatan Peninsula to Chiapas); Zapotec (spoken by
approximately 7 percent of all Indians and largely used in the
eastern part of Oaxaca); Mixtec (also spoken by approximately
7 percent of all Indians and primarily found in Oaxaca and
Guerrero); Otomf (spoken by approximately 5 percent of all
Indians and used in central Mexico, especially the states of
Mexico, Hidalgo, and Queretaro) ; Tzeltal (spoken by nearly 5
percent of all Indians and used in Chiapas); and Tzotzil (spo-
ken by roughly 4 percent of the Indian population and also
used in Chiapas). With twelve different Indian languages,
Oaxaca has the nation’s most diverse linguistic pattern.

Census data reveal that Indians remain the most marginal-
ized sector of Mexican society. More than 40 percent of the
Indian population fifteen years of age and older was illiterate
in 1990, roughly three times the national rate. Thirty percent
of Indian children between six and fourteen years of age did
not attend school. Indians also had significantly higher mor-
bidity and mortality rates associated with infectious and para-
sitic illness, higher levels of nutritional deficiencies, and less
access to such basic services as indoor plumbing, piped water,
and electricity.

Income Distribution

In the mid-1990s, Mexico had a highly inequitable distribu-
tion of income, a pattern that, according to government statis-
tics, became particularly skewed during the economic crisis of
the 1980s. The country’s continuing inability to create suffi-
cient employment opportunities for its labor force has pro-
duced high levels of unemployment and underemployment
and has required aggressive survival strategies among Mexico’s


Mexico: A Country Study

poor. Such strategies include sending more family members,
even children, into the labor market and reducing consump-
tion of basic commodities.

The 1990 census reported a total national workforce of 24.3
million people. Although population growth slowed to around
2 percent per annum in the early and mid-1990s, analysts esti-
mated that the workforce expanded by up to 4 percent per
annum over the same period. Workforce expansion is expected
to remain at these rates through the late 1990s, as those born
during the peak fertility years of 1970-76 come of age. Thus,
Mexico will need approximately 1 million new jobs each year
through the remainder of the 1990s to provide work for per-
sons entering the job market. During the early 1990s, however,
net job growth was believed to have been less than 500,000 per

Approximately 10 percent of all Mexicans can be character-
ized as belonging to the upper- and upper-middle-income sec-
tors, consisting of the nation’s business executives and
government leaders. Upper-income Mexicans are both highly
urbanized and well educated. Government surveys of house-
hold income revealed that these groups absorbed an increasing
share of wealth during the 1980s. The top 10 percent of the
population accounted for 33 percent of all income in 1984 and
38 percent in 1992.

The middle sector comprises approximately 30 percent of
the nation. Like its upper-income counterparts, this sector is
largely urban and has educational levels superior to the
national average. It consists of professionals, mid-level govern-
ment and private-sector employees, office workers, shopkeep-
ers, and other nonmanual workers. The middle-sector share of
overall income declined from 39 percent in 1984 to 36 percent
in 1992. Inflation seriously eroded the purchasing power of the
middle class during that period, causing many to modify their
buying habits and to withdraw from private education and
health care systems.

The remaining 60 percent of Mexicans make up the lower
sector, itself a heterogeneous group of industrial workers,
informal-sector employees, and peasants. Of these, industrial
workers have the most favored situation, reflecting both their
higher wage scale and membership in the health care system
and retirement or disability programs of the Mexican Institute
of Social Security (Instituto Mexicano del Seguro Social —
IMSS) (see Health and Social Security, this ch.). However,




300 M


The Society and Its Environment

industrial workers also experienced a decline in purchasing
power and share of national income during the 1980s. Overall,
the bottom 60 percent of the population saw its share of total
income fall from 29 percent in 1984 to 26 percent in 1992.

Analysts estimate that the informal sector of the economy
represents from 30 to 40 percent of the urban workforce in the
mid-1990s. Informal-sector workers are self-employed or work
in small firms (during 1993, businesses with one to five employ-
ees accounted for 42 percent of the urban workforce). They
face considerable job instability, and, unlike those in the for-
mal sector, are effectively excluded from IMSS benefits. The
informal sector includes street vendors, domestic servants,
pieceworkers in small establishments, and most construction

During the early 1990s, Mexico reported unemployment
rates of between 3 and 4 percent. These rates, based on surveys
of conditions in Mexico’s three dozen largest cities, excluded
those who had ceased looking for work over the previous two
months, as well as those working only a few hours per week. A
much more accurate government measure of unemployment
and underemployment includes both the unemployed and
those who work less than thirty-five hours per week. This level
of urban partial employment and unemployment stood at
around 20 percent during the early 1990s. The government
does not measure rural unemployment or underemployment,
where rates are regarded by analysts as significantly higher than
those found in urban Mexico.

According to government statistics, the vast majority of
urban workers in the early 1990s earned less than US$15 per
day. Minimum wage rates vary according to region and are
adjusted every January to account for inflation. If inflation
rates are high, labor groups can ask the regulatory committee,
the Tripartite National Minimum Wage Commission, to con-
sider an additional raise during the year. In December 1995 in
Mexico City, the daily minimum wage stood at 20.15 new pesos,
or US$2. 70 (for value of new peso — see Glossary). In 1993 the
government reported that 10 percent of workers earned less
than the minimum wage, 34.7 percent made between one and
two times the minimum wage, and 36.5 percent received
between two and five times the minimum wage.

Government surveys of household income in 1984 and 1989
revealed a worsening pattern of income distribution. As noted
by economist Rodolfo de la Torre, the poorest 30 percent of


Mexico: A Country Study

the population had only 9 percent of total national income in
1984, a figure that had dropped to 8.1 percent in the 1989 sur-
vey. The poorest half saw its share of income drop from 20.8
percent in 1984 to 18.8 percent in 1989. The middle 30 per-
cent of the population controlled 29.7 percent of the total
income in 1984 but only 27 percent in 1989. In contrast, the
wealthiest 20 percent received 49.5 percent of all income in
1984 and 53.6 percent in 1989. Income for the top 10 percent
alone increased from 32.8 percent in 1984 to 37.9 percent five
years later.

Throughout 1995 Mexico experienced a sharp economic
contraction. Observers estimated that approximately 1 million
jobs were lost during this period. Official unemployment rates
skyrocketed to more than 6 percent for the year. Interest rates
also rose sharply in the wake of several currency devaluations.
Millions of Mexicans with adjustable-rate mortgages or substan-
tial credit-card debt were particularly hard hit. Analysts sug-
gested that the events of 1995 may have contributed to a
further skewing of income distribution, with the wealthiest
Mexicans more able to weather the economic storm because
their capital often resided abroad.

Structure of Society

Social Indicators

In the early 1990s, Mexico reported substantial improve-
ment in overall living conditions compared with the previous
twenty years. The 1990 census demonstrated expanded access
to basic public services such as running water and indoor
plumbing. It also revealed, however, that Mexicans had not
shared equally in these improvements, with southern Mexico
consistently lagging behind the rest of the nation in quality-of-
life indicators. In addition, rural living conditions countrywide
paled in comparison to those found in urban areas.

According to the 1990 census, 79.4 percent of all Mexican
households had access to running water, a notable improve-
ment from the 61 percent and 70.3 percent rates recorded in
1970 and 1980, respectively. Significantly, however, access to
running water did not necessarily mean indoor plumbing.
Indeed, a household whose residents obtained water from a
piped system elsewhere on the property or from a public faucet
were considered to have access to running water. In addition,
the census did not measure the quality or quantity of piped


The Society and Its Environment

water. Many lower-class communities had access only to
untreated running water, and even that for only a portion of
each day.

Even using the broad definition of access to running water,
wide variations emerged. Four states in southern Mexico —
Chiapas, Oaxaca, Guerrero, and Tabasco — reported access lev-
els below the 1970 national average. Access to running water
was especially low in rural communities. Only 48.1 percent of
all communal farming communities or ejidos (see Glossary)
nationwide reported access in 1988, with levels below 30 per-
cent for ejidos in Veracruz and Yucatan, and below 40 percent
for ejidos in Chiapas, San Luis Potosi, Tabasco, and Tamaulipas
(see Rural Society, this ch.).

Similar variations also were evident in a number of other
social indicators. Nationally, 63.6 percent of all households had
indoor plumbing in 1990, as compared with 41.4 percent and
50.7 percent in 1970 and 1980, respectively. However, indoor
plumbing rates ranged from more than 90 percent in Mexico
City to less than 40 percent in Oaxaca and Chiapas. National
household access to electricity climbed from 58.9 percent in
1970 to 74.4 percent in 1980 and to 87.5 percent in 1990. Yet
although Aguascalientes, Nuevo Leon, and Mexico City
reported rates exceeding 95 percent in 1990, less than 70 per-
cent of all Chiapas households had electricity. Only 68.3 per-
cent of all ejido communities had electricity in 1988, with rates
below 60 percent for ejidos in Chiapas, San Luis Potosi, Vera-
cruz, and Yucatan, and below 50 percent for ejidos in Chihua-

Finally, 19.5 percent of all households had dirt flooring in
1990, a notable improvement from the 41.1 percent average in
1970 and the 25.8 percent average in 1980. Again, however,
jurisdictions reported enormous disparities. Although Mexico
City and five northern states — Aguascalientes, Baja California,
Coahuila, Chihuahua, and Nuevo Leon — had levels below 10
percent, more than 40 percent of all households in the south-
ern states of Chiapas and Guerrero and more than 50 percent
of all households in Oaxaca had dirt floors.

Social Spending

Analysts have offered widely varied assessments of the magni-
tude of poverty in Mexico. The United Nations Economic
Commission for Latin America and the Caribbean estimated in
1989 that 39 percent of all Mexican households were in pov-


Mexico: A Country Study

erty, including 14 percent in extreme poverty (indigence). The
National Solidarity Program (Programa Nacional de Solidari-
dad — Pronasol) reported that 51 percent of the population in
1987 fell below the poverty line, of which 21 percent were
extremely poor. Mexican author Julieta Campos asserted that
approximately 60 percent of all Mexicans in 1988 were poor,
including 25 percent indigent.

Despite these numerical differences, analysts generally agree
on basic trends and characteristics. First, poverty levels
declined in the 1960s and 1970s but escalated in the wake of
the economic crisis that began in 1982 and continued for most
of that decade. For example, Pronasol estimated that poverty
levels declined from 76 percent in 1960 to 54 percent in 1977
and to 45 percent in 1981 before substantially increasing over
the next six years. Second, indigence has its roots in the ram-
pant economic problems of the countryside. Economist San-
tiago Levy estimated that approximately three-quarters of all
rural residents in the late 1980s were extremely poor. In addi-
tion, the urban poor often have migrated from the countryside
in search of opportunities for themselves and their families.
Third, the indigent often suffer from nutritional deficiencies
and other health maladies that contribute to lower life expect-
ancy than the population as a whole. Finally, those in extreme
poverty have larger families; children are expected to work to
help support the household.

Mexican governments over the years have introduced
numerous antipoverty initiatives, with varying degrees of suc-
cess. In 1977 the Lopez Portillo administration established the
General Coordination of the National Plan for Depressed
Zones and Marginal Groups (Coordinacion General del Plan
Nacional de Zonas Deprimidas y Grupos Marginales —
Coplamar). An umbrella organization, Coplamar developed
linkages with numerous existing government agencies for
improvements in health care, education, and other basic infra-
structure. For example, approximately 2,000 rural health clin-
ics were built under the auspices of IMSS-Coplamar. The
National Company of Popular Subsistence (Compama Nacio-
nal de Subsistencias Populares — Conasupo)-Coplamar estab-
lished thousands of stores that sold basic products to low-
income families at subsidized prices. Although many of its pro-
grams were reduced or eliminated after 1982, Coplamar con-
tributed to a noteworthy, although temporary, reduction in


Modern apartment complex in
Mexico City
Courtesy Arturo Salinas

Substandard housing on outskirts of
Mexico City
Courtesy Arturo Salinas

Mexico: A Country Study

In his November 1993 State of the Nation address, President
Salinas announced that government spending on social
projects had risen 85 percent in real terms between 1989 and
1993. Spending for education rose 90 percent; for health, 79
percent; and for environment, urban development, and distri-
bution of drinking water, 65 percent. Much of that social
spending was channeled through Pronasol, an umbrella orga-
nization established by Salinas in December 1988 to promote
improved health, education, nutrition, housing, employment,
infrastructure, and other productive projects to benefit those
living in extreme poverty.

Salinas claimed that Pronasol marked a departure from pre-
vious policies of broad subsidies, high levels of unfocused gov-
ernment spending, and heavy state intervention in the
economy. According to Denise Dresser, it advanced President
Salinas’s goal of adapting the state’s traditional social role to
the straitened economic conditions of the late 1980s and early
1990s by replacing general subsidies with strategic, targeted
intervention. Salinas designed Pronasol to achieve the dual
objectives of making social spending more cost-effective and
fostering greater community involvement and initiative in local
development projects. The main themes of Pronasol included
grassroots participation and minimum bureaucracy (both of
which are essential for project success) and the promise of
immediate results. The federal government provided financing
and raw materials for improving basic community services,
although community members were required to conceive the
projects and perform the work.

Approximately 250,000 grassroots Pronasol committees
designed projects in collaboration with government staff to
address community needs. They mobilized and organized com-
munity members, evaluated proposed public works, and super-
vised implementation. The government disbursed funds to the
committees to finance the public works projects or to comple-
ment regional development programs, which fell within three
strategic areas: social services, production, and regional devel-
opment. Committees obtained matching funds from state and
municipal governments in order to qualify for Pronasol funds.
This match served to multiply the economic scale and the
potential positive impact of the program.

Pronasol’s social service aspect, Solidarity for Social Well-
being (Solidaridad para el Bienestar Social), contained a wide
range of programs that included education, health care, water,


The Society and Its Environment

sewerage, and electrification projects; urbanization improve-
ments; and low-income housing. Over a six-year span, Pronasol
created some 80,000 new classrooms and workshops and reno-
vated 120,000 schools; awarded scholarships to keep nearly 1.2
million indigent children in primary schools; established more
than 300 hospitals, 4,000 health centers, and some 1,000 rural
medical units; provided piped water access for approximately
16 million people; and provided materials to repair or rein-
force 500,000 low-income homes and build nearly 200,000 new
homes. Solidarity for Production (Solidaridad para la Produc-
tion) provided loans to approximately 1 million peasants who
did not qualify for government or private credits, established
2,000 low-income credit unions, and supported some 250,000
low-income coffee producers (80 percent of them Indians) and
nearly 400,000 agricultural day laborers (jornaleros) . Solidarity
for Regional Development (Solidaridad para el Desarrollo
Regional) funded the construction or renovation of 200,000
kilometers of roads and more than 100,000 municipal improve-
ment projects.

Despite these achievements, critics contended that Pronasol
was merely a politicized repackaging of traditional welfare and
public works projects that ameliorated but did not address the
root causes of poverty in Mexico. In the view of these critics,
Pronasol’s raison d’etre was to enable Salinas and his support-
ers to build new political linkages with autonomous low-income
interest groups, thereby revitalizing the Institutional Revolu-
tionary Party (Partido Revolucionario Institucional — PRI) for
future elections. Despite Pronasol’s stated purpose, critics also
maintained that resources often did not reach those in
extreme poverty. In 1995 President Ernesto Zedillo restruc-
tured Pronasol as the Alliance for Well-being (Alianca para el
Bienestar), strengthening the resource allocation roles of states
and municipalities and reducing those of the presidency.

Urban Society

At the beginning of the twentieth century, only 10.5 percent
of the national population lived in localities with more than
15,000 residents. A slow but steady increase of such urban com-
munities occurred over the next four decades, accounting for
20 percent of the country’s total population in 1940. They
climbed rapidly to 27.9 percent in 1950, 36.5 percent in 1960,
44.7 percent in 1970, 51.8 percent in 1980, and 57.4 percent in


Mexico: A Country Study

1990. An estimated 71 percent of all Mexicans lived in commu-
nities of at least 2,500 residents in 1990.

Thre*: cities — Mexico City, Guadalajara, and Monterrey —
dominated the urban landscape in the mid-1990s. Their metro-
politan areas accounted for about one-fourth of the nation’s
population and more than 40 percent of the total urban popu-
lation. Nonetheless, the highest growth rates between 1970 and
1990 occurred in cities containing populations ranging from
100,000 to 1 million. Roughly 23 percent of the nation resided
in Mexico’s fifty-six mid-level cities in 1990.

With 15 million residents reported in the 1990 census, the
Mexico City metropolitan area alone contained 18.5 percent of
the total national population. However, the metropolitan area
expanded only 5.8 percent from 1980 to 1990, far below the 2.3
percent per annum national population growth rate over the
same period. The population of Mexico City itself declined
from 9.2 million in 1980 to 8.2 million in 1990, a 10.9 percent
reduction. This decline probably reflected both dislocations
experienced by low-income, center-city residents following the
1985 earthquake and contracting employment opportunities
during the economic crisis of the 1980s. However, one analyst,
Alfonso X. Iracheta Cenecorta, contends that Mexico City
should be viewed not as a single metropolitan area but rather
as an emerging megalopolis also incorporating the cities and
surrounding environs of Puebla, Toluca, and Cuernavaca. Seen
from this perspective, the region continued to grow during the
1980s, and included slightly more than 17 million people in

To relieve the strains of rapid growth on Mexico’s largest cit-
ies, the Salinas administration encouraged businesses and gov-
ernment agencies to move their operations from the major
metropolitan areas to mid-level cities. During the 1980s,
mid-level cities experienced the nation’s highest growth rates.
Several cities in northern Mexico, especially along the border
with the United States, were particularly dynamic during this
period. They included Torreon, Tijuana, Mexicali, Matamoros,
and Ciudad Juarez. Other rapidly expanding cities included
Cuernavaca and Jalapa near the capital, and Tampico and
Coatzacoalcos on the Gulf of Mexico coast.

The dramatic growth of cities over the past forty years has
seriously taxed the nation’s ability to build urban infrastruc-
ture, especially housing. Adequate and affordable housing
emerged as a paramount concern of low-income residents after


The Society and Its Environment

1940. Prior to that time, most urban poor lived in center-city
rental units. Real estate investors frequently converted deterio-
rating colonial structures into vecindades (sing., vecindad). A
vecindad typically consists of a large number of rented rooms
constructed around an interior open area. Residents share
kitchen and bathroom facilities, often of marginal quality. Fol-
lowing institution of rent control by the government during
World War II, investors often abandoned the vecindad market,
depleting an already poor housing stock.

Government efforts to address the urban housing shortfall
after World War II generally proved inadequate. During the
1950s and 1960s, the government financed some housing units
in major metropolitan areas, the largest of which — the
Nonoalco-Tlatelolco housing complex in northern Mexico
City — contained nearly 12,000 units.

However, public employees were the principal beneficiaries
of government housing programs. During the administration
of Luis Echeverna Alvarez (1970-76), the government took a
more active role in fostering formal- and informal-sector hous-
ing. Three funds were established in 1972: the Institute of the
National Housing Fund for Workers (Instituto del Fondo
Nacional de la Vivienda para los Trabajadores — Infonavit); the
Housing Fund of the Institute of Social Security and Services
for State Workers (Fondo para la Vivienda del Instituto de Ser-
vicios y Seguridad Social de los Trabajadores del Estado —
Fovissste); and the National Institute for Community Develop-
ment (Instituto Nacional para el Desarrollo de la Comu-
nidad — Indeco). These funds were designed to meet the needs
of private-sector formal workers, state employees, and infor-
mal-sector workers, respectively. Of the three funds, Infonavit
was the most extensive, with nearly 900,000 units financed over
a twenty-year period. Still, demand far exceeded supply and a
lottery system was used to determine occupancy. In addition,
most workers could not afford the monthly payments required.

For the majority of the urban lower class, so-called self-help
housing has emerged as the only viable option. A self-help
housing community typically begins with the purchase by inves-
tors of large tracts of contiguous land on the periphery of
urban areas. In some cases, these transactions involve illegal
purchases of ejido properties of dubious agricultural worth.
Whether ejido or not, however, the tracts usually consist of mar-
ginal lands ill-suited for middle- and upper-class residential
developments or for industrial purposes. Investors subdivide


Mexico: A Country Study

the land into numerous lots and sell them to low-income fami-
lies, who then build modest brick structures, often with only
single large rooms. Ostensibly, investors cannot sell lots until
they have installed water and sewer lines, paved streets, and
completed other basic infrastructure. Frequently, however,
investors do little more than mark the lots for sale. Because a
large land tract may contain thousands of potential lots, inves-
tors often realize enormous profits.

Nezahualcoyotl, Mexico’s quintessential self-help housing
community, burst onto the national scene during the 1960s.
During the late 1950s, a group of investors purchased more
than sixty square kilometers of land east of Mexico City in an
area in the state of Mexico just outside the Federal District. The
land in question, a dried lakebed, flooded during the rainy sea-
son and was prone to dust storms during the dry season. None-
theless, investors created 160,000 low-income housing lots. By
1970 Nezahualcoyotl contained nearly 700,000 residents, but
there were few public services.

Local governments have varied widely in the degree of sup-
port extended to self-help housing developments. Although
the Federal District blocked most self-help housing after the
early 1950s, the neighboring state of Mexico actively encour-
aged the development of communities such as Nezahualcoyotl,
in effect serving as a safety valve for Mexico City. Likewise,
Guadalajara generally has endorsed such development as an
appropriate response to the housing needs of the urban poor.
By contrast, Monterrey and a number of other cities in north-
ern Mexico have opposed self-help communities, a decision
that has sparked frequent squatter invasions of ejido land. Local
authorities sometimes have used force to dislodge the invaders,
but often have tacitly allowed the new communities to remain.

Despite obvious problems, self-help housing has addressed
numerous important and cross-cutting social issues. These
communities substantially increase the housing stock available
to low-income urban residents. As sociologists Alan Gilbert and
Peter Ward have observed, without self-help construction, the
government either would have to expend many more resources
on housing projects or raise wages to enable the poor to com-
pete in the formal housing market. By forcing people to build
their own homes, the government has been able to preserve
funds to underwrite industrial development. Self-help housing
also allows lower-income residents to become owners rather
than renters. And as self-help communities mature and resi-


Rush-hour traffic in Mexico City
Courtesy Inter-American Development Bank
Street scene in downtown Guadalajara
Courtesy Rodolfo Garcia


Mexico: A Country Study

dents add to initial structures, renters (typically poorer,
younger, and more recently arrived in the city than owners)
have housing options other than vecindades.

Even including self-help construction, however, Mexico
faced a severe housing crisis in the mid-1990s. The Zedillo
administration reported in 1995 that more than 25 percent of
the 17.8 million houses needed to be repaired or replaced.
Because two-thirds of the population are under thirty years of
age, analysts project sharp increases in demand for new hous-
ing over the next two decades.

Rural Society

Nearly eighty years after enactment, agrarian reform
remains at once one of the Mexican Revolution’s most impres-
sive accomplishments and enduring failures. At the onset of
the revolution, huge haciendas controlled almost all agricul-
tural land. By 1991 agrarian reform beneficiaries (and their
heirs) held about half of all national land. More than 3.5 mil-
lion campesinos live and work in nearly 30,000 communities
formed as a direct result of various agrarian reform initiatives.
At the same time, however, most campesinos hold marginal par-
celas (individual plots) that cannot meet the subsistence needs
of their families. These campesinos, as well as those with no
land at all, have to work periodically for large landowners or
agribusinesses, migrate seasonally to the United States, or take
a variety of other actions to survive.

The Agrarian Reform Act of 1915 and the constitution of
1917 laid the groundwork for dramatic changes in Mexico’s
land tenure system. These documents established that the
nation retained ultimate control over privately held land,
which could be expropriated and redistributed in the public
interest to campesinos.

The ejido, or communally farmed plot, emerged as the
uniquely Mexican form of redistributing large landholdings.
Under this arrangement, a group of villagers could petition the
government to seize private properties that exceeded certain
specified sizes — initially 150 hectares for irrigated land and 200
hectares for rain-fed holdings. Assuming a favorable review of
the petition, the government then expropriated the property
and created an ejido. The state retained title to the land but
granted the villagers, now known as ejidatarios, the right to farm
the land, either in a collective manner or through the designa-
tion of individual parcelas. Ejidatarios could not sell or mortgage


The Society and Its Environment

their land but could pass usufruct rights to their heirs. Ejidata-
rios had to work their land regularly in order to maintain rights
over it. In cases where villagers established that they had collec-
tively farmed the land in question before its eventual consolida-
tion into a hacienda, the government created an agrarian
community (comunidad agraria). Comuneros (members of agrar-
ian communities), who lived primarily in southern Mexico, had
largely the same rights and responsibilities as ejidatarios.

Mexican administrations have varied widely in the impor-
tance accorded to the ejido. During the 1920s and early 1930s,
policy makers typically viewed the ejido as a transitional system
that would lead to small private farms nationwide. For exam-
ple, President Plutarco Elias Calles (1924-28) described the
ejido as a school from which ejidatarios eventually would gradu-
ate as private farmers. Given this perspective, policy makers
encouraged ejidos to divide their lands into individual parcelas.
In contrast, President Lazaro Cardenas (1934-40) saw the ejido
as an essential and permanent component of agricultural
development, and he encouraged a collectivist organizational
structure to maximize resources. During his six-year term,
Cardenas expropriated nearly 18 million hectares of privately
owned land for redistribution as ejidos, more than double the
total amount recorded since the revolution ended. The ejido
share of total cultivable land increased from roughly 13 per-
cent in 1930 to approximately 47 percent in 1940.

During the next three decades, the government favored
large-scale commercial agriculture at the expense of the ejido.
Federally funded irrigation projects in the states of Sonora and
Sinaloa and in the agriculturally important Bajio region of
Guanajuato and northern Michoacan were designed to enable
large landowners to compete in the United States agricultural
market. The government also narrowed the definition of pri-
vate properties eligible for expropriation.

Upon assuming the presidency in 1970, Luis Echeverria
Alvarez shifted government priorities back to the ejido. Espous-
ing the same philosophy as Cardenas three decades before,
Echeverria felt that the ejido would play a leading role in meet-
ing domestic food demand. Echeverria increased ejido holdings
by some 17 million hectares, including the expropriation of
rich irrigated lands in Sonora. Collectivized ejidos received pref-
erential access to credit and farm equipment through govern-
ment agencies such as the National Bank of Rural Credit
(Banco Nacional de Credito Rural — Banrural).


Mexico: A Country Study

The Echeverria administration marked the last significant
redistribution of landholdings. Echeverria’s successor, Lopez
Portillo, distributed only about 1.8 million hectares to ejidos.
Yet like Echeverria, Lopez Portillo sought to channel govern-
ment resources to ejidos. Following the discovery of vast petro-
leum reserves along Mexico’s southeastern coast, Lopez
Portillo used oil profits to establish the Mexican Food System
(Sistema Alimentario Mexicano — SAM), which sought to
ensure national self-sufficiency in basic staples, such as corn
and beans. Lopez Portillo encouraged ejidos to play a major
role in this effort and channeled petrodollars to agencies offer-
ing credit to ejidatarios. For many ejidatarios, however, credit
merely generated increased debt and dependence on govern-
ment bureaucracies without significantly improving their over-
all conditions. In the wake of the debt crisis that began in 1982,
the administration of Miguel de la Madrid Hurtado (1982-88)
abolished the SAM and cut agricultural funding by two-thirds.

Despite collectivist efforts of Echeverria and, to a much
lesser extent, Lopez Portillo, a national survey released at the
beginning of the Salinas presidency revealed that approxi-
mately 88 percent of ejidatarios and comuneros farmed individual
parcelas. (Government statistics did not differentiate between
ejidos and agrarian communities.) The survey also indicated a
notable differentiation between the 16 percent of ejidos and
agrarian communities that had irrigated fields and the remain-
der that did not. The former reported significantly higher per-
centages in the use of improved seeds, pesticides, and
fertilizers, as well as access to technical assistance. Sixty-five per-
cent of all ejidatarios and comuneros indicated that they grew
corn as their principal crop.

Mexico’s post-1940 population explosion produced a contin-
ual subdivision of most parcelas, resulting in holdings that were
below subsistence level. According to the 1981 agricultural cen-
sus, nearly 31 percent of all ejidatarios held parcelas of two hec-
tares or less, far below the amount of land required to support
a family. Another 27 percent maintained holdings ranging
from two to five hectares, with 38 percent farming parcelas of
between five and twenty hectares. Less than 3 percent of ejidata-
rios held individual plots of between twenty and fifty hectares.

Data from the 1981 agricultural census on private landhold-
ing patterns revealed an even more stratified picture. Nearly 40
percent of all private (non-ejido) farmers held plots of two hec-
tares or less, with an additional 17 percent working plots of


The Society and Its Environment

between two and five hectares. Together, these two groups had
only 2 percent of the privately owned land area. In contrast, 2
percent of all landholders controlled nearly 63 percent of the
privately owned land. Holdings exceeding 2,500 hectares were
particularly in evidence in the north (especially in Chihuahua
and Sonora) and in Chiapas.

With plots too small to support even a modest standard of
living, farming has become a secondary source of income for
most campesinos. Many worked as day laborers for large land-
holders. The 1981 agricultural census recorded approximately
3 million farm laborers, 60 percent of them temporary. Ejida-
tarios, in effect, form a cheap and available labor pool for com-
mercial agriculture. These sectors are further linked through
the illegal before 1992 but nevertheless widespread practice of
renting ejido land. Although the government maintains no sta-
tistics on this activity, some observers estimate that up to half of
the irrigated ejido lands in Sonora and Sinaloa and up to half of
such holdings in the Bajio region of Guanajuato and southern
Michoacan are rented. Regular migration to the United States
also is an essential survival strategy for many campesinos, with
remittances allowing many families to remain in the country-
side. Many young campesinos spend the bulk of the year work-
ing in the United States, returning to their plots only during
the planting and harvesting seasons. An unknown number of
campesinos in isolated communities in southern and western
Mexico also engage in narcotics trafficking.

In the 1970s, sociologist Rodolfo Stavenhagen and other
scholars suggested that the ejidatarios were among Mexico’s
poorest and most exploited rural workers. Their productivity
was low because of the poor quality of their land, the lack of
timely technical assistance, and the unavailability of low-cost
agricultural inputs. Yet the government’s official policy histori-
cally has been to keep agricultural prices low in an effort to
subsidize the urban population.

Ejidatarios remain highly dependent on the bureaucratic
channels of both the state and the ruling PRI). All ejidatarios
are automatically members of the peasant sector of the PRI;
but owing to their lack of political experience, they become
easily manipulated by professional “peasant” leaders in Mexico
City, who are usually of middle-class backgrounds. Many ejida-
tarios look to the state as a modern patron (traditional paternal-
istic landlord) who has the power to control prices, credit
opportunities, and access to farm machinery and water rights


Mexico: A Country Study

and who must be continuously courted and reminded of their
pressing needs.

Confronted with the dysfunctional character of much of
Mexican agriculture, the government in 1992 radically
changed the ejido land tenure system, codifying some existing
actions that were illegal but widely practiced and introducing
several new features. Under the new law, an ejido can award its
members individual titles to the land, not merely usufruct
rights to their parcelas. Ejidatarios can, in turn, choose to rent,
sell, or mortgage their properties. Ejidatarios do not need to
work their lands to maintain ownership over them. They also
may enter into partnerships with private entrepreneurs. The
law also effectively ends the redistribution of land through gov-
ernment decree. Finally, the processing and resolution of land
disputes are decentralized.

The government’s perspective is that these new measures
provide ejidatarios with more realistic and sensible options. A
winnowing effect is anticipated, as some inefficient and mar-
ginal producers sell their properties to more efficient farmers.
With property to mortgage, the more entrepreneurial ejidata-
rios have collateral that can be used to obtain private-sector
credit. By removing the prospect of widespread government-
directed land redistribution, owners will be more likely to
invest resources to increase agricultural production. Govern-
ment critics fear, however, that the revisions will increase land-
lessness and poverty among ejidatarios and solidify inequitable
patterns of land distribution in states such as Chiapas.

As part of its overall agricultural program, the Salinas admin-
istration attempted to restructure Banrural as a more efficient
and streamlined organization, limiting its scope to serving
those ejidatarios with production capabilities. To assist more
marginal producers in dealing with the agricultural transfor-
mation, Salinas established the Procampo program in 1993 as
part of the Pronasol initiative. Procampo provided direct pay-
ments to farmers based on the size of their holdings. In 1995
President Zedillo shifted Procampo’s operation to the newly
created Alliance for the Countryside (Alianza para el Campo)
and extended it for a fifteen-year period.

Interpersonal Relations

Interpersonal relations are more important in the function-
ing of Mexican society than impersonal, bureaucratic norms
and regulations. Parentela (extended family) members, compa-


The Society and Its Environment

dres (godparents), cuates (very close buddies), and friends
expect from one another various degrees of loyalty, material
and spiritual assistance, emotional support, physical protec-
tion, and even flexibility in the enforcement of laws, norms,
and regulations.

Primary ties are structured through blood descent, which is
traced equally through the father’s and mother’s side. Every
person is, therefore, a member of two family lines. The per-
son’s name, which often includes the matrilineal after the patri-
lineal, represents this arrangement.

One’s parentela usually includes all the descendants of a
great-grandparent or of a grandparent on both the father’s and
the mother’s sides. Thus, it is fairly common for a person to
claim having a dozen or more “uncles” and “aunts” and several
dozen cousins. However, this same person can easily identify
the several degrees of the specific type of relationships that
exist within the family.

The Mexican household — that is, those family members who
dwell under the same roof — differs from the North American
household. Mexican households can include the parents’
nuclear family as well as that of a married son or daughter and
their young children. Living arrangements vary among the dif-
ferent kinds of households. In most cases in which two or more
nuclear families share the same roof, each nuclear family keeps
its separate budget and, often, a separate kitchen. After a few
years of living with their parents, married children who opt for
this arrangement often set up independent households. Other
household members can include out-of-town relatives, fellow
townsmen, and arrimados (literally “the leaned-on,” that is, rent-
ers or “permanent guests”).

Family membership presupposes an inalienable bond
among first-, second-, third-, and fourth-generation relatives, a
bond that is accompanied by a corresponding set of rights and
obligations. Family members are expected to display affection
openly and reciprocally, as well as provide each other material
and moral support. The traditional family has the power to
enforce these virtues through the exercise of pressure over its
members and through a series of actions usually performed by
its elder members. These include social pressure, manipula-
tion, and gossip.

Despite the dramatic changes that have occurred in Mexican
society since 1940, the family remains the most important
social institution. Indeed, the economic crisis of the 1980s may


Mexico: A Country Study

have enhanced its role as the place to turn when in need. A
national opinion poll conducted in 1982 by the Center for
Educational Studies confirmed the centrality of the Mexican
family. The majority of those surveyed identified the family as
the institution where they felt most secure and confident. Most
viewed the family as the essential safety net providing help and
protection. Economic survival often requires several family
members to enter the workforce and pool their incomes. As
noted previously, remittances from one or more children work-
ing in the United States allow many families to continue living
in rural areas.

The critical role of the Mexican family was also confirmed in
a 1995 national survey sponsored by the Institute of Social
Research of the National Autonomous University of Mexico
(Universidad Nacional Autonoma de Mexico — UNAM).
Respondents associated the family with such positive terms as
love, household, children, and well-being. Respondents also
identified rejection by one’s family as a worse occurrence than
injustice and abuse of authority, poverty, and work conflicts.

Although Mexicans generally hold their families in high
esteem, such may not be the case with those outside the family
web. Eighty percent of those interviewed by the Center for
Educational Studies agreed that one should be cautious in rela-
tions outside the family. The center’s analysts linked this low
level of confidence and trust with a distinction most Mexicans
made between their own moral codes and those of others. In
general, Mexicans feel that they adhere to a much higher
moral standard than do their neighbors. Thus, for example, 80
percent of those interviewed believed it important to honor
one’s parents. However, when asked if others felt the same way,
only three out of ten agreed. As a result of the focus on one’s
family for trust and help, fewer than half of those surveyed
reported membership in civic or social organizations.

Attitudes towards non-family members may be evolving, how-
ever, as Mexicans increasingly endorse the tenets of a modern
and open society. The UNAM researchers found considerable
evidence that Mexicans had become tolerant of others and sup-
portive of cultural differences. Such attitudes are particularly
prevalent among Mexican youth and those with higher educa-
tional and income levels.

For many families, however, compadrazgo, or the system of
godparenting, offers a way to expand their support structure. A
family initiates this ritual kinship network by inviting a man


Faces of Mexico
Courtesy Inter-American Development Bank


Mexico: A Country Study

and woman to serve as godparents for a child. Through com-
padrazgo, the child’s parents and godparents — now known as
compadres (literally “co-fathers”) and comadres (“co-mothers”) —
enter into a complex relationship of rights and obligations.
Often, the relationship cuts across social classes. When in need,
a family often turns to its children’s godparents for assistance.
For instance, an employer is expected to look first to his or her
children’s godparents when hiring additional workers. In
exchange, the compadrazgo demands intense loyalty to the
employer from the worker hired by that means.

“Permanent” social relations also are built through cuatismo
among men and comparable associations of women. Cuate
(from the Nahuatl word meaning twin brother) is used
throughout Mexico to describe a special male friend or group
of friends with whom one spends considerable leisure time and
who can be trusted with intimate information. Cuate groups
can include up to ten members who share common interests,
who are bound by intense friendship and personal relations,
and who commit themselves to assisting each other in case of

Role of Women

Beginning in the 1970s and over the next two decades, dra-
matic changes occurred in the role of women in the Mexican
economy. In 1990 women represented 31 percent of the eco-
nomically active population, double the percentage recorded
twenty years earlier. The demographics of women in the work-
force also changed during this period. In 1980 the typical
female worker was under twenty-five years of age. Her partici-
pation in the workforce was usually transitional and would end
following marriage or childbirth. After the 1970s, however, an
emerging feminist movement made it more acceptable for edu-
cated Mexican women to pursue careers. In addition, the eco-
nomic crisis of the 1980s required many married women to
return to the job market to help supplement their husbands’
income. About 70 percent of women workers in the mid-1990s
were employed in the tertiary sector of the economy, usually at
wages below those of men.

The growing presence of women in the workforce contrib-
uted to some changes in social attitudes, despite the prevalence
of other more traditional attitudes. The UNAM 1995 national
opinion survey, for example, found a growing acceptance that
men and women should share in family responsibilities.


The Society and Its Environment

Approximately half of all respondents agreed that husbands
and wives should jointly handle child-care duties and perform
housekeeping chores. However, such views were strongly
related to income and educational level. Low income and min-
imally educated respondents regarded household tasks as
women’s work. The UNAM responses correlated with the find-
ings of Mercedes Gonzalez de la Rocha, whose research
focused on working-class households in Guadalajara. Gonzalez
de la Rocha reported that the members of these households
held traditional norms and values regarding the roles of men
and women. In addition, these women were often subjected to
control, domination, and violence by men.

Observers noted that women generally were held to a
stricter sexual code of conduct than men. Sexual activity out-
side of marriage was regarded as immoral for “decent” women
but acceptable for men.


The 1980s and early 1990s witnessed a notable shift in reli-
gious affiliation and in church-state relations in Mexico.
Although Mexico remains predominantly Roman Catholic,
evangelical churches have dramatically expanded their mem-
bership. Motivated in part by the evangelical challenge, the
leadership of the Roman Catholic Church has sought greater
visibility, speaking out on sensitive public issues and ignoring
constitutional bans on clerical involvement in politics. These
actions ultimately led in 1992 to dramatic constitutional
changes and a resumption of diplomatic relations with the Vat-

The Roman Catholic share of the population declined
steadily during the period from 1970 to 1990. In 1970, 96.2 per-
cent of the population five years of age and older identified
itself as Roman Catholic. That dropped to 92.6 percent of the
population in the 1980 census and to 89.7 percent in 1990. The
1990 census revealed significant regional variations in numbers
of Roman Catholics. Roman Catholics represented more than
95 percent of all Mexicans in a band of central-western states
extending from Zacatecas to Michoacan. In contrast, the least
Roman Catholic presence was found in the southeastern states
of Chiapas, Campeche, Tabasco, and Quintana Roo.

Dozens of evangelical denominations have engaged in
strong recruitment efforts since 1970. Protestant or “evangeli-
cal” affiliation — the terminology used by Mexican census offi-


Mexico: A Country Study

cials — surged from 1.8 percent in 1970 to 3.3 percent in 1980
and to 4.9 percent in 1990. Traditional Protestant denomina-
tions, including Lutherans, Methodists, and Presbyterians,
have had a small urban presence dating from the late 1800s.
However, the Protestant membership explosion during the
1970-90 period was led by congregations affiliated with
churches such as the Assemblies of God, the Seventh Day
Adventists, the Church of Jesus Christ of Latter Day Saints
(Mor mons), and Jehovah’s Witnesses. For example, the Mor-
mons reported that membership surged from 248,000 in 1980
to 617,000 in 1990 and increased further to 688,000 by 1993.

Protestant or evangelical growth was especially strong in
southeastern Mexico. In 1990 Protestants or evangelicals com-
posed 16 percent of the population in Chiapas, 15 percent in
Tabasco, 14 percent in Campeche, and 12 percent in Quintana
Roo. Yet a significant evangelical presence also has appeared in
several other areas, including the states of Veracruz and
Mexico, where more than 20 percent of all Protestants or evan-
gelicals live.

Church-State Relations

The Roman Catholic Church’s role in Mexican history goes
back to 1519. When Hernan Cortes, the Spanish conqueror of
New Spain, landed on the coast of Mexico, he was accompa-
nied by Roman Catholic clergy. All new Spanish territories
were to be conquered in the name of the cross as well as the
crown. Since those early days, the Roman Catholic Church has
always been present, playing different roles, some of which
have led to violent confrontations.

The history of the relationship between church and state fol-
lowing independence involves a series of efforts on the part of
the government to curtail the church’s influence. Nineteenth-
century liberals, trained in the law and influenced by the
French Revolution, were anticlerical. Liberals, who also were
federalist and favored free competition, were highly concerned
that the Roman Catholic Church, by owning between one-quar-
ter and one-half of the land and by controlling most schools,
hospitals, and charitable institutions, was practically a state
within the Mexican state.

Between 1833 and the early 1840s, the Mexican government
produced various pieces of legislation to limit the power of the
church. In 1833 the government adopted several anticlerical
measures, including one providing for the secularization of


Metropolitan Cathedral in downtown Mexico City

Courtesy Arturo Salinas

education and another declaring that the payment of the eccle-
siastical tithe was not a civil obligation.

The first major confrontation between the church and the
state occurred during the presidency of Benito Juarez (1855-
72). The 1855 Juarez Law drastically reduced traditional eccle-
siastical privileges. On March 11, 1857, a new constitution was
adopted that denied all ecclesiastical entities the right to own
real estate and abolished most remaining ecclesiastical privi-
leges. On July 12, 1857, Juarez confiscated all church proper-
ties, suppressed all religious orders, and empowered the state
governors to designate what buildings could be used for reli-
gious services. Mexico’s first religious civil war was fought
between 1857 and 1860 in reaction to the legislation (see Civil
War and the French Intervention, ch. 1).

The constitution of 1917 highlighted and institutionalized
many of the nineteenth-century secular reforms. The new con-
stitution included at least five articles that affected all religious
groups, regardless of denomination. These articles, which
remained in effect until 1992, appeared to preclude any
national role for the Roman Catholic Church. Article 3 forbade
churches from participating in primary and secondary educa-


Mexico: A Country Study

tion. Article 5 prohibited the establishment of religious orders.
Article 24 mandated that all religious ceremonies occur within
church buildings. Article 27 gave the state ownership of all
church buildings.

Article 130 contained the most extensive restrictions on the
Roman Catholic Church. The article stated that the Roman
Catholic Church lacks legal status; ecclesiastical marriages have
no legal standing; state legislatures can determine the maxi-
mum number of clergy operating within their boundaries; and
operation of church buildings requires explicit government
authorization. Among the most contentious provisions of Arti-
cle 130 was Section 9: “Neither in public nor private assembly,
nor in acts of worship or religious propaganda shall the minis-
ters of the religions ever have the right to criticize the basic
laws of the country, of the authorities in particular or of the
government in general; they shall have neither an active nor
passive vote, nor the right to associate for political purposes.”

Beginning in 1926 and continuing until the late 1930s, vari-
ous federal and state administrations strenuously enforced
these constitutional edicts and related laws. Their actions
paved the way for the second Mexican religious war, the bloody
Cristero Rebellion of 1926-29 in western Mexico (see The
Calles Presidency, 1924-28, ch. 1). During this period, the gov-
ernor of Sonora ordered all churches closed, officials in the
state of Tabasco required priests to marry if they were to offici-
ate at mass, and the Chihuahua government allowed only one
priest to minister to the entire statewide Roman Catholic popu-

Church-state conflict officially ended with the administra-
tion of Manuel Avila Camacho (1940-46). With the notable
exception of Article 130, Section 9, the government tacitly
offered nonenforcement of key constitutional provisions in
exchange for the Roman Catholic Church’s cooperation in
achieving social peace. Over the next four decades, enforce-
ment of Article 130, Section 9, served the interests of both the
government and the Roman Catholic Church. The constitu-
tional restriction on ecclesiastical political participation
enabled the state to limit the activities of a powerful competi-
tor. It also permitted the Roman Catholic Church to sidestep
controversial political issues and to concentrate on rebuilding
its ecclesiastical structure and presence throughout the coun-


The Society and Its Environment

By the early 1980s, however, this unspoken consensus sup-
porting the legal status quo had eroded. The Roman Catholic
Church regarded the constitution’s anticlerical provisions,
especially those governing ecclesiastical political activity, as
anachronistic. It demanded the right to play a much more visi-
ble role in national affairs. At the same time, the church
became increasingly outspoken in its criticism of government
corruption. The Mexican bishops’ Global Pastoral Plan for
1980-1982, for example, contained a highly critical assessment
of the Mexican political system. According to the Roman Cath-
olic hierarchy, democracy existed only in theory in Mexico.
The ruling PRI monopolized power, producing apathy and
frustration among citizens and judicial corruption. The princi-
pal worker and peasant unions were subject to political control.
Peasants and Indians constituted an exploited, marginalized
mass barely living at a subsistence level and subject to continual
repression. During the mid-1980s, the bishops of Chihuahua
and Ciudad Juarez assumed prominent roles in denouncing
electoral fraud in northern Mexico. In the south, the bishops
of San Cristobal de las Casas and Tehuantepec frequently
accused the government of human rights violations.

The Roman Catholic Church hierarchy has emphasized that
its renewed interest in political affairs does not equate with
church involvement in party activities. According to the Mexi-
can episcopate, priests should be above all political parties and
may not become political leaders. However, the church hierar-
chy also argues that priests have a moral responsibility to
denounce actions that violate Christian morality.

The Salinas administration’s 1991 proposal to remove all
constitutional restrictions on the Roman Catholic Church, rec-
ommendations approved by the legislature the following year,
allowed for a more realistic church-state relationship. At the
same time, however, tensions remained in the relationship, par-
ticularly in southern Mexico in general and in Chiapas in par-
ticular. Local government and PRI officials and ranchers
accused the Bishop of San Cristobal de las Casas of having sup-
ported the rebellion that began in Chiapas in 1994, a charge
that the bishop denied. Federal soldiers repeatedly searched
diocesan churches in their pursuit of the rebels. The govern-
ment also expelled foreign clergy who were accused of inciting
violence and land seizures. In addition, the Vatican accused the
San Cristobal prelate of theological and pastoral distortions
and named a coadjutor (successor) bishop for the diocese in


Mexico: A Country Study

the mid-1990s. For their part, the rebels insisted that the
bishop continue to serve as mediator in their negotiations with
the federal government.

Popular Beliefs

Mexican Catholicism is extremely varied in practice. It
ranges from those who support traditional folk religious prac-
tices, usually in isolated rural communities, to those who
adhere to the highly intellectualized theology of liberation,
and from charismatic renewal prayer groups to the conserva-
tive Opus Dei movement. Lay groups with different goals, pur-
poses, and political orientations are well known and common
in contemporary Mexico. The largest and best known include
Mexican Catholic Action, Knights of Columbus, Christian
Study Courses, Christian Family Movement, and a wide range
of university students’ and workers’ organizations.

The Virgin of Guadalupe has long been a symbol enshrining
the major aspirations of Mexican society. According to Roman
Catholic belief, in December 1531, the Virgin Mary appeared
on three occasions to a Christian Indian woodcutter named
Juan Diego on the hill of Tepeyac, six kilometers north of
Mexico City’s main plaza. She spoke to him in the Nahuatl lan-
guage and identified herself by the name of Guadalupe. The
Virgin commanded Juan Diego to seek out Bishop Juan de
Zumarraga and to inform him of her desire to have a church
built in her honor on that spot. After two unsuccessful visits to
the bishop’s house, Juan Diego returned to Tepeyac and was
ordered by the Virgin to pick up some roses, carry them on his
cloak, and attempt to make a third visit to the skeptical bishop.
Once in the bishop’s office, Juan Diego unfolded his cloak to
present the roses, and an image of a mestizo Virgin had been
Tniraculously imprinted upon it. Bishop Zumarraga acknowl-
edged the miracle, and a shrine was built on the site of the

Today, two neighboring basilicas of Our Lady of Guadalupe
are at the foot of Tepeyac hill. The first basilica, which was ded-
icated in 1709 but now is closed to services, accommodated
2,000 worshipers; the new ultramodern basilica, inaugurated in
October 1976, accommodates up to 20,000 people. Juan
Diego’s original cloak with the mestizo Virgin image imprinted
on it hangs above the altar of the new basilica.

According to anthropologist Eric R. Wolf, the Guadalupe
symbol links family, politics, and religion; the colonial past and


The Society and Its Environment

the independent present; and the Indian and the Mexican. It
reflects the salient social relationships of Mexican life and
embodies the emotions they generate. It is, ultimately, a way of
talking about Mexico. Wolfs views are shared by Harvey L.
Johnson of the University of Houston. For him, worship of the
brown-skinned Virgin has resulted in the reconciliation of two
opposing worlds, in the fusion of two religions, two traditions,
and cultures. Devotion to Our Lady of Guadalupe remains
strong even as other aspects of Mexican society have changed.
The UNAM national opinion poll found, for example, that
nine out of ten Mexicans continued to ask intercessions from
the Virgin or a saint.


Despite impressive gains in enrollment levels over the previ-
ous forty years, significant interrelated problems plague the
Mexican education system in the early 1990s. Many primary-
and secondary-school-age students, especially in rural areas,
fail to complete their education programs. Instructional qual-
ity, as measured by student test scores, remains low. Although
operation of all nonuniversity education was given to the states
in 1993, the system continues to be overly centralized and sub-
ject to bureaucratic encumbrances. In addition, students are
often poorly prepared to meet the challenges of a global econ-

Approximately 27 million students attended school at all lev-
els during the 1995-96 instructional year, more than an eight-
fold increase from the enrollment total recorded in 1950. The
length of compulsory education was raised from six to nine
years in 1992, but in practice this new law is largely ignored.
Approximately 54 percent of all students attend a six-year pri-
mary-school program that, together with preschool, special
education, and secondary school, constitute the basic educa-
tion system. Children in nursery school or kindergarten
accounted for 12 percent of matriculation at all levels in 1995-
96. As the Mexican population gradually aged during the
1980s, the primary-school share of matriculation at all levels
declined from 70 percent in 1980 and was projected to con-
tinue to fall through the year 2000 (see Population, this ch.;
table 4, Appendix). Upon successful completion of primary
school, students enter a three-year secondary-school program,
or vocational-education program. Approximately 19 percent of
all students in 1995-96 were in secondary school. Those gradu-


Mexico: A Country Study

ating from secondary school can pursue mid-level education,
either through a three-year college preparatory program — the
bachillerato — or advanced technical training; this encompassed
10 percent of all students in 1995-96. Higher education con-
sists of four-year college and university education — the licencia-
tura — and postgraduate training. Approximately 5 percent of
all students in 1995-96 were in postsecondary institutions.

Higher education consists of three types: universities, tech-
nological colleges, and teacher-training institutes. There are
private and public institutions of all three types, but public
institutions are more numerous and usually larger, with over 80
percent of students attending public universities and colleges.
Each state has at least one public university, often having cam-
puses in different cities. The largest public university, the
National Autonomous University of Mexico (Universidad
Nacional Autonoma de Mexico — UNAM) in Mexico City, has
more than 100,000 students. Over ninety technological insti-
tutes had about 17 percent of the total higher education popu-
lation in 1994. Teacher-training institutes are separate from
general universities and generally offer a four-year curriculum.
Universities in fourteen states offer postgraduate courses, and
in 1991 over 28,000 students were enrolled in master’s degree
programs and 1,250 in doctoral studies. Most students pursu-
ing graduate work, however, do so outside Mexico.

Students’ access and retention remain critical concerns for
educators. The government reported in 1989 that each year,
300,000 children who should be in first grade do not attend.
An additional 880,000 students drop out of primary school
annually, 500,000 of them in the first three grades. Nationally,
in 1989 only 55 percent of students successfully completed
their primary education, and graduation rates were only 10
percent in many rural areas. However, the government
reported that in 1995 the national graduation rate reached 62

Approximately 15,000 schools — 20 percent of the total — did
not offer all six primary grades in 1989. In that year, 22 percent
of all primary schools had only one teacher. The government
could meet only 10 percent of potential demand for special
education. Thirty percent of all secondary-school enrollers
failed to complete the three-year curriculum. As a result, gov-
ernment education officials estimated that 20.2 million Mexi-
cans had not completed primary education and another 16
million had not finished secondary school.


The Society and Its Environment

The disparity in educational opportunity is reflected in
national literacy levels (see fig. 7). According to the 1990 cen-
sus, 86.8 percent of all Mexicans fifteen years of age and older
indicated that they could read and write. Two states in north-
ern Mexico — Baja California and Nuevo Leon — reported liter-
acy rates exceeding 95 percent, and several other northern
states and Mexico City indicated levels between 90 and 95 per-
cent. In contrast, Chiapas, Guerrero, and Oaxaca had literacy
levels below 75 percent. National literacy rates improved
slightly to 89 percent by 1995.

Besides issues of access and opportunity, observers expressed
concern about the quality of instruction. Anecdotal evidence
compiled from student test scores by one informed observer,
Gilberto Guevara Niebla, pointed to low academic achieve-
ment in numerous subjects, including mathematics, languages,
and geography. Observers also criticized the highly bureau-
cratic and centralized nature of Mexico’s education system,
which traditionally had been centralized. Until 1992 all pri-
mary schools, irrespective of regional distinctions, followed a
uniform program of study. Fearing a potential loss of political
influence, the powerful National Union of Education Workers
(Sindicato Nacional de Trabajadores de la Educacion — SNTE)
strongly opposed efforts to decentralize curriculum and pro-
gram management and retrain teachers. At the same time,
however, the government has earmarked few resources to eval-
uate school system performance. The result, according to edu-
cators, is a system that stifles student creativity.

The deficiencies in the basic education system tend to carry
over into public postsecondary education. Observers have
identified numerous deficiencies, including faculty salaries,
limited research opportunities, and inadequate instructional
facilities and curricula. As a result, many employers increas-
ingly look to private educational institutions to provide quali-
fied professional staff.

Responding to these problems, the government established
in 1992 the National Accord on the Modernization of Basic
Education. Under the accord, the federal government trans-
ferred responsibility for primary schools’ staff and funding to
the states. The federal government, through the Secretariat of
Public Education (Secretaria de Educacion Publica — SEP),
retains authority to establish national policies and to assist
schools in poor districts. In addition, a revamped curriculum
places renewed emphasis on basic skills, such as reading, writ-


Mexico: A Country Study

ing, and mathematics. The states, for their part, have agreed to
commit additional resources to improve teacher salaries and

Health Care and Social Security

In the early 1990s, Mexico showed clear signs of having
entered a transitional stage in the health of its population.
When compared with 1940 or even 1970, Mexico in the 1990s
exhibited mortality patterns that more closely approximated
those found in developed societies (see table 5, Appendix).
Health officials have also reported substantial reductions in
morbidity rates for several diseases typically prevalent in poorer

At the same time, however, government officials recognize
that this transition is, at best, incomplete. Diseases associated
with unsanitary living conditions, minimal access to health
care, or inadequate diet continue to affect those in the lowest
economic strata. Reductions in government health care expen-
ditures during the economic crisis of the 1980s slowed progress
in several areas. In addition, persistent underreporting of dis-
eases in rural areas masks the true dimension of the health
care challenge.

Mexico’s social security program provides health care to for-
mal-sector workers and their families, some 50 percent of the
national population in 1995. This figure represented a drop
from the 56 percent coverage rate in 1992. The Mexican Insti-
tute of Social Security (Instituto Mexicano de Seguro Social —
IMSS) covers approximately 80 percent of these beneficiaries
(all employed in the private sector). The Institute of Security
and Social Services for State Workers (Instituto de Seguridad y
Servicios Sociales para los Trabajadores del Estado — ISSSTE)
covers government workers and accounts for 17 percent of the
beneficiaries. The Secretariat of National Defense (Secretana
de Defensa Nacional), the Secretariat of the Navy (Secretana
de Marina), and Mexican Petroleum (Petroleos Mexicanos —
Pemex) have their own health programs, which cover military
and naval personnel, and petroleum workers, respectively (see
Personnel, ch. 5). A tripartite funding arrangement finances
IMSS operations, with contributions from the employee,
employer, and government. ISSSTE programs, as well as those
offered by the military and Pemex, are financed through
employee and government contributions.





The Society and Its Environment

Those outside the social security network — the so-called
“open population” — receive health care from a wide array of
government agencies. Approximately one-third of the popula-
tion is served by IMSS-Solidarity (IMSS-Solidaridad), the suc-
cessor of IMSS-Coplamar (see Structure of Society, this ch.)
IMSS-Solidarity is funded by general government revenues,
although IMSS provides administrative direction. As part of
President de la Madrid’s decentralization effort and corre-
sponding federal budget reduction, the population served by
IMSS-Coplamar in fourteen states was reassigned to state
health agencies under the overall direction of the Secretariat
of Health (Secretaria de Salud — SS). The SS also serves as
coordinator of the National Health System, which includes the
health programs offered by the social security agencies. In
keeping with its commitment to a new federal partnership, the
Zedillo administration announced that it would transfer facili-
ties and operations of IMSS-Solidaridad and the SS to the states
in 1996.

Social security beneficiaries had greater access to health care
than did their counterparts among the open population. In
1995 the rates of doctors and hospital beds per 100,000 persons
stood at 121 and ninety, respectively, for social security benefi-
ciaries but only 105 and eighty, respectively, for the open popu-
lation. Social security beneficiaries were also nearly twice as
likely as the open population to have consulted a doctor dur-
ing 1995 and twice as likely to have had surgery that year.

Notable regional disparities in health care are also evident.
In 1983 the government surveyed health care access nation-
wide as measured by thirteen basic indicators, including medi-
cal facilities, prenatal consultation, medical attention to various
illnesses, and vaccination programs. The Federal District and
three northern and northwestern states — Coahuila, Colima,
and Nuevo Leon — recorded levels exceeding eighty out of a
possible 100 points. In contrast, Oaxaca, Chiapas, and Puebla
in southern and central Mexico averaged between forty and
fifty points. Guerrero in the southwest posted a score of only

Mortality Patterns

In 1940 infectious, parasitic, and respiratory illnesses
accounted for nearly 70 percent of all deaths in Mexico. Three
decades later, these illnesses still produced more than half of
all deaths. By 1990, however, their share of the overall mortality


Figure 7. Literacy Level (Fifteen Years of Age and Older) by State, 1990

Mexico: A Country Study

level had dropped to around 20 percent. Cardiovascular ill-
nesses, cancer, accidents, diabetes mellitus, and perinatal com-
plications emerged as the top causes of death in 1990, a sharp
change from the previous pattern. Yet despite the progress,
health officials recognize the continuing serious threat posed
by infectious, parasitic, and respiratory illnesses. Two such ill-
nesses — pneumonia and influenza — and intestinal infections
remained within the top ten causes of death in 1990. Among
the twenty leading causes of death were such maladies as nutri-
tional deficiencies, chronic bronchitis, measles, tuberculosis,
anemia, and severe respiratory infections.

Government census data record a continuous and signifi-
cant decline in infant mortality from 1930 to 1980 (see table 6,
Appendix). The infant mortality rate stood at 145.6 deaths per
1,000 registered live births in 1930. It dropped to 96.2 by 1950,
to 68.5 in 1970, and to 40.0 in 1990.

Wide regional variations in infant mortality levels persisted
into the 1990s. The 1990 census indicated, for example, that
infant mortality rates clustered around the mid-twenties in Baja
California Norte, Baja California Sur, the Federal District, and
Tamaulipas, and the mid-fifties in Oaxaca, Guerrero, Puebla,
and Chiapas (see fig. 8). Even more dramatic variations could
be found across municipalities. In general, the lowest levels
appeared in highly urban municipalities, especially state capi-
tals and metropolitan areas. In contrast, the highest rates typi-
cally were associated with remote, rural, and largely Indian

Nationally, 52 percent of all recorded infant deaths in 1990
occurred during the postneonatal stage, when infants are most
susceptible to infections and poor diet. Although perinatal
complications accounted for 35 percent of all infant deaths in
1990, intestinal infections and influenza and pneumonia also
remained important causes, representing 15 and 13 percent of
infant deaths, respectively.

The government reported significant reductions between
1980 and 1990 in early childhood mortality. Early childhood
mortality declined from 3.4 per 1,000 preschoolers in 1980 to
2.4 in 1990. Intestinal infections headed the list of causes of
death, followed by measles, pneumonia and influenza, and
nutritional deficiencies. Preliminary figures for 1991 suggested
a sharp decline in early childhood mortality to 1.6 per 1,000
preschoolers. The 1991 figures pointed to notable statewide
variations, with rates below one in Coahuila, Durango, Sinaloa,







The Society and Its Environment

Sonora, Tamaulipas, and the Federal District, and above three
in Chiapas, Oaxaca, and Puebla.

Maternal mortality also declined over the same period, with
rates falling from 9.4 deaths per 10,000 registered live births in
1980 to 5.4 in 1990, and to 5.1 in preliminary 1991 data. Baja
California Sur reported no maternal deaths in 1991, with sev-
eral, mostly northern states — Chihuahua, Coahuila, Durango,
Jalisco, Nayarit, Nuevo Leon, Sinaloa, Tabasco, and Tamauli-
pas — indicating rates below three deaths per 10,000 registered
live births. In sharp contrast stood Oaxaca, with a rate exceed-
ing fourteen deaths per 10,000 registered live births.

Morbidity Patterns

Although infectious diarrhea and severe respiratory infec-
tions have declined significantly as causes of mortality, they
remain major illnesses in the early 1990s. Reported cases of
infectious diarrhea escalated dramatically from 1,661 per
100,000 residents in 1980 to 2,906 in 1990, and to 4,685 in
1991. During the same period, severe respiratory infections
climbed from 3,334 cases per 100,000 residents in 1980 to
10,800 in 1990, and to 13,732 in 1991.

Mexican health officials reported substantial progress in
relation to several illnesses controllable by vaccination. Pertus-
sis declined from 122.6 cases per 100,000 residents in 1930 to
4.4 cases in 1980, to 1.3 cases in 1990, and to only 0.2 cases in
1991. Chiapas’s rate in 1991 stood at ten times the national
average, however. The total number of cases of poliomyelitis
declined from 682 in 1980 to seven in 1990 and to zero in 1991.
The government recorded only a single case of diphtheria in
1991. Measles epidemics continued to occur, with rates surging
from 24.2 cases per 100,000 residents to 80.2 in 1990 before
falling sharply to 5.9 in 1991. Even here, however, improve-
ment over past decades could be noted because epidemics
occurred only every four or five years as compared with the
previous pattern of occurring every other year. Somewhat less
progress was apparent in the campaign against tuberculosis,
with rates declining from 16.1 cases per 100,000 residents in
1980 to 14.3 in 1990.

Vector-transmitted illnesses remain major public health chal-
lenges, especially in southern Mexico. Malaria increased dra-
matically from 36.9 cases per 100,000 residents in 1980 to 171.5
cases in 1985, before dropping to 31.1 in 1991. Chiapas,
Oaxaca, Guerrero, Michoacan, and Sinaloa are priority areas


Source: Based on information from Mexico, National Institute of Statistics, Geography, and Informatics, Estados Unidos Mexicanos: Resumen general. XI censo
general de poblacion y vivienda, 1990, Aguascalientes, 1992, 3.

Figure 8. Infant Mortality by State, 1990


Mexico: A Country Study

for government antimalarial campaigns. After not a single case
of onchocerciasis was reported in 1980 and 1985, the disease
reemerged in the late 1980s. Health officials identified 2,905
cases in 1987 and 1,238 cases in 1991, most of them in Oaxaca
and Chiapas. In contrast, significant progress occurred in the
reduction of dengue, with cases per 100,000 residents declin-
ing from 73.8 in 1980 to 6.9 in 1991. The disease is found along
the Gulf of Mexico and Pacific coastal regions, the mouth of
the Rio Balsas, and central Chiapas.

Although most sexually transmitted diseases declined
throughout the 1980s, acquired immune deficiency syndrome
(AIDS) proved a glaring and deadly exception. Mexico
reported its first cases of AIDS in 1983. Both the total number
of cases and the ratio increased annually through 1993. In 1993
the government reported 5,095 new cases, or 5.4 cases per
100,000 residents.

Social Security

Mexico’s social security agencies are financed through con-
tributions from members, employers, and the government. In
the mid-1990s, contributions averaged around 25 percent of
members’ salaries. Although informal-sector workers may sub-
scribe to the IMSS, they are effectively prevented from doing so
because they must pay not only their own share but that of
their employers as well. Members are eligible for a wide array
of benefits including pension, disability, and maternity cover-
age. A variety of other services are also available to all Mexi-
cans, including theaters, vacation centers, funeral parlors, and
day-care centers. Approximately 1.5 million Mexicans received
monthly pensions in the mid-1990s, a higher figure than in pre-
vious decades, reflecting gains in average life expectancy.

An actuarial crisis is expected to threaten the fiscal solvency
of the social security system by the early twenty-first century.
Analyst Carmelo Mesa-Lago has noted numerous problems
confronting the system, including rising administrative expen-
ditures, redundant physical plants, the high costs of complex
medical technology for IMSS’s approximately 1,700 hospitals,
and continual transfers of pension funds to cover deficits in dis-
ability and maternity programs. In early 1996, IMSS projected
its first annual budget deficit. In December 1995, the legisla-
ture approved a plan to enhance the viability of social security
by expanding its contributory base from the informal sector. In
addition, Mexicans can establish privately operated individual


The Society and Its Environment

retirement accounts. That element of the plan, to take effect in
January 1997, was also designed to increase domestic savings to
finance future economic growth.

Despite impressive gains in the health care system during the
second half of the twentieth century, Mexico’s health care and
education systems and, indeed, its entire society remain in a
profound state of transition. The population of states in north-
ern Mexico and many urban areas exhibits social indicators on
a par with those of developed countries, whereas statistics for
southern Mexico and most rural areas are comparable to those
of the developing world. One of the key challenges for Mexico
in the twenty-first century, therefore, will be to meet the needs
of a rapidly expanding and urbanizing population while con-
tinuing to improve living conditions for the many disadvan-
taged segments of its society.

* * *

The various publications of the government’s National Insti-
tute of Statistics, Geography, and Informatics provide invalu-
able statistical data on Mexican society. Complete discussions
of major environmental issues can be found in the edited work
of Enrique Leff, Medio ambiente y desarrollo en Mexico, and in
Poblacion, recur sos, y medio ambiente en Mexico, authored by Vice-
nte Sanchez, Margarita Castillejos, and Lenora Rojas Bracho.
Alan R. Sandstorm’s Corn Is Our Blood: Culture and Ethnic Identity
in a Contemporary Aztec Indian Village offers an excellent intro-
duction to Indian values and attitudes. Alan Gilbert and Peter
M. Ward’s Housing, the State and the Poor: Policy and Practice in
Three Latin American Cities, and Gilbert’s edited volume, Hous-
ing and Land in Urban Mexico, comprehensively examine issues
surrounding Mexico’s self-help communities. Juan Manuel
Ramirez Saiz’s edited work, Normas y prdcticas morales y civicas en
la vida cotidiana, provides a penetrating look at interpersonal
relations in Mexico. On the same topic, the edited volume of
Alberto Hernandez Medina and Luis Narro Rodriguez, Como
somos los mexicanos, presents rich statistical data of a national
survey conducted by the Center for Educational Studies. Conti-
nuities and changes in Mexican attitudes in the mid-1990s are
ably documented in the UNAM-sponsored Los mexicanos de los
noventa. Gilberto Guevara Niebla’s edited collection, La
catdstrofe silenciosa, is indispensable reading on the problems
besetting the Mexican education system. La salud en Mexico: Tes-


Mexico: A Country Study

timonios 1988, edited by Guillermo Soberon, Jesus Kumate, and
Jose Laguna, offers thorough coverage of Mexico’s health care
system. The Mexican government’s internet home page,, also contains extensive information on
social policy and has links to the various secretariats. (For fur-
ther information and complete citations, see Bibliography.)


A representation of Mexican campesinos, from a painting by Diego Rivera

FROM THE 1940s UNTIL THE MID-1970S, the Mexican econ-
omy enjoyed strong growth averaging more than 6 percent, sin-
gle-digit inflation, and relatively low external indebtedness.
These conditions all began to change during the 1970s. Expan-
sionary government policies generated higher inflation and
severe external payments problems while failing to produce
sustained growth. Government spending outpaced revenues,
generating steep budget deficits and increased external indebt-
edness. Low real interest rates also discouraged domestic sav-

A brief financial and economic crisis in 1976 signaled the
need to address the economy’s fundamental problems, but sub-
sequent petroleum discoveries reduced incentives for reform
and postponed the inevitable day of reckoning. The govern-
ment expanded its debt-financed spending in the late 1970s in
anticipation of continued low interest rates and high oil reve-
nue. It also maintained a highly overvalued peso (for value of
the peso — see Glossary), aggravating balance of payments
problems, undermining private-sector confidence, and encour-
aging capital flight.

External conditions turned sharply against Mexico in the
early 1980s, producing a deep recession that forced a funda-
mental change in the country’s decades-old development strat-
egy. Higher interest rates and falling oil prices combined with
rising inflation, massive capital flight, and an unserviceable for-
eign debt to provoke an economic collapse. Lacking access to
international capital markets, the government of Miguel de la
Madrid Hurtado (1982-88) had to generate huge nonoil trade
surpluses to restore macroeconomic balance. Import volume
fell sharply at the expense of fixed investment and consump-
tion. As a result of the government’s stringent economic stabili-
zation program, the fiscal deficit was eliminated, international
reserves rebuilt, and export growth restored, but at the cost of
lower real wages and extensive unemployment. Economic out-
put remained flat between 1983 and 1988, and inflation
remained high, reaching more than 140 percent in 1987. Real
exchange-rate depreciation boosted the country’s debt-to-gross
domestic product (GDP — see Glossary) ratio by almost 30 per-
centage points between 1982 and 1987.


Mexico: A Country Study

To control persistently high inflation and restore growth and
international competitiveness, the government pursued a
major policy reorientation in the late 1980s. It reduced state
involvement in economic production and regulation and inte-
grated Mexico more fully into the world economy. An anti-
inflation plan was introduced in late 1987 under which the gov-
ernment, the private sector, and organized labor agreed to
limit wage and price increases. In 1989 the government
reached agreement with its external creditors on extensive
debt restructuring and reduction.

In an effort to restore self-sustaining growth, the administra-
tion of Carlos Salinas de Gortari (1988-94) boosted investment
as a share of GDP. It also accelerated the privatization of state-
owned productive enterprises, both to raise state revenue and
to promote economic restructuring and modernization. The
government eased foreign investment regulations, stabilized
the currency, deregulated the prices of most goods, and
enacted extensive trade liberalization measures, including the
reduction or elimination of import barriers and the pursuit of
free-trade agreements with Mexico’s trading partners, espe-
cially the United States.

The Salinas government allowed the currency to become
increasingly overvalued during 1994, despite mounting trade
and current account deficits resulting from trade liberalization
and economic growth. It kept real interest rates high to ensure
sufficient inflows of foreign (mainly short-term portfolio)
investment to cover the current account deficit. During 1994
the government treasury issued a large number of dollar-
denominated bonds (tesebonos) to reinforce its capital position.

By the end of 1994, the almost total disappearance of
Mexico’s international reserves made the government’s
exchange-rate policy no longer tenable. The new administra-
tion of President Ernesto Zedillo Ponce de Leon was forced in
December 1994 to devalue the new peso (for value of the new
peso — see Glossary), despite promises to the contrary. The gov-
ernment’s mismanaged new peso devaluation cost the currency
nearly half of its value and the government much of its credibil-
ity and popular support. Inflation and interest rates rose
sharply in subsequent weeks, throwing millions of Mexicans
out of work and putting many consumer goods beyond the
reach of the middle class, to say nothing of the impoverished
majority. Public and private investment plummeted, and
Mexico entered its worst economic recession since the 1930s.


The Economy

By early 1996, however, the economy had begun to recover, as
capital inflows increased and most productive sectors regis-
tered positive growth rates.

Growth and Structure of the Economy
Early Years

The Mexican wars of independence (1810-21) left a legacy
of economic stagnation that persisted until the 1870s. Political
instability and foreign invasion deterred foreign investment,
risk-taking, and innovation. Most available capital left with its
Spanish owners following independence. Instead of investing
in productive enterprises and thereby spurring economic
growth, many wealthy Mexicans converted their assets into tan-
gible, secure, and often unproductive property.

The seeds of economic modernization were laid under the
restored Republic (1867-76) (see The Restoration, 1867-76,
ch. 1). President Benito Juarez (1855-72) sought to attract for-
eign capital to finance Mexico’s economic modernization. His
government revised the tax and tariff structure to revitalize the
mining industry, and it improved the transportation and com-
munications infrastructure to allow fuller exploitation of the
country’s natural resources. The government let contracts for
construction of a new rail line northward to the United States,
and it completed the commercially vital Mexico City-Veracruz
railroad, begun in 1837. Protected by high tariffs, Mexico’s tex-
tile industry doubled its production of processed items
between 1854 and 1877. But overall, manufacturing grew only
modestly, and economic stagnation continued.

During the Porfiriato (1876-1910), however, Mexico under-
went rapid and sustained growth, and laid the foundations for
a modern economy. Taking “order and progress” as his watch-
words, President Jose de la Cruz Porfirio Diaz established the
rule of law, political stability, and social peace, which brought
the increased capital investment that would finance national
development and modernization. Rural banditry was sup-
pressed, communications and transportation facilities were
modernized, and local customs duties that had hindered
domestic trade were abolished.

Revolution and Aftermath

The Mexican Revolution (1910-20) severely disrupted the
Mexican economy, erasing many of the gains achieved during


Mexico: A Country Study

the Porfiriato. The labor force declined sharply, with the eco-
nomically active share of the population falling from 35 per-
cent in 1910 to 31 percent in 1930. Between 1910 and 1921, the
population suffered an overall net decline of 360,000 people.
The livestock supply was severely depleted, as thousands of cat-
tle were lost to the depredations of rival militias. Cotton, cof-
fee, and sugarcane went unharvested as workers abandoned
the fields either to join or flee the fighting. The result was a
precipitous drop in agricultural output. The disruption of com-
munications and rail transportation made distribution unreli-
able, prompting further reductions in the production of
perishable goods. As agricultural and manufacturing output
declined, black markets flourished in the major cities. The
banking system was shattered, public credit disappeared, and
the currency was destroyed. The mining sector suffered huge
losses, with gold production falling some 80 percent between
1910 and 1916, and silver and copper output each declining 65

The Great Depression

The Great Depression brought Mexico a sharp drop in
national income and internal demand after 1929, challenging
the country’s ability to fulfill its constitutional mandate to pro-
mote social equity. Still, Mexico did not feel the effects of the
Great Depression as directly as some other countries did.

In the early 1930s, manufacturing and other sectors serving
the domestic economy began a slow recovery. The upturn was
facilitated by several key structural reforms, notably the rail-
road nationalization of 1929 and 1930, the nationalization of
the petroleum industry in 1938, and the acceleration of land
reform, first under President Emilio Portes Gil (1928-30) and
then under President Lazaro Cardenas (1934-40) in the late
1930s. To foster industrial expansion, the administration of
Manuel Avila Camacho (1940-46) in 1941 reorganized the
National Finance Bank (Nacional Financiera — Nafinsa) , which
had originally been created in 1934 as an investment bank.

During the 1930s, agricultural production also rose steadily,
and urban employment expanded in response to rising domes-
tic demand. The government offered tax incentives for produc-
tion directed toward the home market. Import-substitution
industrialization (see Glossary) began to make a slow advance
during the 1930s, although it was not yet official government


The Economy

Postwar Economic Growth

Mexico’s inward-looking development strategy produced sus-
tained economic growth of 3 to 4 percent and modest 3 per-
cent inflation annually from the 1940s until the late 1960s. The
government fostered the development of consumer goods
industries directed toward domestic markets by imposing high
protective tariffs and other barriers to imports. The share of
imports subject to licensing requirements rose from 28 percent
in 1956 to an average of more than 60 percent during the
1960s and about 70 percent in the 1970s. Industry accounted
for 22 percent of total output in 1950, 24 percent in 1960, and
29 percent in 1970. The share of total output arising from agri-
culture and other primary activities declined during the same
period, while services stayed constant. The government pro-
moted industrial expansion through public investment in agri-
cultural, energy, and transportation infrastructure. Cities grew
rapidly during these years, reflecting the shift of employment
from agriculture to industry and services. The urban popula-
tion increased at a high rate after 1940 (see Urban Society, ch.
2). Growth of the urban labor force exceeded even the growth
rate of industrial employment, with surplus workers taking low-
paying service jobs.

In the years following World War II, President Miguel Ale-
man Valdes’s (1946-52) full-scale import-substitution program
stimulated output by boosting internal demand. The govern-
ment raised import controls on consumer goods but relaxed
them on capital goods, which it purchased with international
reserves accumulated during the war. The government pro-
gressively undervalued the peso to reduce the costs of
imported capital goods and expand productive capacity, and it
spent heavily on infrastructure. By 1950 Mexico’s road network
had expanded to 21,000 kilometers, of which some 13,600 were

Mexico’s strong economic performance continued into the
1960s, when GDP growth averaged about 7 percent overall and
about 3 percent per capita. Consumer price inflation averaged
only 3 percent annually. Manufacturing remained the coun-
try’s dominant growth sector, expanding 7 percent annually
and attracting considerable foreign investment. Mining grew at
an annual rate of nearly 4 percent, trade at 6 percent, and agri-
culture at 3 percent. By 1970 Mexico had diversified its export
base and become largely self-sufficient in food crops, steel, and


Mexico: A Country Study

most consumer goods. Although its imports remained high,
most were capital goods used to expand domestic production.

Deterioration in the 1 970s

Although the Mexican economy maintained its rapid growth
during most of the 1970s, it was progressively undermined by
fiscal mismanagement and a resulting sharp deterioration of
the investment climate. The GDP grew more than 6 percent
annually during the administration of President Luis Echeve-
rna Alvarez (1970-76), and at about a 6 percent rate during
that of his successor, Jose Lopez Portillo y Pacheco (1976-82).
But economic activity fluctuated wildly during the decade, with
spurts of rapid growth followed by sharp depressions in 1976
and 1982.

Fiscal profligacy combined with the 1973 oil shock to exacer-
bate inflation and upset the balance of payments. Moreover,
President Echeverria’s leftist rhetoric and actions — such as
abetting illegal land seizures by peasants — eroded investor con-
fidence and alienated the private sector. The balance of pay-
ments disequilibrium became unmanageable as capital flight
intensified, forcing the government in 1976 to devalue the
peso by 45 percent. The action ended Mexico’s twenty-year
fixed exchange rate.

Although significant oil discoveries in 1976 allowed a tempo-
rary recovery, the windfall from petroleum sales also allowed
continuation of Echeverria’s destructive fiscal policies. In the
mid-1970s, Mexico went from being a net importer of oil and
petroleum products to a significant exporter. Oil and petro-
chemicals became the economy’s most dynamic growth sector.
Rising oil income allowed the government to continue its
expansionary fiscal policy, partially financed by higher foreign
borrowing. Between 1978 and 1981, the economy grew more
than 8 percent annually, as the government spent heavily on
energy, transportation, and basic industries. Manufacturing
output expanded modestly during these years, growing by 9
percent in 1978, 9 percent in 1979, and 6 percent in 1980.

This renewed growth rested on shaky foundations. Mexico’s
external indebtedness mounted, and the peso became increas-
ingly overvalued, hurting nonoil exports in the late 1970s and
forcing a second peso devaluation in 1980. Production of basic
food crops stagnated, forcing Mexico in the early 1980s to
become a net importer of foodstuffs. The portion of import
categories subject to controls rose from 20 percent of the total


The Economy

in 1977 to 24 percent in 1979. The government raised tariffs
concurrently to shield domestic producers from foreign com-
petition, further hampering the modernization and competi-
tiveness of Mexican industry.

1982 Crisis and Recovery

The macroeconomic policies of the 1970s left Mexico’s econ-
omy highly vulnerable to external conditions. These turned
sharply against Mexico in the early 1980s, and caused the worst
recession since the 1930s. By mid-1981, Mexico was beset by
falling oil prices, higher world interest rates, rising inflation, a
chronically overvalued peso, and a deteriorating balance of
payments that spurred massive capital flight. This disequilib-
rium, along with the virtual disappearance of Mexico’s interna-
tional reserves — by the end of 1982 they were insufficient to
cover three weeks’ imports — forced the government to devalue
the peso three times during 1982. The devaluation further
fueled inflation and prevented short-term recovery. The deval-
uations depressed real wages and increased the private sector’s
burden in servicing its dollar-denominated debt. Interest pay-
ments on long-term debt alone were equal to 28 percent of
export revenue. Cut off from additional credit, the govern-
ment declared an involuntary moratorium on debt payments
in August 1982, and the following month it announced the
nationalization of Mexico’s private banking system.

By late 1982, incoming President Miguel de la Madrid had to
reduce public spending drastically, stimulate exports, and fos-
ter economic growth to balance the national accounts. Recov-
ery was extremely slow to materialize, however. The economy
stagnated throughout the 1980s as a result of continuing nega-
tive terms of trade, high domestic interest rates, and scarce
credit. Widespread fears that the government might fail to
achieve fiscal balance and have to expand the money supply
and raise taxes deterred private investment and encouraged
massive capital flight that further increased inflationary pres-
sures. The resulting reduction in domestic savings impeded
growth, as did the government’s rapid and drastic reductions in
public investment and its raising of real domestic interest rates
to deter capital flight.

Mexico’s GDP grew at an average rate of just 0.1 percent per
year between 1983 and 1988, while inflation stayed extremely
high (see table 7, Appendix). Public consumption grew at an
average annual rate of less than 2 percent, and private con-


Mexico: A Country Study

sumption not at all. Total investment fell at an average annual
rate of 4 percent and public investment at an 11 percent pace.
Throughout the 1980s, the productive sectors of the economy
contributed a decreasing share to GDP, while the services sec-
tors expanded their share, reflecting the rapid growth of the
informal economy. De la Madrid’s stabilization strategy
imposed high social costs: real disposable income per capita
fell 5 percent each year between 1983 and 1988. High levels of
unemployment and underemployment, especially in rural
areas, stimulated migration to Mexico City and to the United

By 1988 inflation was at last under control, fiscal and mone-
tary discipline attained, relative price adjustment achieved,
structural reform in trade and public-sector management
underway, and the preconditions for recovery in place. But
these positive developments were inadequate to attract foreign
investment and return capital in sufficient quantities for sus-
tained recovery. A shift in development strategy became neces-
sary, predicated on the need to generate a net capital inflow.

In April 1989, President Carlos Salinas de Gortari an-
nounced his government’s national development plan for
1989-94, which called for annual GDP growth of 6 percent and
an inflation rate similar to those of Mexico’s main trading part-
ners. Salinas planned to achieve this sustained growth by boost-
ing the investment share of GDP and by encouraging private
investment through denationalization of state enterprises and
deregulation of the economy. His first priority was to reduce
Mexico’s external debt; in mid-1989 the government reached
agreement with its commercial bank creditors to reduce its
medium- and long-term debt. The following year, Salinas took
his next step toward higher capital inflows by lowering domes-
tic borrowing costs, reprivatizing the banking system, and
broaching the idea of a free-trade agreement with the United
States. These announcements were soon followed by increased
levels of capital repatriation and foreign investment.

After rising impressively during the early years of Salinas’s
presidency, the growth rate of real GDP began to slow during
the early 1990s. During 1993 the economy grew by a negligible
amount, but growth rebounded to almost 4 percent during
1994, as fiscal and monetary policy were relaxed and foreign
investment was bolstered by United States ratification of the
North American Free Trade Agreement (NAFTA). In 1994 the
commerce and services sectors accounted for 22 percent of


The Economy

Mexico’s total GDP. Manufacturing followed at 20 percent;
transport and communications at 10 percent; agriculture, for-
estry, and fishing at 8 percent; construction at 5 percent; min-
ing at 2 percent; and electricity, gas, and water at 2 percent (see
fig. 9). Some two-thirds of GDP in 1994 (67 percent) was spent
on private consumption, 11 percent on public consumption,
and 22 percent on fixed investment. During 1994 private con-
sumption rose by 4 percent, public consumption by 2 percent,
public investment by 9 percent, and private investment by 8

However, the collapse of the new peso in December 1994
and the ensuing economic crisis caused the economy to con-
tract by an estimated 7 percent during 1995. Investment and
consumption both fell sharply, the latter by some 10 percent.
Agriculture, livestock, and fishing contracted by 4 percent;
mining by 1 percent; manufacturing by 6 percent; construction
by 22 percent; and transport, storage, and communications by
2 percent. The only sector to register positive growth was utili-
ties, which expanded by 3 percent.

By 1996 Mexican government and independent analysts saw
signs that the country had begun to emerge from its economic
recession. The economy contracted by a modest 1 percent dur-
ing the first quarter of 1996. The Mexican government
reported strong growth of 7 percent for the second quarter,
and the Union Bank of Switzerland forecast economic growth
of 4 percent for all of 1996.

Macroeconomic Management

In the 1940s, Mexico adopted a state-led development strat-
egy that relied on public-sector investment to integrate the
national economy. Under the policy of “stabilizing develop-
ment,” the state promoted industrialization by encouraging
import substitution, mobilizing domestic savings, and directing
state credit toward priority investment projects. It followed con-
servative policies on interest and exchange rates in order to
attract external capital to support industrialization. During the
1940s and 1950s, the government channeled public investment
toward the agricultural sector, and especially into large-scale
irrigation projects. During the 1960s, public spending was redi-
rected toward expanding the nation’s industrial capacity.

Although social infrastructure, such as medical and educa-
tional facilities, received some 25 percent of public spending,
income distribution became steadily more unequal during the


Mexico: A Country Study

1994 GDP = US$370 billion

Source: Based on information from Economist Intelligence Unit, Country Report:
Mexico, London, No. 1, 1996, 3.

Figure 9. Gross Domestic Product (GDP) by Sector, 1994

postwar decades, and the social needs of the rural poor went
largely unaddressed. Popular acceptance of Mexico’s post-1940
development strategy began to wane by 1970 as its inegalitarian
consequences became clear. As public pressure for state redress
of social needs rose, presidents Echeverria and Lopez Portillo
turned to destructive fiscal policies that nearly bankrupted the
state and contributed to Mexico’s economic collapse in the
early 1980s.

After taking power in 1970, Echeverria turned away from the
policy of “stabilizing development” that had closely linked
Mexico’s economic fortunes to those of the private sector. By
expanding the state’s role in directing and regulating eco-
nomic activity, Echeverria hoped to promote both equity and
prosperity while easing political pressures on the state. Higher
public spending was also intended to alleviate the social and


The Economy

political tensions that had found violent expression in the riots
at the Plaza of the Three Cultures in Tlatelolco in 1968 and
threatened continued Institutional Revolutionary Party
(Partido Revolucionario Institucional — PRI) rule (see Recon-
ciliation and Redistribution, 1970-76, ch. 1).

Echeverna’s improvidence produced a growing fiscal imbal-
ance, which he financed through foreign borrowing. Mexico’s
public-sector deficit rose sharply from 2 percent of GDP in
1970 to 7 percent by 1976. Under Echeverria, Mexico resorted
for the first time to massive external borrowing to finance
these deficits. Extensive oil discoveries in the mid-1970s gave
Mexico access to almost unlimited foreign credits, allowing the
government to contract huge loans to finance the fiscal and
trade deficits. The share of public-sector spending financed by
debt rose from 32 percent in 1971 to 50 percent by 1977. The
looming fiscal crisis, together with the president’s intemperate
rhetorical assaults on the private sector, undermined business
confidence and soured the investment climate. The govern-
ment’s determination to maintain a fixed exchange rate
despite rising inflation undermined the competitiveness of
domestic production, discouraged new investment, and
encouraged capital flight.

By the mid-1970s, the balance of payments disequilibrium
had become unmanageable. Inflation increased from 3 per-
cent in 1969 to an annual average of 17 percent between 1973
and 1975. The fiscal deficit rose from 3 percent of GDP in 1971
to 10 percent in 1975. During those same years, the current
account deficit rose from US$0.9 billion to US$4.4 billion, and
the foreign public debt more than doubled from US$6.7 bil-
lion to US$15.7 billion. The private sector responded with mas-
sive capital flight, both to protect against the expected peso
devaluation and to protest Echeverna’s attacks on the private

By 1976 the government could no longer ignore the crisis.
Complying with International Monetary Fund (IMF — see Glos-
sary) requirements for contingency lending and private-sector
demands, the government curbed the expansion of state indus-
try and public-sector spending, restricted credit, and forced
the economy into recession. In August 1976, the government
allowed the peso to float, ending more than twenty years of
exchange-rate stability. The peso quickly depreciated by almost
40 percent against the dollar.


Mexico: A Country Study

Although the discovery of massive new petroleum deposits
in 1977 briefly alleviated the fiscal pressures weighing upon the
government, it also led officials to abandon their newly
acquired habits of fiscal restraint (see Recovery and Relapse,
ch. 1). The fiscally expansionist Secretariat of Programming
and Budget (Secretana de Programacion y Presupuesto — SPP),
which had been established in 1977 and given responsibility for
public investment planning, grew in influence at the expense
of technocrats from the Central Bank and Treasury Ministry,
who were more concerned with maintaining macroeconomic
efficiency and stability.

The denouement of Lopez Portillo’s expansionary policies
came in mid-1981. International interest rates rose and oil
prices fell. Capital flight accelerated as the government
defended the increasingly overvalued peso through short-term
external borrowing. Despite the warning signs, Lopez Portillo
decided to postpone adjustment measures and maintain exist-
ing policy.

In late 1982, the incoming administration of President de la
Madrid faced a raft of challenges: huge fiscal imbalances,
unsympathetic creditor banks, an alienated private sector, and
international institutions inexperienced in managing a global
debt crisis (see The de la Madrid Sexenio, 1982-88, ch. 1).
Mexico’s public-sector deficit in 1982 amounted to 18 percent
of GDP. Total public spending amounted to nearly 47 percent
of GDP, compared with only 30 percent in 1977, while public-
sector revenue rose during the same period from 24 percent of
GDP in 1977 to only 30 percent in 1982. Both production and
economic growth stagnated.

Despite having vowed to defend the peso “like a dog,” in
February 1982 the president allowed the dollar price of the
peso to almost double to discourage foreign-exchange specula-
tion. The exchange rate rose from more than twenty-six pesos
per dollar in January 1982 to about forty-five three months
later. In August of that year, the government announced three
more dramatic devaluations of the peso and a ninety-day sus-
pension of debt principal payments. It also began negotiations
for bridge loans and rescheduling agreements with the United
States treasury, the IMF, and private commercial banks. In Sep-
tember the government adopted full exchange controls and
nationalized the domestic banking system in a mistaken effort
to stem capital flight. In November the government concluded


The Economy

a rescheduling accord with the IMF, and in early 1993 it negoti-
ated a US$10 billion rescue package with private banks.

In December 1982, de la Madrid announced what turned
out to be his first stabilization package, the Immediate Eco-
nomic Reorganization Program (Programa Inmediato de Reor-
denacion Economica — PIRE). This two-stage program called
for “shock” treatment in 1983 to restore macroeconomic bal-
ance, to be followed in 1984 and 1985 by a “gradualist” adjust-
ment program to open the economy to market forces. The first
phase was intended to restore price and financial stability by
means of a sharp reduction in public spending and a steep
peso devaluation. The government instituted a harsh austerity
regime that held the growth in domestic spending far below
the rise in total output.

De la Madrid’s first stabilization package did not work as
expected. The government had expected lower inflation and
more realistic prices to produce strong economic growth by
1984. This did not take place. From early 1983 until mid-1984,
the government adhered closely to the goals of a November
1982 agreement it had reached with the IMF. The agreement
maintained highly restrictive fiscal and monetary policies and
allowed wages to lag substantially behind inflation. The auster-
ity measures and devaluations of 1983 eliminated both the fis-
cal and trade deficits, but at the cost of sharply reduced
imports and a severe economic recession. Contrary to expecta-
tions, the inflation rate did not fall significantly, and voluntary
private lending did not resume.

Increasingly concerned about Mexico’s growing fiscal deficit
and its failure to reach its economic targets, the IMF in Septem-
ber 1985 suspended disbursement of the loan it had approved
in late 1982. This announcement led to another run on the
peso and a new balance-of-payments crisis. The government
reacted to the situation by imposing a series of devaluations
and further harsh stabilization measures, including additional
reductions in spending and domestic credit. Economic growth
slowed and inflation surged, suggesting the failure of de la
Madrid’s first stabilization package.

In 1985 the Mexican government signaled a fundamental
change in development strategy by reorienting economic pol-
icy toward trade liberalization and export promotion. It
expected renewed export promotion to restore external bal-
ance and trade liberalization to restrain domestic prices by
encouraging import competition. In July 1985, the government


Mexico: A Country Study

substantially reduced import licensing requirements and raised
the share of total imports exempt from licensing. It compen-
sated slightly for these measures by raising tariffs. The govern-
ment also devalued the peso again, despite the inflationary
consequences, to force previously protected domestic firms to
become more competitive against imported goods.

In late 1986, the government cautiously relaxed credit to the
private sector in an effort to ease the economy out of recession.
External financing was again made available in 1987 following
approval of a debt rescheduling plan proposed by United
States Secretary of the Treasury James A. Baker III. The Baker
Plan called for rescheduling some 83 percent of the US$52.2
billion of public-sector debt that Mexico had contracted prior
to 1985. The debt would be repaid over a twenty-year period,
with a seven-year grace period. Multilateral agencies agreed to
lend an additional US$6 billion and commercial banks an addi-
tional US$7.7 billion, of which US$1.7 billion was contingency
lending. The Baker Plan also provided for rescheduling some
US$9.7 billion of private debt owed to commercial banks over a
twenty-year period with seven years’ grace. In all, the 1986
agreement provided Mexico some US$12.5 billion in new pri-
vate and official credit.

After 1987 the government finally began to make progress
against inflation. Endemic price instability had severely upset
economic expectations, deterred much-needed investment,
and hindered the country’s economic recovery. In an effort to
restore price stability, government policy makers decided in
late 1987 to stop devaluing the peso at rates equal to or higher
than the inflation rate. Even more important, in December
1987 the government forged a joint agreement with official
leaders of the labor, peasant, and business sectors to restrain
wages and prices. This accord, known as the Economic Solidar-
ity Pact (Pacto de Solidaridad Economica — PSE), promised to
reduce Mexico’s monthly inflation rate to 2 percent by the end
of 1988.

The PSE required further reductions in public spending and
credit, higher tax revenue, and a tighter monetary policy. All
were intended to reduce the fiscal deficit and curb inflation.
The new revenue measures included an increase in the value-
added tax (VAT), a new personal income surtax, and elimina-
tion of tax exemptions. The government raised prices of public
goods and services, and allowed interest rates to rise in order to
promote saving and reduce capital flight. The PSE also


The Economy

included a structural adjustment component emphasizing
trade liberalization and privatization of state enterprises.

The plan soon produced results. The inflation rate fell con-
siderably, living standards recovered slightly, and economic
growth resumed. Annual inflation fell from 159 percent in
1987 to 52 percent in 1988. The gradual recovery of Mexico’s
international reserves in 1989 and 1990 allowed the govern-
ment to sustain a credible fixed exchange rate and finance the
deterioration in the external account caused by the tariff
reductions. Although President de la Madrid was himself not
highly popular as he approached the end of his six-year term,
his government had sufficient authority and institutional
strength to enforce the wage restraints included in the PSE.

President Salinas announced in January 1989 a new version
of de la Madrid’s PSE, called the Pact for Economic Stability
and Growth (Pacto para la Estabilidad y el Crecimiento
Economico — PECE), which he hoped would end Mexico’s net
capital outflow. Salinas’s economic program received consider-
able external support (see President Salinas, ch. 1). In March
1989, Mexico and the United States reached agreement on a
long-term plan to restructure Mexico’s US$52.7 billion debt
owed to commercial creditors. The plan, proposed by United
States Secretary of the Treasury Nicholas F. Brady, was
intended to attract new foreign investment, encourage return
capital, reduce domestic interest rates, and foster higher

In July 1989, Mexico signed an agreement in principle with
an advisory committee representing its 500 or so international
creditors. The final agreement was signed in February 1990
and went into effect the following month.

Mexico’s public finances improved steadily during the early
years of Salinas’s presidency. Throughout the 1980s, the Mexi-
can government had emphasized fiscal austerity while making
little effort to raise tax revenue. This policy mix began to
change under Salinas, as Mexican economic policy stopped
holding domestic demand below output and began to tighten
tax collection. The government broadened the tax base by
reducing marginal tax rates, the maximum corporate and per-
sonal tax rates, and the number of personal income tax brack-
ets. Between 1989 and 1992, the number of taxpayers increased
by 45 percent. As a result in part of improved tax collection,
Mexico went from a public-sector deficit of 9 percent of GDP in


Mexico: A Country Study

1988 to a surplus of 2 percent of GDP in 1992, although the
government began to relax fiscal policy thereafter.

In the wake of the currency collapse of late 1994, the govern-
ment committed itself in March 1995 to reduce public spend-
ing by almost 10 percent in real terms; it raised the VAT from
10 percent to 15 percent, and it raised prices for fuel, electric-
ity, and other publicly provided services. Although the anti-
inflationary social pact among the government, business, and
labor — the PECE — was not renewed in early 1995, the govern-
ment announced in October 1995 a new pact with labor and
business, the Alliance for Economic Recovery (Alianza para la
Recuperacion Economica — APRE), which established fixed
rates of increase for wages and prices. Under the terms of the
APRE, the government pledged to maintain a balanced budget
during 1996. It also planned a 5 percent real reduction in cur-
rent spending, as well as regular increases in prices of publicly
provided goods and services. Unlike its predecessors, however,
this measure was not called a “pact,” and it included no provi-
sion for a crawling- peg exchange rate. The government’s
reductions in current spending and public investment during
1995 were especially severe because vastly higher interest rates
had boosted the government’s interest payments by more than
37 percent in real terms.

These spending reductions helped the government to move
from a public-sector deficit of 1.7 billion new pesos in 1994 to a
modest surplus of 815 million new pesos in 1995, the latter rep-
resenting 0.05 percent of GDP. Public expenditure in 1995
totaled 424 billion new pesos, of which 72 billion new pesos (17
percent) went to interest payments, 67 billion (16 percent) to
education, 65 billion (15 percent) to energy, and 62 billion (15
percent) to health and social security. For 1996 the govern-
ment budgeted total public-sector revenue of 558 billion new
pesos, of which 237 billion new pesos would come from taxa-
tion and 177 billion new pesos from state enterprises. It bud-
geted total net expenditures of 554 billion new pesos, of which
the largest share would go to education, energy, and health
and social security, as well as debt service.

External Debt

By the early 1990s, Mexico’s debt crisis had largely passed,
although the country remained saddled with huge debts. Capi-
tal inflows were more than sufficient to service the debt
through 1993 as portfolio and foreign direct investment


The Economy

reached unprecedented levels in response to liberalization and
the successful negotiation of NAFTA. Despite the use of funds
from privatization to retire old public-sector debt, total exter-
nal debt continued to grow during the early 1990s as current
account deficits soared after 1992.

After reaching a low of US$112 billion in 1992, Mexico’s
total external debt rose steadily thereafter, reaching an esti-
mated US$158 billion in 1995. The large increase during 1995
in Mexico’s total public indebtedness resulted in part from
loans contracted in the wake of the new peso collapse of late
1994. In early 1995, the United States government made
US$20 billion available to Mexico from the United States trea-
sury department’s Exchange Stabilization Fund, the Bank for
International Settlements contributed US$10 billion, and the
IMF offered US$8 billion in standby credit and US$10 billion
of other funding.

In 1993 Mexico’s total debt service amounted to US$21 bil-
lion, including US$14 billion in principal payments and US$7
billion in interest payments. Mexico’s total external debt
amounted to 356 percent of GDP in 1993.


Control of inflation was the main policy objective of the de
la Madrid and Salinas administrations between 1987 and 1993,
despite the cost of this policy in terms of the currency’s contin-
ued real appreciation and the resultant need to maintain high
interest rates to attract foreign investment and deter capital
flight. The government made steady progress against inflation
following the PSE’s introduction in late 1987 (replaced in 1989
by the PECE, which was revised and updated annually between
1989 and 1993). Largely as a result of the wage and price
restraints included in these pacts, inflation fell from 159 per-
cent in 1987 to 20 percent in 1989. In 1990 it rose slightly to 30
percent (double the initial target of 15 percent), as the govern-
ment eased credit, eliminated price subsidies, and realigned
public-sector prices as well as some private-sector prices. There-
after, the inflation rate fell steadily from 23 percent in 1991 to 7
percent in 1994, Mexico’s first single-digit inflation rate in
twenty years.

Consumer price inflation rose sharply between January and
April 1995 in response to the December 1994 new peso devalu-
ation, then abated between May and August as the new peso
appreciated. When the currency came under renewed pressure


Mexico: A Country Study

during the last four months of the year, however, inflation rose
more quickly. It soared as high as 52 percent (Mexico’s highest
inflation rate since 1987) by December 1995, although it aver-
aged 35 percent for the year. A 21 percent increase in the mini-
mum wage and monthly adjustments of public prices
contributed to the high inflation. Consumer prices rose by 11
percent during the first four months of 1996, despite Mexico’s
continued recession and the new peso’s real appreciation. The
government conservatively projected an inflation rate of 21
percent for all of 1996.


Prior to 1970, the Mexican government operated relatively
few productive enterprises. The influx of oil revenue during
the 1970s, however, allowed the government to vastly expand
its patronage resources by assuming ownership of hundreds of
unprofitable firms. By 1982 the Mexican government ran 1,155
businesses, among them public enterprises (65 percent with
state majority ownership and 6 percent with state minority own-
ership), trust funds, and decentralized agencies. President de
la Madrid announced in February 1985 that 237 parastatal (see
Glossary) enterprises would be sold to private buyers as part of
the government’s campaign to raise state revenues and pro-
mote economic efficiency. Privatization of state enterprises
accelerated under President Salinas and became a central com-
ponent of his structural adjustment program. The Salinas team
began by selling smaller enterprises, then moved to larger and
more complicated firms. In November 1993, Salinas
announced that his government had sold a total of 390 state
enterprises (63 percent of the firms in state hands in 1988),
and that fifty of the remaining 209 enterprises were in the pro-
cess of being sold, merged, or closed.

Despite its overall success, the privatization program elimi-
nated more than 400,000 jobs between 1983 and 1993. Far
more enterprises were closed than sold, and the overwhelming
majority of the latter were sold through acceptance of private
bids, mainly from wealthy Mexican investors, rather than
through stock offerings to employees or the public. Some
newly privatized enterprises — such as Astilleros Unidos de
Veracruz, Mexico’s largest shipyard — subsequently came close
to bankruptcy, and several sugar mills closed soon after they
were privatized.


The Economy

The Zedillo government continued its predecessor’s search
for new privatization opportunities. During 1995 it awarded
five concessions to joint ventures between Mexican and foreign
companies to operate in the long-distance telecommunications
market following the expiration of the Mexican Telephone
(Telefonos de Mexico — Telmex) monopoly in January 1997.
New privatization opportunities were expected to boost private
capital formation, which had slumped in late 1995. The
planned privatization of the secondary petrochemicals opera-
tion, Mexican Petroleum (Petroleos Mexicanos — Pemex), how-
ever, had not occurred by mid-1996, in part because of
opposition from the oil workers’ union and elements within
the ruling party. The government also delayed its offering of
railroad concessions for privatization, partly out of concern
about job losses. Moreover, it had to rescue the operators of
Mexico’s new private toll roads, who had sharply raised tolls to
recoup construction costs and then faced insolvency because
they had misjudged the volume of traffic.

Labor Force

Mexico’s workforce was estimated in the 1990 census at some
24.3 million. Workers constituted a relatively small share of the
total population, in part because of the population’s relative
youth (38 percent were below the minimum working age of
fourteen). Slightly more than half of the working-age popula-
tion (those aged fifteen to sixty-four) had actually entered the
formal labor market. In the early 1990s, an estimated 500,000
people entered the labor force each year, expanding the total
workforce by some 3 percent annually.

In 1988 employers and the self-employed constituted 29 per-
cent of the labor force, employees 56 percent, and unpaid fam-
ily workers 15 percent. Agriculture, forestry, and fishing
employed some 24 percent of the economically active popula-
tion; manufacturing, mining, quarrying, and public utilities
employed 22 percent; trade, hotels, and restaurants employed
19 percent; construction employed 5 percent; finance and real
estate employed 5 percent; transportation and communica-
tions employed 4 percent; and 21 percent were engaged in
other service work. About half of all manufacturing workers
were employed in small and medium-size enterprises.

Partly because of high unemployment in the formal labor
sector, the number of informal-sector workers swelled during
the 1980s and early 1990s (see Income Distribution, ch. 2).


Mexico: A Country Study

These informal workers included some 900,000 street vendors
in forty-five cities, with annual sales of about US$13 billion.
The growth of the informal sector both reduced the state’s tax
revenue receipts and encouraged corruption among local offi-

Historically, real wages in Mexico have been subject to tacit
understandings among government officials, the private sector,
and labor union chiefs. During the 1940s and 1950s, these sec-
tors forged an understanding whereby Central Bank and Trea-
sury Ministry technocrats would control macroeconomic
policy, business groups would refrain from open political oppo-
sition while gaining political access through officially recog-
nized private-sector associations, and labor leaders would
restrict real wage demands in exchange for additional patron-
age for distribution to workers. After falling sharply during the
1940s, real wages began to recover in the mid-1950s and con-
tinued to rise until the late 1970s, when the government
responded to growing fiscal pressures by shifting resources
away from the peasantry and the public sector. The govern-
ment used its control of employment opportunities and the
labor union movement to hold down wages throughout the
1980s in an effort to reduce inflation.

The average real wage in Mexico remained low in 1995, both
in historical and international terms (see Income Distribution,
ch. 2). The Confederation of Mexican Workers (Confedera-
tion de Trabajadores Mexicanos — CTM) noted that the aver-
age worker’s purchasing power in 1993 was only 65 percent of
its 1982 level.

Unemployment rose sharply during the six months follow-
ing the December 1994 new peso devaluation, then receded
somewhat between August and December 1995. Open unem-
ployment (according to the government’s narrow definition)
dropped from 8 percent to 5 percent during this period,
although it subsequently increased to an average of 6 percent
during the first quarter of 1996.

Although the government increased the minimum wage by
21 percent during 1995, the cost of living rose by more than 50
percent as a result of the currency collapse. In September
1995, the minimum wage was sufficient to cover only 35 per-
cent of workers’ basic necessities, compared to 94 percent in
December 1987. The government’s anti-inflation APRE pro-
gram called for the minimum wage to increase in line with pro-
jected inflation of 21 percent. The government also pledged to



SfrM vendor, Mexico City
Courtesy Arturo Salinas

boost employment through fiscal incentives to encourage pri-
vate investment and tax credits for companies that increased
their workforce above the average level for the first three quar-
ters of 1995. It also planned to expand public training pro-
grams for workers and to maintain its temporary public works
programs (such as rural road conservation, which was
expected to employ 140,000 people, as well as other temporary
work programs that would employ 700,000).

Partially to increase Mexico’s domestic savings, the govern-
ment proposed legislation in November 1995 to reform the
country’s pension system by allowing the creation of individual
accounts managed by private financial institutions rather than
by the government’s Mexican Institute of Social Security (Insti-
tuto Mexicano de Seguro Social— IMSS). Until 1992 the IMSS
had been solely responsible for managing the pension system.

Labor Legislation

Mexico’s first comprehensive labor law was promulgated in
1931. The Federal Labor Act of 1970 authorizes the govern-
ment to regulate all labor contracts and work conditions,
including minimum wages, work hours, holidays, paid vaca-


Mexico: A Country Study

tions, employment of women and minors, collective bargaining
and strikes, occupational hazards, and profit sharing. The act
sets the minimum employment age for children at fourteen
years. Children fifteen years old can work but are restricted
from certain jobs and have special legal protections and
shorter working hours than adults. Medium and large commer-
cial and manufacturing enterprises generally observe child
labor laws strictly, although small shops and informal enter-
prises often do not. Although the law mandates a minimum
wage, noncompliance ranges from 30 percent to 50 percent
among employers of urban workers and reaches 80 percent in
the countryside. Industrial safety laws often are loosely
observed in practice, especially in the heavy industry and con-
struction sectors.

The maximum legal workweek is forty-eight hours, and the
maximum workday is eight hours. Industrial workers generally
work the maximum number of hours per week, whereas office
workers typically work forty or forty-four hours. The maximum
workweek consists of either six eight-hour day shifts, six seven-
hour night shifts, or six seven-and-a-half hour mixed shifts.
Employers are required to pay double-time for overtime of up
to three hours per day, and they cannot require workers to
work overtime more than three times in one week. Each
employee has the right to one free day per week, five paid holi-
days every year, and six to eight days of vacation during each
full year of employment. Workers also are entitled to a share of
their employers’ annual profits.

Labor Unions

More than 90 percent of production workers in industrial
enterprises employing more than twenty-five workers belong to
labor unions. Relatively few craft or professional workers are
organized. Because almost half of all Mexican workers were
either unemployed or underemployed and therefore not
organizable, Mexico ranked in the early 1990s as a country with
a highly organized labor force. The plant or workplace union is
the basic unit of Mexican labor organization. Local units (sec-
ciones) are federated either into national unions (sindicatos) or
local, regional (intrastate), or state federations. Occasionally
these federations join in nationwide confederations. The CTM
is the country’s largest labor organization. Its secretary general
in 1994 was the long-serving Fidel Velasquez. The CTM
women’s affiliate is the Workers’ Federation of Women’s Orga-


The Economy

nizations (Federacion Obrera de Organizaciones Femininas).
Other prominent union federations include the Regional Con-
federation of Mexican Workers (Confederacion Regional de
Obreros Mexicanos), the Revolutionary Confederation of Mex-
ican Workers and Peasants (Confederacion Revolucionaria de
Obreros y Campesinos), the National Federation of Indepen-
dent Unions (Federacion Nacional de Sindicatos Independien-
tes), and the Federation of Unions of Workers in the Service of
the State (Federacion de Sindicatos de Trabajadores al Servicio
del Estado). Most of these federations are affiliated with the
Congress of Labor (Congreso del Trabajo), which represents
85 percent of all unionized workers.

Most Mexican labor unions have strong ties to the PRI. In
the 1930s and 1940s, organized labor became an integral com-
ponent of the regime. The official unions facilitated Mexico’s
dramatic postwar economic growth by accepting labor wage
increases that did not exceed productivity gains, thus eliminat-
ing a major source of inflation. The unions also discouraged
industrial conflict, which helped to foster a receptive climate
for foreign investment. Unions close to the PRI — especially the
CTM — used both coercion and bribery to restrain wage
demands. The absence of meaningful union democracy made
it hard for the union rank and file to press independently for
wage increases. During the 1970s, an increasing number of mil-
itant union movements broke away from the control of tradi-
tional union bosses, winning considerable autonomy over
hiring and firing decisions, internal labor market operations,
line speeds, and other working conditions. The government’s
efforts during the 1980s to promote greater productivity and
efficiency in both the public and private sectors led to the
reversal of many of these gains. Industrial reorganizations and
downsizing resulted in massive layoffs and numerous labor con-
cessions to management regarding work practices.

President Salinas further weakened the traditional unions
during his incumbency. In some cases, he forced unions to
negotiate at the plant level rather than nationwide. Shortly
after taking office, he weakened the official oil workers’ union
by having its powerful and corrupt chief, Joaquin Hernandez
Galicia, arrested on corruption and murder charges. Salinas
also undercut the 800,000-member official public schoolteach-
ers’ union, the National Union of Education Workers (Sindi-
cato Nacional de Trabajadores de la Educacion), by
transferring authority over education from the central govern-


Mexico: A Country Study

ment to the states. By doing so, he restricted the union’s power
by forcing it to negotiate separate contracts with each state gov-
ernment. The central government’s ongoing privatization pro-
gram eliminated hundreds of thousands of union jobs, and its
1993 decision to link future wage increases to productivity
gains denied the CTM the role of bargaining with the govern-
ment on wage increases for all workers. Instead, the CTM was
limited to advising individual union locals as they negotiated
new contracts with plant operators.

Financial System

Banking System

Mexico has one of Latin America’s most developed banking
systems, consisting of a central bank and six types of banking
institutions: public development banks, public credit institu-
tions, private commercial banks, private investment banks, sav-
ings and loan associations, and mortgage banks. Other
components of the financial system include securities market
institutions, development trust funds, insurance companies,
credit unions, factoring companies, mutual funds, and bonded

The central bank, the Bank of Mexico (Banco de Mexico),
regulates the money supply and foreign exchange markets, sets
reserve requirements for Mexican banks, and enforces credit
controls. It serves as the fiscal agent of the federal government,
the issuing bank for the new peso, and a discount house for pri-
vate deposit banks. It supervises the private banking sector
through the National Banking Commission, and it provides
funds for government development programs. Legislation in
1984 required the Bank of Mexico to limit its lending to the
government to an amount fixed at the beginning of each year.
To ensure continued control of inflation, the central bank was
made autonomous in April 1994.

Mexico has a number of other official banks for agriculture,
foreign trade, cooperatives, public works, housing, transporta-
tion, and the sugar industry, among other specialized pur-
poses. The most important such development institution is the
Nafinsa, which provides financial support for Mexico’s industri-
alization program. Nafinsa provides medium-term financing
and equity capital for productive enterprises, promotes Mexi-
can investment companies, oversees the stock market and the
issuance of public securities, and serves as the legal depository


Bank of Mexico headquarters, Mexico City
Courtesy Arturo Salinas

of government securities. By 1993 Nafinsa had divested itself of
some of its interests, but it remained under state ownership.
Mexico’s other most important state development bank is the
National Bank of Public Works and Services (Banco Nacional
de Obras y Servicios Publicos).

The private banking sector consists of more than 200 banks,
which together have more than 2,500 branches. The prolifera-
tion of banking institutions resulted from regulations that pro-
hibited any single bank from combining more than two
banking functions. Mexico’s two largest private banks are the
Bank of Commerce (Banco de Comercio — Bancomer), com-
prising thirty-five affiliated banks with more than 500 branches,
and the National Bank of Mexico (Banco Nacional de
Mexico — Banamex) . Development banks, known as financieras
and organized by commercial banks in association with major
industrial enterprises, provide most of the private sector’s
development financing.

In an effort to stem massive capital flight, President Lopez
Portillo decreed the nationalization of the country’s private
banks in September 1982. In August 1983, the government
authorized the return of up to 34 percent of the equity shares


Mexico: A Country Study

in these banks to the private sector, and it eliminated eleven
banks and merged fifty others into twenty-nine national credit
institutions in an effort to improve the banking system’s effi-
ciency. In March 1985, the government announced a further
reduction in the number of commercial banks, from twenty-
nine to eighteen.

The government took its first actual step toward reprivatiz-
ing the commercial banks in 1987, when it returned 34 percent
of their capital to private investors in the form of nonvoting
stock. In 1990 it allowed the sale to foreign investors of 34 per-
cent of nonvoting shares in state-owned commercial banks.
Reprivatization began in earnest in June 1991. By July 1992, all
eighteen commercial banks had been sold to private owners,
yielding more than US$12 billion. The privatization program
dramatically increased the number of investors holding stock
in Mexican commercial banks from just 8,000 on the eve of the
1982 nationalization to 80,000 in January 1993.

To improve the availability of credit, the government
allowed the establishment of new domestic banks in Mexico in
1993, and the following year it allowed United States and Cana-
dian banks to begin operating in Mexico. At the end of 1994,
there were some fifty commercial banks in operation in
Mexico, up from nineteen at the end of 1992. Mexico had
forty-five brokerage houses, fifty-nine insurance companies,
seventy-four leasing companies, sixty-five factoring houses, and
forty-nine exchange houses.

Following the currency crisis of late 1994, the government
was forced to raise interest rates sharply in order to protect the
new peso by retaining existing short-term foreign investment
and attracting new capital inflows. High interest rates during
1995 sharply increased the payments owed by Mexican individ-
ual and business borrowers, many of whom could not shoulder
the increased burden. As a result, the share of nonperforming
to performing loans held by Mexican banks rose significantly,
creating a major crisis for the financial sector. During the first
three quarters of 1995, the ratio of bad debts to the banking
system’s total loan portfolio increased from 8 percent to 17 per-
cent. Partially as a result, the rate of growth in commercial
bank financing of private-sector activities declined to just 1 per-
cent during this period, compared with 19 percent a year ear-

The interest rate increase also raised the cost to banks and
the government of the various efforts to resolve the problem of


The Economy

banks’ nonperforming loans. In late 1994, the government
took over Banca Cremi, and a year later it was forced to take
control of Inverlat. The government also agreed to assume
problem loans held by Banamex and Bancomer.

In the wake of the financial sector crisis, the government
introduced in mid-1995 a program for rescheduling bank loans
using index-linked investment units. In September 1995, the
government unveiled another emergency program of aid for
bank debtors, which was to provide relief for 8 million bank
debtors. By February 1996, 83 percent of eligible loans had
been restructured under this program. By mid-1996, the cost of
the government’s various efforts to prevent a banking system
collapse was estimated at 91 billion new pesos. The govern-
ment held control of 25 percent of bank assets, despite having
privatized the banking system only four years earlier. The gov-
ernment’s efforts to restore the financial sector’s stability were
rewarded by a sharp drop in interest rates in late 1995 and early

Stock Exchange

Shortly after taking office, President de la Madrid allowed
the establishment of private brokerage houses with wide lati-
tude to conduct financial transactions in domestic capital mar-
kets. That action laid the foundation for the first significant
stock market in Mexican history, the Mexican Stock Exchange
(Bolsa Mexicana de Valores — BMV). Following several years of
dynamic growth, the BMV’s leading index fell sharply as a
result of the October 1987 United States stock market crash.
The BMV recovered slowly in 1988, then surged ahead from
1989 through 1991. By the early 1990s, the BMV had become
one of the world’s fastest growing stock exchanges. During
1991 the index of traded stocks rose 128 percent in new peso
terms and 118 percent in United States dollar terms. Analysts
attributed the stock market’s buoyancy to increased confidence
in the economy and to expectations of lower interest rates and
approval of NAFTA.

In 1992, 199 companies were listed as trading on the stock
exchange. A total of 11 trillion new pesos were traded, and the
exchange had a total capitalization of US$139 billion and a
price-to-ear nings ratio of more than thirteen. The total value of
stocks traded increased by US$191 billion between 1987 and
1993. Treasury bills, bank acceptances, and commercial paper
were the most common instruments traded. At the end of


Mexico: A Country Study

1993, Mexican investors held about 75 percent of the equities
traded. Although the value of Mexican-owned stocks rose by
about US$143 billion between 1987 and 1993, only 0.2 percent
of all Mexicans had brokerage accounts at the end of 1992.

The BMV’s market value stood at about US$200 billion at
the end of 1993. Analysts attributed the rise partly to expecta-
tions of higher profits resulting from a 1 percentage point
reduction in the corporate tax rate, lower energy prices for
industrial users, and euphoria over the passage of NAFTA.
Despite a setback induced by the January 1994 Zapatista rebel-
lion in the state of Chiapas, the BMV continued its strong
growth in early 1994. Beginning in March, however, the market
was buffeted by a series of political shocks — including two high-
profile political assassinations, revelations of high-level corrup-
tion in President Salinas’s entourage, and continued unrest in
Chiapas — that contributed to its high volatility throughout the
rest of the year.

The stock market was further buffeted by the collapse of the
new peso in early 1995, causing the stock index to fall to less
than 1,500 points in February of that year. The main stock
index gradually recovered to just under 3,000 points by the end
of 1995 and had reached 3,300 by September 1996. Mexican
stocks gained 24 percent in dollar terms during the first eight
months of 1996. Mexico’s stock market had a US$70 billion
capitalization in September 1996, according to Morgan Stanley
Capital International indices.

Exchange Rate

From December 1982 until November 1991, the Mexican
peso had two rates of exchange against the United States dol-
lar — the controlled or “official rate” and the “free rate.” The
controlled rate applied to income from most merchandise
exports, to funds used by maquiladora (see Glossary) assembly
industries for local expenditure other than fixed assets, to
nearly all import payments, and to principal and interest pay-
ments and other credit expenses. The free rate applied to most
other transactions, such as tourism and profit remittances.

In November 1991, the government eliminated all exchange
controls, thereby unifying the various peso exchange rates. The
regime freed the peso to float within a band, the bottom of
which was fixed at 3,051 pesos per dollar and the top of which
was devalued by 0.2 pesos per day. Renewed pressure on the
peso forced the authorities in October 1992 to raise the aver-


The Economy

age daily depreciation to 0.4 pesos per dollar, increasing the
peso’s annual rate of devaluation to less than 5 percent. The
peso continued to appreciate in real terms, however, because
Mexico’s inflation rate exceeded that of the United States by
some 8 percentage points. The government was reluctant to
devalue the peso to the full extent of the inflation differential
with the United States because it feared that a large devalua-
tion would exacerbate domestic inflation and undermine pub-
lic confidence in the stability of the government’s
macroeconomic policy. It preferred to compensate for the less
competitive position of the peso by increasing productivity
within Mexico. In January 1993, the government introduced
the new peso, worth 1,000 of the old and divided into 100 cen-
tavos, to simplify foreign exchange.

Intense international demand for Mexican stocks and high-
yielding two-year treasury certificates, known as cetes, kept the
new peso at a stable level of 3.1 new pesos per dollar for most of
1993. Uncertainty about NAFTA’s passage drove the new peso
down to 3.3 per dollar in November 1993, although it soon ral-
lied to 3.1 per dollar as interest rates rose and NAFTA’s pros-
pects of ratification appeared to improve. By late 1993, the
capital influx had overvalued the new peso against the dollar
by some 30 percent, leading some investors to avoid Mexican
currency for fear that the new peso’s overvaluation would com-
pel the government to impose a large devaluation that would
sharply reduce the dollar return of cetes. Some leading private-
sector figures favored devaluation, expecting it to help reduce
the trade deficit, Mexico’s need for foreign capital, and thus
interest rates.

Political considerations deterred the government from
imposing a devaluation that would lower living standards, jeop-
ardize investor confidence, and promote capital flight in the
months prior to the August 1994 presidential and congres-
sional elections. The slowdown of capital inflows exerted steady
downward pressure on the new peso throughout the year. By
late 1994, the government was drawing heavily on international
reserves to prop up the new peso.

The almost complete disappearance of Mexico’s reserves
forced the new Zedillo government to bolster the currency’s
value. On December 20, 1994, the government raised the ceil-
ing on the exchange rate band from 3.4 to 4.1 new pesos per
dollar. However, continued pressure on the new peso, com-
bined with mounting investor concern about the government’s


Mexico: A Country Study

intentions, forced the administration two days later to let the
currency float. The new peso ended 1994 at 5.3 per dollar. It
continued to weaken during early 1995, as investors doubted
the government’s ability to repay the US$29 billion in short-
term tesebono debt that would fall due during that year. In 1995
the exchange rate fell to 6.5 new pesos per dollar, and in Janu-
ary 1996 it stood at 7.4 new pesos per dollar.

The average monthly interest rate on twenty-eight-day cetes
rose from 14 percent in 1995 to 49 percent in 1996. When the
new peso came under heavy speculative pressure in late 1995,
Mexico’s monetary authorities reacted by raising interest rates
sharply. Mindful of the need to restore investor confidence in
Mexico’s early economic recovery, the authorities allowed
interest rates to fall at the end of 1995.


Although nearly half of Mexico’s total land area is officially
classified as agricultural, only 12 percent of the total area is cul-
tivated. In the early 1990s, only some 24 million hectares of a
possible 32 million hectares were under cultivation.

Extensive irrigation projects carried out in the 1940s and
1950s greatly expanded Mexico’s cropland, especially in the
north. The government created areas of intensive irrigated
agriculture by constructing storage dams across the valleys of
the Rio Bravo del Norte (Rio Grande) and the rivers flowing
down from the Sierra Madre Occidental, by controlling the
lower Rio Colorado (Colorado River), and by tapping subterra-
nean aquifers.

These water-control projects allowed Mexico to expand rap-
idly its total land area under cultivation. Between 1950 and
1965, the total area of irrigated land in Mexico more than dou-
bled, from 1.5 million hectares to 3.5 million hectares. Despite
a slowdown in the development of irrigated land after 1965,
the total irrigated area had expanded to more than 6 million
hectares by 1987. In the early 1990s, 80 percent of Mexico’s cul-
tivated land required regular irrigation. Because of the high
cost of irrigation, however, the government has emphasized
expanding production on existing farmland rather than
expanding the area under irrigation.

Agricultural practices in Mexico range from traditional tech-
niques, such as the slash-and-burn cultivation of indigenous
plants for family subsistence, to the use of advanced technology
and marketing expertise in large-scale, capital-intensive export


The Economy

agriculture. Government extension programs have fostered the
wider use of machinery, fertilizers, and soil conservation tech-
niques. Although corn is grown on almost half of Mexico’s
cropland, the country became a net importer of grain during
the 1970s.

Land Tenure

During the first decade of the twentieth century, peasants
began to agitate for the return of communal and private lands
seized by large-scale commercial producers since the 1870s.
The desire to recover lost lands motivated many peasants to
join the Revolution that began in 1910. On January 6, 1915,
General Venustiano Carranza began the agrarian reform pro-
cess by decreeing the immediate return to their original own-
ers of all communal lands improperly seized since 1856.
Carranza, who became president in 1917, also decreed that
previously landless villages receive title to lands expropriated
from private hacienda owners or to excess government land.
These principles were later incorporated into Article 27 of the
constitution of 1917.

The constitution established three different forms of land
tenure in Mexico: private, public, and social. Social property
was further subdivided into communal (in southern Mexico)
and ejido (see Glossary) lands. Private lands were worked by
owners, sharecroppers, and landless peasants; social lands were
worked by colonos (settlers) or members of ejidos, known as eji-
datarios. Although the constitution limited private holdings to
100 hectares, by the early 1990s Mexico had more than 40,000
farms of 101 hectares or larger and some 500 farms larger than
50,000 hectares. The constitution prescribed national sover-
eignty over all land, water, and subsoil mineral resources within
national boundaries. It held private ownership of land to be a
privilege rather than an absolute right, and it allowed the state
to expropriate lands that it judged not to serve a useful social
purpose (see Rural Society, ch. 2).

Article 27 and subsequent legislation established the ejido, or
communal landholding, as the primary form of land tenure in
Mexico (see Rural Society, ch. 2). Mexico’s most extensive land
redistribution took place during the presidency of Lazaro
Cardenas (1934-40). Cardenas redistributed some 18 million
hectares, twice as much as all his predecessors combined. By
1940 most of the country’s arable land had been redistributed
to peasant farmers, and approximately one-third of all Mexi-


Mexico: A Country Study

cans had benefited from the agrarian reform program (see
Cardenas and the Revolution Rekindled, 1934-40, ch. 1).

Agrarian reform sharply increased the proportion of
Mexico’s arable land held by minifundistas (smallholders). The
share of total crop land held by large estates fell from 70 per-
cent in 1923 to 29 percent by 1960, while that held by small
farms of fewer than five hectares rose from 7 percent in 1930 to
more than 33 percent by the 1980s. Between 1924 and 1984,
the government expropriated and redistributed more than 77
million hectares of large-estate land, amounting to more than
one-third of the national territory.

Declining agricultural production and mounting food
imports moved President Salinas finally to address the root
cause of the problem, the land tenure system. In 1991 Salinas
announced a constitutional reform of the ejido and land distri-
bution systems intended to overcome the low productivity
resulting from the fragmentation of ejido farming units, of
which 58 percent contained five hectares or fewer. A reform of
land tenure rules in February 1992 gave Mexico’s 3 million eji-
datarios formal title to their land, enabling them to lease or sell
their plots if a majority of members of their ejido agreed. No
further land would be distributed, and joint ventures with pri-
vate capital were legalized and encouraged. The reforms
sought to reverse the trend toward smaller and less productive
farming units and stimulate rural investment by allowing ejida-
tanos to use their holdings as collateral for raising capital.
Implementation was hampered, however, by delays in conduct-
ing the necessary land surveys of ejidos prior to transfer of title,
as well as by other factors.

Government Agricultural Policy

In the years after World War II, Mexico followed a relatively
moderate import-substitution policy. By striking a relative bal-
ance between industrialization and growth of agricultural out-
put, the government was able to maintain a steady rate of
agricultural output and exports and to restrict its external bor-
rowing requirements for many years.

In an effort to resolve Mexico’s long-standing conflict
between promoting agricultural production for export and for
domestic consumption, the government followed a dual strat-
egy between 1940 and 1965; it promoted large-scale commer-
cial agriculture while redistributing land to the rural poor.
Government policy favored large producers because export



Mexico: A Country Study

agriculture provided foreign exchange needed to finance
industrialization. Extensive public investment in irrigation
projects primarily benefited northern areas, where large pri-
vate farms were concentrated, while rain-fed subsistence farm-
ing predominated in the central, southwest, and lower Gulf of
Mexico regions. Larger farms produced for the lucrative
export and agro-industrial markets, while traditional farmers
grew the less profitable staple crops. The government sold
basic food crops through its National Company for People’s
Sustenance (Compama Nacional de Susistencias Populares —
Conasupo) retail outlets, maintaining low purchase prices in
order to maintain domestic political stability and justify low
urban wages. Until the 1970s, Mexico was largely self-sufficient
in basic staple crops.

Partly in response to changing market conditions, the pro-
duction of staple commodities stagnated and then declined
after 1965, while production of feed crops, livestock, and
export products expanded. The agriculture sector’s problems
resulted partly from reduced public investment, as the govern-
ment shifted resources to urban areas and failed to collect suffi-
cient tax revenue. The government responded to declining
staple output in 1971 with new agrarian reform legislation
intended both to encourage production and to increase rural
employment. The law authorized ejidos to move beyond basic
crop cultivation into mining, forestry, fishing, agro-industry,
commerce, and tourism.

Despite such measures, agricultural output failed to grow by
more than 2 percent during the 1970s even though domestic
food demand steadily increased as a result of population
growth, growth in personal income resulting from the oil
boom, and the government’s provision of consumer subsidies
for basic foods in order to improve the nutrition of the poor.
The government raised producer prices and began to increase
public spending in support of rain-fed production by small pro-
ducers. Supply failed to keep pace with demand, however, and
by 1980 Mexico had become a net food importer.

In 1980 President Lopez Portillo signaled a new emphasis on
production of staple crops for domestic consumption over
export-oriented agriculture by establishing the Mexican Food
System (Sistema Alimentario Mexicano — SAM) (see Rural
Society, ch. 2) . This program sought to build a strong produc-
tive base for Mexican agriculture in order to reduce the coun-
try’s dependence on food imports from the United States and


The Economy

restore self-sufficiency in basic staples. Its main beneficiaries
included landless peasants and small farmers, mainly in rain-
fed areas. Additionally, the program provided subsidized “bas-
kets” of basic foods to some 19 million undernourished Mexi-
cans. Production priorities and goals were set for each region:
wheat would be grown in the north, corn in the southeast high-
lands, rice in the Gulf of Mexico region, and beans through-
out. Conasupo’s retail outlets would distribute the food. As a
result of the debt crisis, the de la Madrid administration abol-
ished SAM in 1982.

In the late 1980s, the Mexican government began to empha-
size reform and modernization of the agricultural sector (see
table 8, Appendix). President Salinas moved to reduce credit
costs, root out corruption and inefficiency in agricultural insti-
tutions, and raise guaranteed prices for certain products. The
government’s increased investment in agriculture and its 1991
reform of the land tenure system helped to attract substantial
new private investment to agriculture between 1990 and 1994.

Building upon its 1991 land reform measures, the Salinas
administration announced in October 1993 the details of a new
agricultural income support plan, the Program of Direct Rural
Support or Procampo. Starting with the 1994 growing season,
Procampo replaced current price supports for basic grains with
direct cash payments of 12 billion new pesos (US$3.5 billion),
representing an 83 percent increase over supports paid in
1993. About 70 percent of Mexico’s cultivated land was subsi-
dized. The program was initially funded from the fiscal surplus
that had accumulated since the late 1980s.

Procampo was intended to improve agricultural planning
decisions and promote capitalization of the rural sector. It
marked the abandonment of Mexico’s traditional policy of
agricultural self-sufficiency in favor of a more market-oriented
system in which individual producers rather than government
bureaucrats would make basic production decisions. The pro-
gram also sought to offset producer subsidies in other coun-
tries, reduce domestic commodity prices to levels consistent
with world market prices, encourage crop diversification and
conservation, boost the competitiveness of the domestic food
processing sector, and encourage the modernization of
Mexico’s agricultural production and marketing channels.

Initial beneficiaries of Procampo included 3.3 million grow-
ers of corn, beans, sorghum, wheat, rice, soybeans, and cotton,
which together accounted for 70 percent of Mexico’s arable


Mexico: A Country Study

land. Barley and safflower producers were added to the pro-
gram in autumn 1994. The new subsidies were based on the
size and productivity of land holdings and were paid to both
commercial and subsistence growers. The government claimed
that the new program would cover some 2.5 million farmers
who had not benefited from the previous price support system.
The 800,000 farmers who did benefit from that system received
both the price subsidies and the new Procampo subsidy for an
eighteen-month transitional period.

In addition to price supports, growers of program crops
received in the spring and summer of 1994 a general support
payment of 330 new pesos per hectare, which rose to 350 new
pesos per hectare in the fall and winter of 1994. Starting in
April 1995, the Procampo support payments were gradually
reduced in order to bring food prices into line with market
conditions. Meanwhile, direct payments under the program
increased, although at a slower rate than the decline in price
supports. Total support to agricultural producers fluctuated
between a minimum level ensuring adequate income for sub-
sistence farmers and a maximum level that would guarantee
profitability for commercial producers.

Funding for Procampo was expected to remain steady for
ten years, until 2003, and then decline over an additional five
years until the program’s termination in 2008. Procampo’s fif-
teen-year duration was intended to give farmers adequate time
to adopt new technologies, develop producer associations with
other farmers or private agribusiness firms, and rationalize
land use. To encourage alternative crop production, Procampo
would continue to provide area support payments to growers
who decided to change from program crops to alternative
crops or livestock, forestry, ecological, and aquaculture activi-
ties throughout the fifteen-year phase-out period.

Procampo’s reform of agricultural prices was expected to
encourage a shift away from production of corn and dry beans
and toward wheat, soybeans, and other products such as fruits
and vegetables. Its impact was likely to be greatest in northwest-
ern and northeastern Mexico and the Bajio region of west-cen-
tral Mexico, where in the late 1980s and early 1990s many
growers had switched from production of rice, cotton, sor-
ghum, oilseeds, and wheat to the more profitable corn and dry
beans. The direct payments were also expected to slow rural
migration to cities and provide needed capital to impoverished
subsistence farmers. Some government critics alleged that Pro-


Harvesting citrus by hand
Courtesy Inter-American
Development Bank

Packing strawberries for
Courtesy Inter-American
Development Bank


Mexico: A Country Study

campo was intended to generate rural support for the ruling

During 1995 the government introduced a new agricultural
support program, the Alliance for the Countryside (Alianza
para el Campo), as an adjunct to its APRE program with labor
and business. The alliance program presaged the devolution of
responsibility for agricultural support to state governments,
and it reinforced Procampo by expanding from ten to fifteen
years the period during which direct cash subsidies would be
paid to producers of various basic food crops. The new pro-
gram also sought to improve credit flows to farmers from Ban-
rural and other state agencies.

Grain Production

Corn is the staple food of most Mexicans and is grown on
about one-third of the country’s cultivated land. Central Mex-
ico is the main area of corn cultivation. The size of the corn
harvest varies significantly with weather conditions. In the
1992-93 growing season, about 8 million hectares were planted
in corn, and 16.5 million tons were harvested, a slight increase
over the previous year’s output of 16.3 million tons. In 1994 the
corn harvest amounted to 19.2 million tons.

Until the late 1980s, Mexico enjoyed corn self-sufficiency
during years when the harvest was good. In 1990, however,
demand exceeded supply by some 3.3 million tons and was met
by imports. Thereafter, Mexico’s import needs steadily fell to
1.9 million tons, at a cost of US$178 million in 1991 and 1.1
million tons in 1992. In 1993 Mexico imported just 400,000
tons of corn, almost all from the United States.

Wheat became more widely cultivated than it had been
before, as bread replaced corn tortillas among Mexican con-
sumers. There is little correlation between poor harvests of
wheat and corn because each has different climatic require-
ments. The total area sown in wheat declined from 1.1 million
hectares in 1986 to 714,000 hectares in 1993. Mexico’s wheat
output averaged slightly more than 4 million tons annually dur-
ing the 1980s, fluctuating from 3.2 million tons in 1981, to 3.7
million tons in 1988, and to 4.4 million in 1989. Wheat produc-
tion fell slightly from 3.7 million tons in 1992 to 3.6 million
tons in 1994. For most of the 1980s, domestic wheat output was
barely sufficient to satisfy internal demand. Mexico’s wheat
import requirement steadily grew from 260,000 tons (at a cost
of US$46 million) in 1990 to 1.4 million tons in 1993.


The Economy

Because the climatic requirements of sorghum are similar to
those of corn, its output has undergone similar weather-based
fluctuations. Mexico’s sorghum production declined from 5.4
million tons in 1992 to 3.9 million tons in 1994. The land area
sown in sorghum declined by more than half between 1989
and 1993, from 1.3 million hectares to 600,000 hectares.
Mexico’s import requirements for sorghum (almost all from
the United States) consequently rose between the mid-1980s
and early 1990s. Mexico imported 3.0 million tons of sorghum
(at a cost of US$362 million) in both 1990 and 1991. Its import
needs rose further to 5.0 million tons in 1992, then declined to
2.8 million tons in 1993.

The total land area sown in rice decreased from 192,000 hec-
tares in 1986 to 50,000 hectares in 1993. Mexico’s domestic out-
put of milled rice fell steadily from 615,000 tons in 1986 to
312,000 tons in 1989. After rising slightly to 431,000 tons in
1990, rice output fell again to 246,000 tons in 1992, then recov-
ered to 371,000 tons in 1993. Mexico imported substantial
quantities of rice from the late 1980s through the early 1990s.
In 1993 the country imported 350,000 tons of rice.

Beans are a basic staple food for most poor Mexicans.
Mexico’s domestic production of dry beans fell from 1.4 mil-
lion tons in 1991 to 719,000 tons in 1992, then recovered to 1.5
million tons in 1994. In 1991 Mexico imported 125,000 tons of
beans. The 1991 bean harvest covered 1.9 million hectares, the
largest area sown in beans since the early 1980s.

Mexico’s barley output fell steadily from 581,000 tons in
1991 to 325,000 tons in 1994. About 450,000 hectares were
sown in barley in 1993. Annual production of oats remained
steady throughout the early 1990s at 100,000 tons, and some
100,000 hectares were sown in oats each year.

Fresh Fruits and Vegetables

Fruit and vegetable production is concentrated in Mexico’s
irrigated northeast region and directed mainly to the United
States winter market. In 1991 fruit and vegetable exports
earned some US$935 million, 40 percent of Mexico’s total
export revenue. Fresh fruit and vegetables accounted for more
of Mexico’s agricultural export revenue than did coffee by the
early 1990s. Processed food exports grew at an average annual
rate of nearly 13 percent in the early 1990s.

Mexico produced 2.7 million tons of oranges in 1993, fol-
lowed by apples (580,000 tons), table grapes (270,000 tons),


Mexico: A Country Study

tangerines (185,000 tons), grapefruit (118,000 tons), pears
(32,000 tons), and raisins (13,000 tons). It also produced con-
siderable quantities of bananas, mangoes, lemons, limes, water-
melons, peaches, nectarines, plums, avocados, pineapples, and

Mexico’s output of fresh tomatoes declined from 1.7 million
tons in 1990 to 1.4 million tons in 1993. During the same
period,the total area harvested in tomatoes fell from 74,200
hectares to 58,500 hectares.

Other Crops

Between 1990 and 1993, Mexico’s soybean output fluctuated
with the amount of land sown. For the 1992-93 growing sea-
son, 313,000 hectares were sown in soybeans, producing
578,000 tons. Mexico’s soybean imports generally exceeded
domestic production in the late 1980s and early 1990s, in some
years by a wide margin. The country imported 2.1 million tons
of soybeans in 1992 and 1993, mainly from the United States.
In 1991 Mexico imported US$348 million worth of soybeans.

Between 1989 and 1993, Mexico’s cottonseed output fell
from 617,000 tons to 75,000 tons, and its total area harvested
fell from 255,000 hectares to 42,000 hectares. In 1993 Mexico
imported 180,000 tons of cottonseed. Peanut output averaged
104,000 tons between 1988 and 1992; the 1993 harvest of
80,000 hectares produced 108,000 tons of peanuts. Mexico pro-
duced 195,000 tons of copra and 10,000 tons of sunflower seed
in 1993. Mexico also produced green chilies, green beans, and
green peas.

Mexico’s raw sugar industry was reorganized and modern-
ized during the early 1980s. As a result, raw sugar production
reached 40 million tons in the 1985-86 growing season,
exceeding the 1982-83 harvest by 50 percent. Sugar output
declined thereafter because of trade liberalization, price con-
trols, and high credit costs. Bad weather in late 1989 and
uncertainties resulting from privatization of state sugar mills
also depressed production. Sugar output fell from 42 million
tons in 1988 to 35 million tons in 1990, then recovered slightly
to 40 million tons (from 530,000 hectares of sugarcane) in
1993. Declining domestic production forced Mexico to import
large amounts of sugar to satisfy domestic demand. In 1991 it
imported 1.3 million tons of sugar. Mexico’s sugar harvest in
1994-95 was 4.3 million tons, and the following year’s harvest
was expected to rise to 4.4 million tons.


The Economy

Coffee was introduced into Mexico during the nineteenth
century. Mexican coffee is mainly the arabica type, which grows
particularly well in the Pacific coastal region of Soconusco,
near the Guatemalan border. In the early 1990s, the southern
state of Chiapas was Mexico’s most important coffee-growing
area, producing some 45 percent of the annual crop of
275,000 tons. More than 2 million Mexicans grew coffee, most
barely subsisting. Seventy-five percent of Mexico’s coffee grow-
ers worked plots of fewer than two hectares. These small culti-
vators produced about 30 percent of the country’s annual
harvest; larger and more efficient farms produced the rest.

During the 1980s, coffee became Mexico’s most valuable
export crop. In 1985 coffee growers produced 4.9 million sixty-
kilogram bags, and coffee exports earned US$882 million at
the unusually high world price of US$0.90 per kilogram.
Thereafter output fluctuated between 5.6 million bags and 4.4
million bags. As international coffee prices rose further, the
government in 1988 encouraged coffee growers, especially in
Chiapas, to increase output and expand the area under cultiva-
tion. It tried to increase production by offering easy credit to
coffee growers and by converting forested land into ejidos for
cultivation by poor coffee growers.

International coffee prices fell 50 percent between 1989 and
1993. Lower prices combined with the elimination of coffee
subsidies to reduce the income of coffee growers by an esti-
mated 65 percent. Lower prices reduced Mexico’s export
income from coffee to about US$370 million by 1991. They
also depressed coffee production, which fell from 5.2 million
bags in 1992 to 4.1 million bags in 1993.

Although cotton had lost its traditional overwhelming domi-
nance of the export market by the 1990s, it remained — along
with fresh fruits and vegetables — a major cash crop of Mexico’s
irrigated lands. Cotton output fell from some 1.8 million bales
in 1973 to 1.4 million bales in 1989, and to 800,000 bales in
1990. The cotton industry’s poor performance in the late 1980s
and early 1990s resulted mainly from bad weather, low world
prices, and depressed domestic demand resulting from slow
growth in Mexico’s textile industry. In 1992 the total area sown
in cotton was 42,000 hectares, down sharply from 250,000 hect-
ares in 1991. Mexico’s cotton output in 1993 was just over
30,000 tons, down from nearly 181,000 tons in 1992. Export
revenue from cotton fell from US$113 million in 1988 to
US$77 million in 1991. By 1995-96, Mexico’s cotton crop had


Mexico: A Country Study

recovered to 193 million tons, and the 1996-97 harvest was
forecast at 266 million tons.

Mexico’s cocoa production declined from 57,000 tons in
1988 to 43,500 tons in 1993. The total area harvested in
tobacco rose from 18,700 hectares in 1992 to 34,000 hectares in
1993, while the total farm sales weight of tobacco fell from
38,250 tons in 1992 to 29,800 tons in 1993. Tobacco exports
earned some US$44 million in 1991.


In the early 1990s, one-third of Mexican territory was offi-
cially designated as grazing land. These lands were located
mainly in the north, where Herefords and other breeds were
raised on huge cattle ranches for export to the United States,
and in the southern, central, and southeastern states, where
native beef cattle were raised. During the 1980s, higher domes-
tic food demand encouraged more intensive raising of
improved cattle breeds near urban areas for both dairy prod-
ucts and beef. In 1992 the Mexican government announced
new measures to assist the meat industry, including deregula-
tion of cattle growers and tighter controls on imported meat.
The needs of the livestock industry also have encouraged more
extensive cultivation of fodder crops on irrigated lands.

Mexico’s livestock industry accounted for some 30 percent
of the agriculture sector’s annual growth, although animal hus-
bandry contributed less than 1 percent to total GDP. The
industry’s weak performance in the late 1980s and early 1990s
resulted from inadequate investment (which obstructed the
adoption of intensive production techniques), high feed costs,
low prices fixed by the government, poor weather conditions,
epidemics of hoof-and-mouth disease, and fears of expropria-
tion. Weak productivity has forced Mexico to become a net
importer of beef.

Mexico’s total cattle stock rose slightly from 30 million head
in 1992 to 31 million head in 1993, and the total swine stock
rose from 10 million head to 11 million head. The number of
sheep held steady at 13 million head. Production of beef and
veal was 1.7 million tons in 1993. Although lower domestic
demand for red meat caused a 0.5 percent decline in total live-
stock output in 1991, beef exports held steady and earned
US$358 million in 1991, compared with US$349 million in
1990. Output of lamb, mutton, and goat meat was 138,000 tons
in 1993, and swine meat production was 870,000 tons.


16 of September Market, Mexico City
Courtesy Inter-American Development Bank

Mexico’s total flock of chickens rose from 282 million in
1992 to 285 million in 1993, while poultry meat output fell
from 936,000 tons in 1992 to 923,000 tons in 1993. Mexico’s
chicken flock produced 20 billion eggs in 1993.


Some 9 percent of Mexico’s territory consists of forest or
woodland, 59 percent of which is in the tropics, 15 percent in
the subtropical zone, and 26 percent in the temperate and cool
zones. Forests cover some 49 million hectares, almost one-third
of which are open to logging, mainly in the states of Chihua-
hua, Durango, and Michoacan. About 9 percent of forests are
on state or federal lands, 19 percent on ejido lands, and 72 per-
cent on municipal or private lands. Although the tropical trees
of the southwest rain forests are the most numerous, the conif-
erous pine forests of the temperate and cool regions are com-
mercially more important, providing pulpwood for processing
in Mexico’s paper mills. More than 65 percent of Mexico’s for-
ests consist of hardwoods, and the rest are softwoods. The
major timber stands are mahogany, cedar, primavera (white
mahogany), sapote, oak, copa (yaya), and pine.


Mexico: A Country Study

In 1992 forestry provided 6 percent of total agricultural out-
put but a negligible 1 percent of overall GDP. Lumber produc-
tion declined by 5 percent in 1990 and by 3 percent in 1991.
Lumber companies attributed lower output to more intense
foreign competition as a result of trade liberalization. Exports
of wood products were valued at US$14 million in 1988.

In the late 1980s, the forestry sector suffered from over ex-
ploitation, insufficient investment and planning, and the disap-
pearance of certain species, as well as from forest fires and
insect damage (see Environmental Conditions, ch. 2) . Defores-
tation resulted in the loss of some 370,000 hectares annually as
land was cleared for cultivation and livestock grazing.


Mexico has some 11,500 kilometers of Pacific, Gulf of
Mexico, and Caribbean coastline, and its inland waters cover
more than 2.9 million hectares. The country’s coastal fishing
grounds offer a rich variety of fish and other seafood. The
Pacific coast has thirty-one ports and produces nearly three-
quarters of Mexico’s total catch; the states of Sonora and
Sinaloa alone account for 40 percent of the total catch.
Mexico’s Pacific fishing grounds produce mainly lobster,
shrimp, croaker, albacore, skipjack, and anchovies, while its
Gulf of Mexico and Caribbean waters produce shrimp, jewfish,
croaker, snapper, mackerel, snook, and mullet. The Gulf of
Mexico is an especially important source of shrimp. Certain
species — such as shrimp, lobster, abalone, clam, croaker, grou-
per, and sea turtle — are reserved for the country’s more than
284 fishing cooperatives, which together have more than
39,000 members. The state-owned Mexican Fisheries
(Pesqueros Mexicanos) markets about 15 percent of the total
catch. In 1989 the fishing subsector employed 288,000 people.
The total fishing fleet grew from 48,000 boats in 1984 to 74,000
boats in 1989.

Until about 1970, the relative distance of urban markets
from the coasts depressed commercial production of seafood.
During the 1970s and 1980s, the government fostered the con-
struction of new plants for freezing and processing fish. The
national catch more than doubled after cooperatives were
organized. The government’s US$5 billion expansion program
helped the fishing industry to increase output by more than 30
percent between 1985 and 1990. Despite these efforts, however,
Mexico’s catch accounted for less than 10 percent of the total


The Economy

catch taken from waters off Mexico’s coasts by United States,
Canadian, and Japanese boats.

In the late 1980s, Mexico’s fishing output averaged a disap-
pointing 1.4 million tons per year, equivalent to just 0.3 per-
cent of GDP. Production increased from 1.1 million tons in
1983 to 1.6 million tons in 1990. Output fell slightly in 1991 as
the United States and Europe embargoed Mexican tuna
because of concerns about inadequate protection of dolphins.
The Salinas administration’s National Fishing Plan for 1990-94
promised higher public investment in the fishing industry,
despite the government’s stated intention to sell Mexican Fish-
eries to private owners.

In 1992 Mexico produced 251,500 tons of California pil-
chard (sardine), down from more than 600,000 tons in 1991.
The yellowfin tuna catch rose from 116,400 tons in 1991 to
122,200 tons in 1992. Mexico produced 3,400 tons of Califor-
nian anchoveta in 1992, down from 12,100 tons in 1991. Out-
put of marine shrimp and prawns declined from 70,600 tons in
1991 to 66,200 tons in 1992. Mexico exported two-thirds of its
catch, especially frozen shrimp, prawns, and other shellfish
from the Gulf of California and Bahia de Campeche, mainly to
the United States. Export earnings amounted to US$389 mil-
lion in 1989. In 1992 Mexico produced 77,000 tons of cichlids
and 88,100 tons of other freshwater fish.



In the early 1950s, the manufacturing sector eclipsed agri-
culture as the largest contributor to Mexico’s overall GDP.
Largely because of extensive import substitution, manufactur-
ing output expanded rapidly from the 1950s through the 1970s
to satisfy rising domestic demand. The value added by manu-
facturing rose from 20 percent of GDP in 1960 to 24 percent in
1970, and again to 25 percent by 1980. Manufacturing output
grew at an annual average of 9 percent during the 1960s, and
by a slightly lower annual rate of 7 percent in the 1970s.

This forty-year trend of manufacturing growth abruptly
stopped and then reversed itself during the early 1980s. Sharp
reductions in both exports and internal demand caused manu-
facturing output to fall by 10 percent between 1981 and 1983.
After recovering briefly in 1985, manufacturing output fell
again by 6 percent the following year. Production of consumer


Mexico: A Country Study

durables suffered especially, with the domestic electrical goods
and consumer electronics goods sectors losing between 20 per-
cent and 25 percent of their markets during the mid-1980s.
Government industrial policies began to favor manufactured
goods destined for the export market, in particular machinery
and electrical equipment, automobiles and auto parts, basic
chemicals, and food products (especially canned vegetables
and fruit).

In the late 1980s, the manufacturing sector began to recover.
In 1988 manufacturing output grew by a modest 4 percent.
After expanding a robust 7 percent in 1989, manufacturing
output steadily slowed; it grew by only 2 percent in 1992, as a
result of weak export growth and falling domestic demand.
After contracting by 2 percent in 1993, manufacturing output
expanded by 4 percent in 1994. The most dynamic manufac-
turing subsectors in 1994 were metal products, machinery, and
equipment (9 percent growth), followed by basic metals indus-
tries (9 percent growth). In 1994 the manufacturing sector
accounted for 20 percent of the country’s total GDP and
employed about 20 percent of all Mexican workers.

Mexico’s export base for manufactured goods is narrow, with
three subsectors (vehicles, chemicals, and machinery and
equipment) accounting for more than two-thirds of non-maqui-
ladora foreign earnings. The value of Mexico’s imports of man-
ufactured goods rose sharply following trade liberalization,
from US$11 billion in 1987 to US$48 billion in 1992 (US$62
billion including maquiladora imports). Increased foreign com-
petition has seriously threatened many Mexican manufactur-
ing enterprises, almost all of which are small and medium-sized
companies employing fewer than 250 workers. In 1991 Mexico
had 137,200 manufacturing enterprises, some 90 percent of
which employed no more than twenty workers.

The principal industrial centers of Mexico include the
Mexico City metropolitan area (which includes the Federal Dis-
trict), Monterrey, and Guadalajara. In the early 1990s, the capi-
tal area alone accounted for about half of the country’s
manufacturing activity, nearly half of all manufacturing
employment, and almost one-third of all manufacturing enter-
prises. About one-third of formal-sector workers in the capital
area were engaged in manufacturing. Manufacturers have been
drawn to greater Mexico City because of its large and highly
skilled work force, large consumer market, low distribution
costs and proximity to government decision makers and the


The Economy

nation’s communications system. In the early 1990s, the chemi-
cal, textile, and food processing industries accounted for half
of all manufacturing activity in the Federal District, and metal
fabrication accounted for another one-quarter. Heavy industry
(including paper mills, electrical machinery plants, and basic
chemical and cement enterprises) tended to locate in the sub-
urbs of Mexico City, where planning and environmental restric-
tions were less rigorous.

By the late 1980s, more than two-thirds of all foreign invest-
ment in Mexico was concentrated in maquiladora zones near
the United States border. In 1965 the government began to
encourage the establishment of maquiladora plants in border
areas to take advantage of a United States customs regulation
that limited the duty on imported goods assembled abroad
from United States components to the value added in the man-
ufacturing process. The maquiladora zones offered foreign
investors both proximity to the United States market and low
labor costs. Most maquiladora plants were established in or near
the twelve main cities along Mexico’s northern border. Some of
these enterprises had counterpart plants just across the United
States border, while others drew components from the United
States interior or from other countries for assembly in Mexico
and then reexport.

The maquiladora sector grew nearly 30 percent annually
between 1988 and 1993. By the latter year, more than 2,000
maquiladora businesses were in operation, employing 505,000
workers. These plants generated US$4.8 billion in value added
during 1992. Their main activities included the assembly of
automobiles, electrical goods, electronics, furniture, chemicals,
and textiles. To increase their purchase of domestic materials,
the Mexican government decided in December 1989 to
exempt local sales to maquiladoras from the value-added tax
and to let these enterprises sell up to half of their output on
the domestic market. Nevertheless, almost all in-bond products
have been exported to the United States.

In 1994 food processing, beverages, and tobacco products
constituted the leading manufacturing sector in terms of value,
accounting for about 26 percent of total manufacturing output
and employing 17 percent of manufacturing workers. Food,
beverage, and tobacco output expanded by an annual average
of 3 percent between 1990 and 1994, largely as a result of
export growth. In 1994 it expanded by less than 1 percent. In
the early 1980s, well over 50 percent of Mexico’s productive


Mexico: A Country Study

units were involved in food processing, and Mexico’s beer
industry was the world’s eighth largest.

Metal products, machinery, and transportation equipment
accounted for 24 percent of manufacturing GNP in 1994. The
automobile subsector was among the most dynamic manufac-
turing sectors in the early 1990s and led among manufacturing
exporters. Mexico’s automobile manufacturers were led by
Volkswagen, General Motors (GM), Ford, Nissan, and Chrysler.
Ford expanded production by 33 percent during 1991,
Chrysler by 17 percent, and GM by 10 percent. Volkswagen
controlled 25 to 30 percent of the domestic automobile mar-
ket, and Nissan another 15 to 20 percent. Mexican automobile
exports earned US$6.1 billion in 1992, not counting maquila-
dora production, which earned an additional US$1.3 billion.
Export revenue from passenger vehicle sales rose by 21 percent
in 1993 and by 22 percent in 1994, while domestic sales fell by
some 14 percent in 1993 and rose by less than 1 percent in

In 1983 the government encouraged the automobile indus-
try to shift from import substitution to export production. It
lowered national content requirements for exporters and
required assemblers to balance imports of auto parts with an
equivalent value of automobile exports. In 1990 the govern-
ment eliminated restrictions on the number of production
lines that automobile producers could maintain and allowed
producers to import finished automobiles (although they were
required to earn US$2.50 in automobile exports for every
US$1 spent on imports).

In the early 1980s, automobile exports increased as domestic
demand fell. Export growth leveled off in the early 1990s as the
domestic market recovered. Growth of total vehicle output
slowed from 21 percent in 1991 to 9 percent in 1992. In 1994
vehicle production totaled more than 1 million units, of which
850,000 were cars. Production fell by 16 percent between Janu-
ary and November 1995. During those months, exports rose by
37 percent to 700,000 units, while domestic sales fell by 70 per-
cent, to 140,000 units.

Textiles, clothing, and footwear together accounted for 9
percent of manufacturing output in 1994 and employed about
7 percent of all manufacturing workers. Textile and clothing
production stagnated throughout the 1980s because of low
domestic demand, high labor costs, antiquated and inefficient
technology, more competitive export markets (especially in


Mercedes truck assembly
plant, Mexico City
Courtesy Dennis Hanratty

Asia), and heavy import competition resulting from trade liber-
alization. In the early 1990s, the textile industry operated at
just 60 percent of capacity. Import competition caused foot-
wear and leather output to decline 4 percent annually between
1982 and 1989. In 1990 domestic footwear enterprises pro-
duced almost 200,000 pairs of shoes per week. In 1992 footwear
and leather goods accounted for 4 percent of manufacturing

N on- maquiladora export earnings for textile, clothing, and
footwear sales rose from US$499 million in 1990 to US$890
million in 1992. Imports also rose sharply to almost US$2 bil-
lion in 1992. The sector showed signs of strong recovery in late

1993, following its forced modernization.

The chemicals sector (including oil products, rubber, and
plastics) accounted for 18 percent of manufacturing GDP in

1994. Its output increased by 5 percent during 1994. In 1990
this sector employed 130,000 workers. Although the chemical
industry was the most important foreign-exchange earner in
the manufacturing sector, its output fell far short of domestic
demand. Exports of non- maquiladora chemicals and petro-
chemicals earned US$2.5 billion in 1992, but the country
imported US$5.8 billion worth of chemicals and petrochemi-
cals. The imbalance resulted partly from domestic price con-


Mexico: A Country Study

trols, inadequate patent protection, and high research and
development costs. Chemicals and petrochemicals accounted
for 72 percent of total non- maquiladora export revenues in

1992. The chemical industry slumped in early 1993, as sales fell
by 10 percent, operating profits by 61 percent, and net profits
by 59 percent.

Petrochemicals accounted for less than 2 percent of overall
GDP in 1992. The state oil monopoly, Mexican Petroleum
(Petroleos Mexicanos — Pemex), dominated the country’s
more than 200 petrochemical companies, which together oper-
ated more than 700 plants. The petrochemical subsector
enjoyed robust annual growth of 7 percent between 1982 and
1988, but output slowed thereafter. Pemex produced 18.5 mil-
lion tons of petrochemicals in 1993, down from 19 million tons
in 1992. In 1992 the Salinas government reduced the number
of basic petrochemicals reserved for Pemex to just eight and
lifted restrictions on foreign investment in “secondary” petro-
chemicals to improve the oil company’s cost-effectiveness, raise
the industry’s productivity, and attract new private investment.

Although Mexico’s pharmaceutical industry consisted of
some 450 companies, the largest ten enterprises accounted for
30 percent of all sales in 1993. In the early 1990s, some fifty-six
firms controlled three-quarters of pharmaceutical production.
Nonmetallic minerals (excluding oil) accounted for 7 percent
of manufacturing gross national product (GNP — see Glossary)
in 1994. The subsector concentrated on production of cement,
glass, pottery, china, and earthenware. Total cement output in
1993 was 27 million tons. Cement exports fell from 4.5 million
tons in 1988 to 1.4 million tons in 1992 because of higher
domestic demand and United States antidumping sanctions. A
new cement plant came into operation in Coahuila in early

1993, and the expansion of two other plants in Hidalgo was

Mexico’s largest cement producer is the privately owned
Mexican Cement (Cementos Mexicanos — Cemex). By 1994
Cemex had become the world’s fourth largest cement com-
pany, with annual earnings of US$3 billion. In an effort to
establish itself as a major multinational corporation, Cemex
expanded its operations during the early 1990s into the United
States and twenty-five countries in Europe, Asia, and Latin

The basic metals subsector (dominated by iron and steel)
accounted for 6 percent of manufacturing GNP in 1994. Mex-


The Economy

ico’s iron and steel industry is one of the oldest in Latin Amer-
ica, comprising ten large steel producers and many smaller
firms. The industry is centered in Monterrey, where the coun-
try’s first steel mills opened in 1903. Steel plants in Monterrey
(privatized in 1986) and nearby Monclova accounted for about
half of Mexico’s total steel output in the early 1990s. Most of
the rest came from the government’s Lazaro Cardenas-Las Tru-
chas Steel Plant (Sicartsa) and Altos Hornos de Mexico
(Ahmsa) steel mills, which were sold to private investors in

Export revenue from steel and steel products fell from
US$1.03 billion in 1991 to US$868 million in 1992. Spurred by
rising demand from the automobile industry, crude steel out-
put rose 6 percent to 9 million tons in 1993. During the first
half of 1993, output rose 10 percent over the same period in
1992, to 4 million tons. Production of semifinished steel rose
86 percent, reaching 573,000 tons, and rolled steel production
expanded 5 percent to more than 2.6 million tons. Pipe pro-
duction fell 13 percent to 174,400 tons. In 1993 Mexico was
Latin America’s second largest steel producer after Brazil,
accounting for some 20 percent of Latin America’s total steel
production of 43 million tons.

Paper, printing, and publishing contributed about 5 percent
of manufacturing output in 1994. Mexico produced almost 3
million tons of paper and 772,000 tons of cellulose in 1990.
The country had some 760 publishing enterprises in 1990, 48
percent of which published books, 44 percent periodicals, and
8 percent both. These companies produced a total of 142 mil-
lion books and 693 million periodicals. Trade liberalization
hurt the domestic publishing industry in 1992, as imports rose
to US$1.6 billion from US$1.3 billion in 1991. Exports of Mexi-
can publications declined in value from US$232 million in
1991 to US$217 million in 1992.

Finally, wood products contributed 3 percent of manufactur-
ing GDP in 1994. Although output of wood products fell in the
late 1980s because of high investment costs and other adverse
conditions in the primary forestry industry, it began to recover
in 1993. Output of wood products increased by 2 percent dur-
ing 1994.


The construction sector accounted for slightly more than 5
percent of GDP in 1994. In 1991 Mexico had about 18,000 reg-


Mexico: A Country Study

istered construction companies that employed almost 1 million
workers. In that year, heavy construction accounted for 44 per-
cent of all construction, residential building 35 percent, and
industrial construction 14 percent. Government efforts to pro-
mote private-sector investment in physical infrastructure
projects (especially road building and new rental housing)
helped to increase construction growth. Construction growth
slowed from 7 percent in 1990 to 2 percent in 1991. It acceler-
ated to 8 percent in 1992, but slowed again to 3 percent in
1993, partially as a result of continuing high interest rates,
which discouraged private investment. In 1993 transport
projects accounted for 29 percent of the value of production in
the formal construction sector, the installation of water sup-
plies accounted for 11 percent, and electricity and communica-
tions projects accounted for 9 percent.

Energy and Mining

Although explorers drilled Mexico’s first petroleum well in
1869, oil was not discovered until after the turn of the twenti-
eth century. Commercial production of crude oil began in
1901. By 1910 prospectors had begun to define the Panuco-
Ebano and Faja de Oro fields located near the central Gulf of
Mexico coast town of Tuxpan, and systematic explorations by
foreign companies came to supersede the uncoordinated
efforts of speculative prospectors. Mexico began to export oil
in 1911.

Article 27 of the constitution of 1917 gives the Mexican gov-
ernment a permanent and inalienable right to all subsoil
resources. The government’s efforts to assert this right pro-
duced a lengthy dispute with foreign oil companies that was
not resolved until the companies were nationalized in the late
1930s. The 1923 Bucarelli Agreements committed the United
States and Mexico to regard titles held by foreign oil compa-
nies as concessions by the Mexican government rather than as
outright ownership claims. In 1925 President Plutarco Elias
Calles decreed that foreign oil companies must register their
titles in Mexico and limited their concessions to a period of
fifty years.

Despite disruption caused by the Revolution, Mexico’s oil
production peaked in 1921 at 193 million barrels (some 25 per-
cent of world production), largely as a result of increased inter-


The Economy

national demand generated by World War I. During much of
the 1920s, Mexico was second only to the United States in
petroleum output and led the world in oil exports. By the early
1930s, however, output had fallen to just 20 percent of its 1921
level as a consequence of worldwide economic depression, the
lack of new oil discoveries, increased taxation, political instabil-
ity, and Venezuela’s emergence as a more attractive source of
petroleum. Production began to recover with the 1932 discov-
ery of the Poza Rica field near Veracruz, which became
Mexico’s main source of petroleum until the late 1950s.

In 1938 President Lazaro Cardenas nationalized the petro-
leum industry, giving the Mexican government a monopoly in
the exploration, production, refining, and distribution of oil
and natural gas, and in the manufacture and sale of basic pet-
rochemicals. Although Cardenas offered compensation,
United States oil companies pressured the United States gov-
ernment to embargo all imports from Mexico in order to dis-
courage similar nationalizations in other countries. The
boycott was in effect briefly, but the United States government
soon pressured the oil companies to come to terms with
Mexico as a result of President Franklin D. Roosevelt’s Good
Neighbor Policy and United States security needs arising from
World War II. In 1943 Mexico and the oil companies reached a
final settlement under which the companies received US$24
million (a fraction of the book value of the expropriated facili-
ties) as compensation. Nevertheless, the oil nationalization
deprived Mexico of foreign capital and expertise for some
twenty years.

Mexico’s oil output expanded at an average annual rate of 6
percent between 1938 and 1971. Production increased from 44
million barrels in 1938 to 78 million barrels in 1951. Domestic
demand progressively exceeded output, and in 1957 Mexico
became a net importer of petroleum products. Production rose
to 177 million barrels by 1971 with the exploitation of new oil
fields in the isthmus of Tehuantepec and natural gas reserves
near the northeastern border city of Reynosa, but the gap
between domestic demand and production continued to

Extensive oil discoveries in the 1970s increased Mexico’s
domestic output and export revenues. In 1972 explorers dis-
covered deep oil wells in the states of Chiapas and Campeche
that showed huge reservoirs of petroleum extending for 200
kilometers northeast below the Bahfa de Campeche, and possi-


Mexico: A Country Study

bly in the opposite direction toward Guatemala. Almost every
drilling operation conducted after 1972 struck oil. In 1973 oil
production surpassed the peak of 190 million barrels achieved
in the early 1920s. In 1974 Pemex announced additional petro-
leum discoveries in Veracruz, Baja California Norte, Chiapas,
and Tabasco.

By 1975 Mexico’s oil output once again exceeded internal
demand, providing a margin for export. President Lopez Porti-
llo announced in 1976 that Mexico’s proven hydrocarbon
reserves had risen to 11 billion barrels. They rose further to
72.5 billion barrels by 1983. Lopez Portillo decided to increase
domestic production and use the value of Mexico’s petroleum
reserves as collateral for massive international loans, most of
which went to Pemex. Between 1977 and 1980, the oil company
received US$12.6 billion in international credit, representing
37 percent of Mexico’s total foreign debt. It used the money to
construct and operate offshore drilling platforms, build
onshore processing facilities, enlarge its refineries, engage in
further exploration, prove fresh reserves, and purchase capital
goods and technical expertise from abroad. These investments
helped to increase petroleum output from 400 million barrels
in 1977 to 1.1 billion barrels by 1982. Between 1983 and 1991,
Mexico’s petroleum exports by volume remained roughly con-
stant at 1.4 million barrels per day (bpd), while total produc-
tion increased from 2.7 million bpd to 3.1 million bpd.

The oil sector’s share of total export revenue fell sharply
from 61 percent in 1985 to 38 percent in 1990 because of
higher domestic demand and lower total output. The volume
of exports fell from 1.4 million bpd in 1987 to 1.3 million bpd
in 1990. Oil prices rose briefly to more than US$35 per barrel
in 1990 as a result of loss of supplies from Iraq and Kuwait, and
Mexico’s oil export revenues rose significantly to US$10 billion
before falling back some 15 percent in 1991. The volume of oil
exports rose slightly to 1.4 million bpd in 1991, then held
steady along with production in 1992, as the oil price fell to
below US$15 per barrel.

By early 1993, both crude oil production and exports had
begun to decline. The drop in exports resulted from both
increased domestic demand and lower total production. For all
of 1993, Mexico’s oil exports averaged 1.3 million bpd, 2 per-
cent less than in 1992. Exports fell even more sharply in terms
of value — to US$7 billion — because world oil prices fell steadily


The Economy

during much of 1992 and 1993. In 1994 Mexico’s revenue from
oil exports was more than US$7 billion.

In 1995 the oil sector generated slightly more than 10 per-
cent of Mexico’s export income (down from almost 80 percent
in 1982). The United States bought 54 percent of Mexico’s
crude oil exports in 1991, Western Europe bought 25 percent,
and Japan bought 11 percent. In mid-1993, heavy Maya crude
accounted for 67 percent of total oil exports, the lighter Isth-
mus crude accounted for 20 percent, and the high-quality
Olmeca type accounted for 13 percent.

In 1995 Mexico was the world’s sixth-largest producer of
crude oil. In the Western Hemisphere, only the United States
produced more oil than Mexico. Directly behind Mexico was
Venezuela, which in 1992 produced an amount equal to 89 per-
cent of Mexico’s crude oil output. The oil sector’s share of
overall GDP rose slightly from 5 percent in 1985 to more than 6
percent by 1992. In 1993 petroleum provided nearly 30 percent
of central government revenues. Oil output rose steadily from
2.5 million bpd in 1989 to 2.7 million bpd in 1991, partly in
response to the Persian Gulf crisis. Production held steady in
1992, then began to decline in early 1993. Mexico consumed
61 million tons of oil equivalent in 1992. Its total petroleum
consumption amounted to 1.8 million bpd in 1992.

For the first ten months of 1995, total mineral production
(including oil) contracted by a modest 1 percent. For all of
1995, oil production fell to an average of 2.6 million bpd from
2.7 million bpd in 1994. However, oil output in the first quarter
of 1996 increased by 6 percent over the first quarter of 1995 to
an average of 2.8 million bpd.

In 1993 Pemex operated seven oil refineries with a total
capacity of more than 1.5 million bpd, the eleventh largest in
the world. Mexico’s average annual oil refining capacity grew
steadily from 63 million tons in 1983 to 84 million tons in 1990.
The country’s largest oil refineries in terms of refining capacity
were those at Salina Cruz (330,000 bpd) and at Tula (320,000
bpd) in the state of Hidalgo. Other refineries were located at
Cadereyta (235,0900 bpd refining capacity), Salamanca
(235,000 bpd), Minatitlan (200,000 bpd), Ciudad Madero
(195,000 bpd), and Reynosa (9,000 bpd).

By the early 1990s, some 40 percent of Mexico’s crude petro-
leum output was refined domestically. The government
invested heavily to increase the capacity of existing refineries
and construct new ones in order to retain within Mexico the


Mexico: A Country Study

maximum possible amount of value added in processing crude
petroleum. In the early 1990s, financial difficulties prevented
Pemex from expanding refinery capacity along with demand,
forcing Mexico to consume more of its oil output internally
and also to import oil. Petroleum imports rose from 2 billion
liters in 1991 to almost 5 billion liters in 1992. Fuel oil imports
rose from less than 3 million tons in 1991 to almost 4 million
tons in 1992.

During the 1980s, Pemex constructed national pipeline dis-
tribution systems for crude and refined petroleum products
and for natural gas. In 1989 an oil pipeline across the Tehuan-
tepec isthmus opened to carry 550,000 bpd of Maya crude
petroleum to Salina Cruz on the Pacific for export to the Far
East. Two enormous petrochemical complexes were being built
at Pajaritos and La Cangrejera in Veracruz to supply raw mate-
rials for manufacturing fertilizers, detergents, acrylic resins,
polyester fibers, emulsifying agents, and other petroleum prod-

In 1993 Mexico had the world’s eighth largest crude petro-
leum reserves, amounting to some 5 percent of the world’s
total. Its proven crude oil reserves amounted to some 51 billion
barrels in 1993, and it had potential reserves of some 250 bil-
lion barrels. The Gulf of Mexico contains approximately 56
percent of Mexico’s proven reserves; 24 percent are located in
the Chicontepec region, 15 percent are located in Tabasco and
Chiapas, and the remainder are elsewhere. Mexico’s reserves
are sufficient to guarantee current production levels for fifty

Since the nationalization of the oil industry in 1938, the
state-owned Pemex has monopolized the production and mar-
keting of hydrocarbons. For decades the government tolerated
Pemex’s waste and inefficiency because the company produced
nearly all public revenues. Problems mounted, however, as a
result of Pemex’s poor administration, low productivity, over-
staffing, and corruption. By the late 1980s, Mexico’s economic
recovery had come to depend heavily on reform of the state oil

After becoming president, Salinas moved swiftly to modern-
ize and reorganize the oil industry. He began by breaking the
power of the oil workers’ union, which had contributed to
Pemex’s overall inefficiency by forcing the hiring of tens of
thousands of unnecessary workers. In January 1989, Salinas
had the union’s notoriously corrupt chief, Joaquin Hernandez



Mexico: A Country Study

Galicia (nicknamed La Quina), arrested on weapons and mur-
der charges. He was subsequently convicted and received a
thirty-five-year jail sentence. Salinas then ordered Pemex to
monitor and account for its internal finances. To reduce
expenses, the company began massive employee layoffs, slash-
ing its workforce by 94,000 (some 44 percent of the total pay-
roll) by mid-1993.

In April 1992, natural gas from a Pemex pipeline leaked into
the Guadalajara sewer system, triggering an explosion that
killed more than 200 people. The tragedy underscored
Pemex’s bureaucratic unwieldiness and lack of public account-
ability. Following the explosion, Salinas accelerated the organi-
zational restructuring of Pemex. The restructuring resulted in
the company’s division in 1992 into four subsidiaries: Pemex-
Exploration and Production (E&P), Pemex-Refining, Pemex-
Gas and Basic Petrochemicals, and Pemex-Petrochemicals.
Each unit became a semiautonomous profit center, directing
its own budget, planning, personnel, and other functions. The
subsidiaries deal with each other on the basis of formal con-
tracts and market-based transfer prices. The governing board
of each subsidiary is composed entirely of public-sector offi-

Pemex’s new focus on profitability and cost-cutting allowed
the company to save US$50 million in 1990, US$70 million in

1991, and US$100 million in 1992. Moreover, Pemex reduced
its total labor force from 210,000 workers in 1989 to 116,000 in

1992, with more dismissals expected later. A new collective con-
tract permitted the company to seek the lowest bidder for
maintenance, transport, slop oil disposal, and other work for-
merly reserved for the official oil workers’ union. Pemex’s new
focus on efficiency and productivity also cleared the way for
previously unthinkable foreign involvement in Mexico’s oil sec-
tor. Several United States oil exploration companies received
permission to drill under contract in Mexico, and foreign part-
nerships were authorized.

In August 1993, it became known that the government was
considering proposals to allow private companies to buy, sell,
and distribute imported gasoline, natural gas, and petrochemi-
cals, and to invest in new pipelines. Although the government
reiterated in 1992 its longstanding pledge not to denationalize
the oil industry, some observers viewed the reorganization of
Pemex as a move to improve the company’s efficiency and prof-
itability as a prelude to privatization. Denationalization would


The Economy

require amending the constitution of 1917, which mandated
state ownership and exploitation of hydrocarbons.

During 1995 Pemex proceeded with its plans to divest its sec-
ondary petrochemicals plants and allow private investment in
the storage, transportation, and distribution of natural gas. In
late 1995, Pemex began to divest itself of sixty-one petrochemi-
cal plants.

In early 1996, the government unveiled its Program for the
Development and Restructuring of the Energy Sector. The pro-
gram estimates the minimum investment required by the
petroleum sector by the year 2000 to be 250 billion new pesos
(at 1995 prices). The private sector is expected to provide 49
billion new pesos of this amount. The plan is intended to
increase Mexico’s petroleum exports, improve its competitive-
ness in the international energy market, and contribute to
more balanced regional development (see table 9, Appendix).


Mexico generated a total 127 billion kilowatt-hours (kWh) of
electricity in 1991. Of this total, thermal (coal-, oil-, or gas-
fired) plants generated 94 billion kWh (74 percent), hydro-
electric plants generated 24 billion kWh (19 percent), nuclear
plants generated 4 billion kWh (3 percent), and geothermal
and other plants generated 5 billion kWh (4 percent). Mexico
had more than 27,000 megawatts of electricity generating
capacity in 1992, roughly the level of domestic demand. Net
domestic electricity consumption in 1992 was 118 billion kWh,
including 24 billion kWh of hydroelectric power. In 1992
Mexico’s thermal plants generated 95 billion kWh of electricity,
hydroelectric plants generated 25 billion kWh, and nuclear
plants generated 4 billion kWh.

Interest revived in nuclear power generation during the late
1980s. In 1989 the much-delayed 1,300-megawatt Laguna
Verde nuclear reactor began partial operation (654 mega-
watts), and in 1990 it produced 2.9 million megawatt-hours of
electricity. A second reactor with similar capacity became oper-
ational at Laguna Verde in 1994.

Mexico’s electric power companies were nationalized during
the 1960s, and the public sector monopolized electricity gener-
ation. In 1992 the state-run Federal Electricity Commission
(Comision Federal de Electricidad — CFE) accounted for about
90 percent of gross electricity generation. In May 1991, the gov-
ernment enacted legal reforms allowing private companies to


Mexico: A Country Study

generate electricity either for their own consumption or for
sale to the CFE or small-scale consumers in rural or remote
area-megawatt power plants by 2005.

Nonfuel Mining

In 1994 the mining sector accounted for some 2 percent of
GDP and 1 percent of export earnings. It employed 230,000
people in 1988. Although Mexico had approximately 2,000
mining companies in 1989, the industry was highly concen-
trated, with four companies producing two-thirds of the coun-
try’s total mineral output. These companies were the Mexico
Industrial Mining Group, Inc. (Grupo Industrial Minera
Mexico, Sociedad Anonima — IMMSA), Sanluis Industrial Cor-
poration (Corporacion Industrial Sanluis), Frisco Enterprises
(Empresas Frisco), and Penoles Industries (Industrias

During the 1960s, the government progressively Mexican-
ized the mining industry, most of which had previously been
foreign-owned. A new mining law in 1961 required majority
Mexican ownership and management of all mining companies.
Within ten years, most companies had been Mexicanized. The
government granted new concessions only to Mexican-owned
enterprises and encouraged the growth of small and medium-
sized operations.

The state vastly expanded its involvement in mining during
the 1970s. The 1975 mining law restricted foreign companies
to 34 percent participation in mining concessions on national
reserves and in exploitation of certain minerals such as coal
and iron ore. The government monopolized exploitation of oil
and gas, phosphate rock, potassium, sulfur, and uranium. By
1980 it owned more than 40 percent of shareholders’ equity in
all mining activity. In 1983 mines owned by or affiliated with
the state mining development commission were responsible for
87 percent of copper output, 76 percent of sulfur output, 28
percent of gold and silver, 27 percent of iron ore, 25 percent of
coal, 18 percent of lead, and 10 percent of zinc.

The mining sector grew at an annual average of only 0.4 per-
cent between 1983 and 1989. This stagnation resulted from
outmoded mining technology, heavy government regulation,
insufficient investment, and low world prices. The government
responded in 1982 with a ten-year program to sell most of the
state’s forty-two mining properties. By early 1987, 46 percent of
total mineral output was privately produced, and 42 percent


Strip mining in northern Mexico
Courtesy Inter-American Development Bank

came from state companies. In 1988 the government sold the
Mexican Copper Company (Compama Mexicana de Cobre) to
private buyers, and in 1990 it privatized the country’s largest
open-pit copper mine, that of the Cananea Mining Company
(Compama Minera de Cananea), now called Mexicana Com-
pama de Cananea, despite a strike by the company’s 3,800
workers to block the sale.

In the early 1990s, silver was the most valuable subsector in
Mexico’s mining industry (see table 10, Appendix). The coun-
try regained its historical position as the world’s leading pro-
ducer of silver following the opening in 1983 of the world’s
largest silver mine at Real de Angeles in the state of Zacatecas,
which in 1990 produced 290,000 kilograms of silver. Mexico
produced 2,300 tons of silver in 1994, representing more than
16 percent of world silver output. Most of Mexico’s silver out-
put came from the states of Zacatecas (39 percent), Durango
(15 percent), Chihuahua (14 percent), Guanajuato (7 per-
cent), Sonora (6 percent), and Hidalgo (5 percent).

Mexico’s gold output stood at 14,400 kilograms in 1994. The
Guanajuato area accounted for almost one-third of Mexico’s
annual gold production. This region’s output decreased by


Mexico: A Country Study

about 1,000 kilograms between 1991 and 1992, slightly offset-
ting the increase of 900 kilograms of gold production from
Sonora. Other important gold-producing areas were the San
Dimas district of Durango and several small mines in Sinaloa.
In 1992 Mexican and foreign mining companies showed
increased interest in exploring for gold in the states of Sonora,
Baja California Norte, Chihuahua, Durango, and Sinaloa.
Some foreign companies established wholly foreign-owned
exploration enterprises by means of investment trusts.

In the early 1990s, Mexico was the world’s seventh largest
producer of copper. Copper ore output fluctuated in the late
1980s and early 1990s, averaging 282,500 tons per year between
1987 and 1991. Output fell slightly to 266,200 tons in 1992.
Production of refined copper rose steadily from 140,800 tons
in 1988 to 302,600 tons in 1994. Silver prices fell and copper
prices rose in the late 1980s and early 1990s, increasing the
value of Mexico’s copper output over that of silver for the first
time in several decades. Mexico’s copper output was valued at
US$663 million in 1992.

Mexico’s western mining zone, which runs from the states of
Baja California Norte, Sonora, Sinaloa, and western Chihua-
hua southward to Chiapas, is the country’s main source of cop-
per. The bulk of Mexico’s 1992 copper output came from
Sonora, where the country’s three largest mines — La Caridad,
Cananea, and Maria — are located. The Mexican Copper Com-
pany was Mexico’s leading copper producer with 52 percent of
total output, followed by the Mexican Compama de Cananea
with 23 percent.

In 1994 Mexico produced 163,700 tons of lead and 356,900
tons of zinc. Mexico’s production of zinc constituted 4 percent
of world output in 1992, and zinc ranked second among
domestically mined minerals in terms of value, after copper but
ahead of silver. Mine production of lead amounted to 5 per-
cent of world lead output in 1992, and that mineral ranked
fifth among domestically mined minerals in terms of value,
ahead of gold. The most important producers of zinc and lead
were Frisco Enterprises and Penoles Industries, which together
produced more than 80 percent of Mexico’s total supply of
these minerals. More than 60 percent of Mexico’s lead and zinc
output came from the state of Chihuahua, while much of the
remainder came from the states of Zacatecas, Hidalgo, and San
Luis Potosf.


The Economy

In 1992 Mexico produced some 5.5 million tons of coal, and
it had an estimated 1.7 billion tons of coal reserves. Further
development, however, was not seen as commercially viable.
The country consumed some 5.8 million tons of coal in 1992.
In 1990 Mexico produced iron ore with a metal content of 5.3
million tons, most of it from Cerro el Mercado, Las Truchas,
and Peha Colorado, at the mouth of the Rio Balsas, on the
Pacific coast. Most of Mexico’s coal came from the Sabinas
basin, about 100 kilometers north of Monterrey.

Transportation and Telecommunications

Mexico has one of the most extensive highway networks in
Latin America, linking nearly all areas of the national territory.
In 1994 Mexico had 242,000 kilometers of roads, of which
85,000 kilometers were paved (including more than 3,100 kilo-
meters of expressways), 40,000 kilometers were gravel or cob-
blestone, 62,000 kilometers were improved earth, and 55,000
kilometers were unimproved dirt roads. The highway system
includes federal roads, state roads (for which the federal gov-
ernment provides 50 percent of construction costs), and local
roads (for which the federal government contributes 30 per-
cent of costs) (see fig. 10).

The most heavily traveled highway routes form a triangle
linking Mexico City with the large population and industrial
centers of Guadalajara and Monterrey, as well as with the main
port city of Veracruz. The Inter-American Highway begins at
the northern border city of Nuevo Laredo and runs through
Monterrey and Mexico City, where it turns southeastward
toward Oaxaca and then directly eastward into Chiapas and
northwestern Guatemala. Mexico has three major federal high-
ways: the Baja California Dorsal Highway, which runs the
length of the peninsula from Tijuana to Cabo San Lucas; the
Trans-Mexico Highway, which roughly parallels the United
States border between Tijuana on the Pacific coast and Mata-
moros on the Gulf of Mexico; and the Pacific Coast Highway,
which extends from Tijuana to Tapachula on the Guatemalan

Although extensive, much of Mexico’s public highway system
is in poor condition as a result of insufficient investment in
road maintenance and an overreliance on heavy trucks to haul
overland cargo. According to the World Bank (see Glossary),


Mexico: A Country Study

in 1994, 61 percent of Mexican public roads were in poor con-
dition, 29 percent were in fair condition, and only 10 percent
were in good condition. In the early 1990s, the Salinas govern-
ment took steps to reduce the strain on the public highway sys-
tem by granting concessions to the private sector to build 6,600
kilometers of toll roads by 1994. The newly built toll roads are
in better condition than the public highways, but tolls, which
were driven up as a result of construction cost overruns, have
been too expensive to divert a significant share of commercial
traffic from the public roads.

In 1992 total vehicle traffic in Mexico included 7.5 million
automobiles, 3.9 million trucks, and more than 106,000 buses.
In 1995 there were 12.1 million registered vehicles in Mexico.
Intercity bus service is extensive, with bus service generally con-
sidered fair to good on most intercity routes. Despite the avail-
ability of mass transit, the proliferation of buses and
automobiles in greater Mexico City has far outpaced the capi-
tal’s road building and highway expansion capabilities, causing
chronic urban traffic congestion and exacerbating Mexico
City’s legendary smog (see Environmental Conditions, ch. 2).


The predominantly state-owned Mexican railroad system is
extensive, consisting in 1994 of 20,425 kilometers of 1.435-
meter, standard-gauge line and ninety kilometers of 0.914-
meter narrow-gauge line. A 102-kilometer section of line
between Mexico City and Queretaro is electrified.

The largest rail line is the state-owned Mexican National
Railways (Ferrocarriles Nacionales Mexicanos — FNM), which
operates on about 70 percent of the total trackage and carries
some 80 percent of total rail traffic. The second largest net-
work, also state-owned, is the Pacific Railroad, which links
Nogales and Guadalajara. The three smaller government-
owned lines are the Chihuahua to Pacific Railroad, the Sonora
to Baja California Railroad, and the United Railroads of the

Several Mexican cities have rail links with the United States,
including Ciudad Juarez, Laredo, Piedras Negras, Reynosa,
Matamoros, Nogales, Naco, and Agua Prieta. The Mexican rail
system also connects with Central American lines through Gua-

In 1992 FNM’s rolling stock consisted of 1,575 diesel loco-
motives and 42,240 freight cars. In addition, some 60,000 pri-







Figure 1 0. Transportation Network, 1 996


The Economy

vately owned freight cars were in service. In 1992 FNM carried
49 million tons of freight, representing 12 percent of all long-
haul freight traffic in Mexico.

Railroads were only lightly used by passengers in the early
1990s, accounting for just 2 percent of total intercity passenger
travel. In 1992 FNM carried almost 15 million passengers on its
fleet of more than 800 passenger rail vehicles. In 1993 it began
gradually privatizing its passenger operations by means of con-
cessions to private carriers. In 1995 the Mexican congress
passed legislation allowing private investment in railways under
fifty-year concessions. Private enterprises were allowed to oper-
ate various portions of the rail network, provide train services,
and operate railyards and terminals.

Despite its abundant mileage and rolling stock, the Mexican
railroad system was generally considered to be antiquated and
inefficient in the early 1990s. Corporate respondents to the
World Bank’s 1994 survey of commercial users of Mexican
transportation services rated the state-owned rail network as
the most poorly performing component of Mexico’s national
transportation system. Inadequate maintenance, mismanage-
ment, and corruption were cited as major impediments to reli-
able service. In 1991 only 68 percent of locomotives were
available for use at any given time, and terminal operations
were so poorly managed that only 20 percent of shipment time
was spent en route. To avoid delay, spoilage, and loss of mer-
chandise, Mexican companies attempted whenever possible to
bypass the rail system altogether by relying heavily on long-haul
trucks, which accounted for 88 percent of all overland cargo
travel in 1992. The inefficiency of the railroad system was con-
sidered a major impediment to Mexican commercial competi-
tiveness under the new NAFTA trading system.

Rapid Transit

In 1969 Mexico City opened its subway system (Metro). By
1993 it comprised eight lines with 135 stations and a total route
length of 158 kilometers (of which ninety-two kilometers were
underground) . The Metro is a heavy-rail network consisting of
more than 250 nine-car trains traveling on 1.435-meter auxil-
iary-guide rails. A computerized system of traffic control is used
in conjunction with human operators on each train. In 1991
the system handled 1.4 billion passenger journeys. The Federal
District’s System of Electric Transport (Sistema de Transporte
Electrico — STE), which oversees rapid transit services in



Mexico: A Country Study

greater Mexico City, plans to expand the Metro system to fif-
teen lines totaling 315 kilometers route-length by 2010. At that
point, it predicts daily ridership will exceed 12 million passen-

In the early 1990s, Guadalajara inaugurated a modest sub-
way system. Two electrified light-rail lines cross in the city’s cen-
ter and extend to nearby suburbs. Tracks are underground in
the downtown area and use existing rail right of ways in outly-
ing areas.

Ports and Shipping

Mexico has some 10,000 kilometers of coastline but few navi-
gable rivers and no good natural harbors. The country’s 2,900
kilometers of navigable rivers and coastal canals play only a
minor role in the transportation system. In the early 1990s,
Mexico’s seventy-five maritime ports and nine river ports han-
dled 65 percent of imports and 70 percent of nonpetroleum
exports. The flow of freight through Mexican ports exceeded
163 million tons of cargo in 1990, representing 31 percent of
total freight carried by all modes. The five largest ports —
Tampico, Veracruz, Guaymas, Mazatlan, and Manzanillo — han-
dled 80 percent of Mexico’s ocean freight.

Veracruz is an important port for general cargo, especially
goods headed to and from Mexico City. The port of Tampico
primarily handles petroleum and petroleum products. Other
important seaports include Coatzacoalcos on the Gulf of
Mexico coast and Acapulco on the Pacific. Two new Pacific
ports — Pichilingue and Topolobampo — were built in the early
1990s, and another was built on the Gulf of Mexico coast at
Progreso, in the state of Yucatan. Between 1989 and 1994, some
US$700 million was spent on port development, more than
half of that amount provided by the private sector.

Mexico’s system of state-owned ports is administered by Mex-
ican Ports (Puertos Mexicanos — PM), a decentralized govern-
ment agency established in 1989 to oversee the rationalization
and streamlining of port operations. To increase the quality of
service in the shipping sector and thereby enhance Mexico’s
export performance, the government announced in 1992 that
it would sell management concessions for nine ports — includ-
ing Acapulco, Lazaro Cardenas, and Manzanillo — to private
buyers. In 1994 ownership of the ports of Altamira, Acapulco,
Guaymas, and Tampico passed to the private sector. Mexico
expected to complete construction by 1996 of a 437-kilometer


Eastbound train at Orizaba on Mexico City-Veracruz route, Mexico’s

first rail line
Courtesy Rodolfo Garcia

coastal canal between Matamoros and Tampico, intended to
connect with the United States Intracoastal Waterway system
through the Rio Bravo del Norte (Rio Grande).

In 1994 the Mexican merchant marine consisted of fifty-
eight vessels of more than 1,000 gross registered tons, includ-
ing thirty-two oil tankers owned and operated by Pemex. The
state-owned Maritime Transport of Mexico (Transporte Man-
timo de Mexico) operated most of the other ships. Maritime
freight is about evenly distributed between coastal and ocean
shipping, whereas most seaborne passenger travel is coastal.

Air Transportation

Mexico’s air transportation system is generally considered
adequate to handle projected levels of passenger and freight
traffic through the end of the 1990s. In 1994 Mexico had a
total of 1,585 operational airfields or airstrips, of which 202
had permanent-surface runways. Forty-four international and
thirty-eight domestic airports offer services to all major Mexi-
can cities. Mexico’s principal airport and main air transporta-
tion hub is Benito Juarez International Airport, on the


Mexico: A Country Study

outskirts of Mexico City. Other major airports at Monterrey,
Guadalajara, Merida, and Cancun also handle large volumes of
air traffic.

Air transport services consist overwhelmingly of passenger
travel, with air freight representing only 0.03 percent by weight
of total cargo transported by all modes in 1994. Mexico’s prox-
imity and extensive overland and maritime links to the United
States, its main trading partner, account in large measure for
the relatively light use of aircraft to transport freight.

In 1992 Mexico had seventy-seven domestic airlines, of
which two, Aeronaves de Mexico (Aeromexico) and Mexican
Aviation Company (Compania Mexicana de Aviacion — Mexi-
cana), had international stature. Aeromexico was sold to pri-
vate investors in June 1989 after it had declared bankruptcy.
Widely known in the past as “Aeromaybe” because of unreliable
service, Aeromexico has maintained consistent on-time perfor-
mance since its privatization. Also in 1989, the government
sold half of its 51 percent stake in Mexicana to private inves-

In 1993 Mexican aircraft flew a total of 325 million kilome-
ters and carried 20 million passengers. Mexico has direct air
connections, through Mexicana and Aeromexico, with the
United States, Canada, Europe, Australia, and the rest of Latin
America. In 1994 twenty-eight international airlines provided
regularly scheduled service from Mexico City to major cities in
Europe, Japan, the United States, and the rest of Latin Amer-
ica. In addition, a variety of foreign and domestic air charter
services flew directly to the country’s major resort areas.


In December 1990, Mexico sold its state-owned telephone
system, Mexican Telephone (Telefonos de Mexico — Telmex),
to private investors in the country’s largest and most compli-
cated privatization. The government sold majority voting rights
and a 20 percent stake in Telmex to a consortium of investors
for US$1.8 billion, and it sold US$3.7 billion in shares to the
public in two public offerings. Nevertheless, customers contin-
ued to complain about delays in contacting operators, install-
ing new phones, and receiving service upgrades.

In 1995 the Telmex network had some 8.7 million phone
lines in service. Almost 13 percent of all international calls
from the United States were made to Mexico in 1993, while


Modern port facilities at Veracruz
Courtesy Inter-American Development Bank

more than 90 percent of Mexico’s long-distance calls were
made to the United States.

To improve service quality, Telmex inaugurated a US$30 bil-
lion modernization program in conjunction with its partners,
Southwestern Bell Corporation and France Telecom, in 1993.
In early 1994, the United States telecommunications company
Microwave Communications International (MCI) announced
plans to collaborate with Banamex-Accival Financial Group
(Grupo Financiero Banamex-Accival — Banacci), Mexico’s larg-
est financial group, in building a new long-distance telephone
network in Mexico. The two companies valued the joint ven-
ture at US$1 billion, of which MCI would invest US$450 mil-
lion. In early 1994, telephone industry analysts expected
Mexico’s US$6 billion long-distance telephone market to con-
tinue or exceed its 14 percent annual growth rate. The high
growth rate stemmed from increased telephone communica-
tions between the United States and Mexico resulting from
NAFTA and the government’s stated intention to open the
long-distance market to foreign competition in January 1997.

Mexico uses four Atlantic Ocean satellite ground stations
and one Pacific Ocean satellite ground station of the Interna-


Mexico: A Country Study

tional Telecommunications Satellite Corporation (Intelsat).
Mexico is also connected to the Central American Microwave
System. In 1985 the Mexican-owned Morelos-B domestic tele-
communications satellite was launched from the United States
space shuttle Atlantis. Morelos-B was replaced in 1993 by
another Mexican-owned domestic telecommunications satel-
lite, Solidarity I.


In 1993 Mexico had more than 700 commercial amplitude
modulation (AM) radio stations, including 679 stations operat-
ing on mediumwave, and twenty-two AM shortwave stations.
The country has a number of large commercial radio networks,
including National Radio Network (Radio Cadena Nacional)
and Mexico Radio Programs (Radio Programas de Mexico).
Mexico also has some cultural radio stations, operated either
by public agencies or by educational institutions. In 1996
Mexico had 21 million radios.

The most important state-run radio systems are the Mexican
Radio Institute (Instituto Mexicano de la Radio — IMER),
which operates two networks, Mexico Radio (Radio Mexico)
and Exact Time Radio (Radio la Hora Exacta); the Education
Ministry’s Education Radio (Radio Education), which has a
reputation for objectivity; and Radio UNAM (UNAM Radio),
run by the National Autonomous University of Mexico (Uni-
versidad Nacional Autonoma de Mexico — UNAM). The private
commercial sector is dominated by some twenty radio net-
works. Ninety-two percent of stations belong to a network; 72
percent belong to or are controlled by ten networks; and half
are controlled by the top five. The main networks include the
Acir Group (Grupo Acir), which controls 140 stations and pro-
duces three major news programs daily for national distribu-
tion; the Radio Promotional Organization (Organization
Impulsora de Radio — OIR); Radio and Television Agency
(Agentes de Radio y Television — ARTSA), and Mexico Radio


Introduced in 1950, television reached some 70 percent of
the Mexican population by the early 1990s. In 1995 Mexico
had 326 television stations (almost 25 percent of all stations in
Latin America), most of them owned by or affiliated with the
Mexican Telesystem (Telesistema Mexicano — known popu-


The Economy

larly as Televisa) and the state-run Mexican Institute of Televi-
sion (Instituto Mexicano de Television — Imevision). In 1996
Mexico had about 800 television transmitters and an average of
one television set per 8.9 viewers.

In the early 1990s, Televisa was reportedly the largest com-
munications conglomerate in the developing world. Although
a private corporation, Televisa is very close to the ruling PRI. It
operates three commercial television networks in Mexico and
four stations in the United States. Its main network broadcasts
twenty-four hours a day, and the others broadcast between
twelve and eighteen hours daily. Televisa’s flagship news pro-
gram is “24 Horas,” which has long been the most important
source of news for many Mexicans. Televisa exports 20,000
hours of television programming to other Latin American
countries. In addition to television and radio, Televisa has
interests in newspaper and book publishing; production of
records and home videos; motion picture distribution, advertis-
ing and marketing; and real estate, tourism, and hotels.

The state-run Imevision operates two national television net-
works, as well as several regional and specialized channels. The
government also operates Mexican Republic Television (Tele-
vision de la Republica Mexicana), which broadcasts news and
educational and cultural programs to rural areas, and Cultural
Television of Mexico (Television Cultural de Mexico). A com-
peting network, Television Independiente, operates seven sta-
tions. There are also some twenty independent stations.

In November 1993, the government granted licenses for
sixty-two new local television stations, increasing Televisa’s total
number of stations from 229 to 291. Most of the new stations
are concentrated in northern Mexico. Televisa showed consid-
erable financial strength in 1993, with third-quarter profits of
some US$120 million, up 43 percent from the same period of
1992. The company planned additional large investments in an
effort to maintain its 90 percent share of Mexico’s television
market. Televisa’s main competitor is Television Azteca, which
owns 179 stations in two national networks. Although it com-
manded less than 10 percent of the national television market
in 1993, it is attempting to increase its market share to 24 per-
cent by 2000.


During the 1970s and 1980s, tourism generated more than 3
percent of Mexico’s GNP and between 9 percent and 13 per-


Mexico: A Country Study

cent of its foreign-exchange earnings. Only petroleum gener-
ated more net foreign exchange. The number of arriving
tourists rose steadily from more than 5 million in 1987 to 7 mil-
lion in 1990, despite the peso’s overvaluation during those
years. The number of arrivals subsequently fell to about 6 mil-
lion in 1991 and 1992 as the overvalued peso raised costs for
United States visitors. Mexico had 7 million foreign arrivals in
1994, and tourism generated total revenue of US$4.2 billion.

Eighty-three percent of foreign visitors to Mexico in 1993
came from the United States, many of them from the border
states for short visits. Eight percent of foreign visitors came
from Europe, and 6 percent from other Latin American coun-
tries. In 1990 United States residents made some 70 million vis-
its to Mexico’s border towns, and Mexicans made 88 million
visits to United States border towns. In 1984 visitors to Mexican
border areas spent some US$1.3 billion, compared with US$2.0
billion spent by all tourists in the interior. By 1990 border visi-
tors spent more than US$2.5 billion, while visitors to the inte-
rior spent approximately US$4.0 billion. In 1991 each foreign
tourist spent an average amount of US$594. In 1992 Mexico
had some 8,000 hotels and some 353,000 hotel rooms.

In the early 1990s, Mexico City was the most popular destina-
tion for foreign tourists, followed by Acapulco. In the mid-
1970s, the official tourist development agency, Fonatur, began
to promote new tourist areas, including Zihuatanejo, Ixtapa,
and Puerto Escondido on the Pacific coast, and Cancun on the
Caribbean coast. In 1986 and 1987, work began on the new
Pacific coast tourist resort of Huatulco. Mexico’s tourist indus-
try is particularly vulnerable to external shocks such as natural
disasters and bad weather, international incidents, and varia-
tions in the exchange rate, as well as changes in national regu-
lations. For instance, a 1985 earthquake that had an epicenter
near Acapulco damaged many of Mexico City’s central hotels.
In September 1987, Hurricane Gilbert struck Cancun, causing
US$80 million worth of damage that took three months to

Foreign Trade

Stabilization and adjustment policies implemented by the
Mexican government during the 1980s caused a sharp fall in
imports and a corresponding increase in exports. Average real
exchange rates rose, domestic demand contracted, and the
government provided lucrative export incentives, making


The Economy

exportation the principal path to profitable growth. The 1982
peso devaluation caused Mexico’s imports to decline 60 per-
cent in value to US$8.6 billion by the end of 1983. After years
of running chronic trade deficits, Mexico achieved a net trade
surplus of US$13.8 billion in 1993.


After 1983 the government eliminated import license
requirements, official import prices, and quantitative restric-
tions. This trade liberalization program sought to make Mexi-
can producers more competitive by giving them access to
affordable inputs. By 1985 the share of total imports subject to
licensing requirements had fallen from 75 percent to 38 per-
cent. In 1986 Mexico acceded to the General Agreement on
Tariffs and Trade (GATT), now the World Trade Organization
(WTO), and in 1987 it agreed to a major liberalization of bilat-
eral trade relations with the United States.

As a consequence of trade liberalization, the share of domes-
tic output protected by import licenses fell from 92 percent in
June 1985 to 18 percent by the end of 1990. The maximum tar-
iff was lowered from 100 percent in 1985 to 20 percent in 1987,
and the weighted average tariff fell from 29 percent in 1985 to
12 percent by the end of 1990. The volume of imports subject
to entry permits was reduced from 96 percent of the total in
1982 to 4 percent by 1992. The remaining export controls
applied mainly to food products, pharmaceuticals, and petro-
leum and oil derivatives.

The value of Mexico’s imports rose steadily from US$50 bil-
lion in 1991 to US$79 billion in 1994 (19 percent of GDP). It
rose in response to the recovery of domestic demand (espe-
cially for food products); the new peso’s new stability; trade lib-
eralization; and growth of the nontraditional export sector,
which required significant capital and intermediate inputs (see
table 11, Appendix). As a result of the new peso devaluation of
December 1994, Mexico’s imports in 1995 were US$73 billion,
9 percent lower than the 1994 figure. In 1995 Mexico imported
US$5 billion worth of consumer goods (7 percent of total
imports), US$9 billion worth of capital goods (12 percent),
and US$59 billion worth of intermediate goods (81 percent).
Renewed growth and the new peso’s real appreciation were
expected to increase demand for foreign products during
1996. Imports rose by 12 percent in the first quarter of 1996 to
US$20 billion.


Mexico: A Country Study

The government tried to curb the early 1990s’ rise in
imports by acting against perceived unfair trade practices by
other countries. In early 1993, Mexico retaliated against
alleged dumping of United States, Republic of Korea (South
Korean), and Chinese goods by imposing compensatory quotas
on brass locks, pencils, candles, fiber products, sodium carbon-
ate, and hydrogen peroxide. Antidumping duties were applied
to steel products, and all importers were required to produce
certification of origin.

But Mexico also was subject to complaints by other coun-
tries, which charged that Mexico itself engaged in unfair prac-
tices. The European Community (now the European Union —
EU) and Japan lodged complaints with the GATT about
Mexico’s invocation of sanitary standards in late 1992 to limit
meat imports.


The mid-1980s decline in world petroleum prices caused the
value of Mexico’s exports to fall from US$24 billion in 1984 to
US$16 billion in 1986, reflecting the country’s continued heavy
dependence on petroleum export revenue. Lower oil earnings
helped to reduce Mexico’s trade surplus to almost US$5 billion
in 1986. Export revenue rose slightly to US$21 billion in 1987,
as oil prices began to recover. Exports continued to rise mod-
estly but steadily thereafter, reaching US$28 billion in 1992.
The government promoted exports vigorously in an effort to
close a trade gap that began in 1989 and widened in subse-
quent years. The state-run Foreign Commerce Bank channeled
finance to a wide range of potential exporters, especially small
and medium-sized firms and agricultural and fishing enter-
prises. In 1993 it provided US$350 million for the tourist sec-
tor, representing a 35 percent increase over 1992.

The value of Mexico’s exports rose steadily from US$43 bil-
lion in 1991 to US$61 billion in 1994, despite the new peso’s
overvaluation. The currency devaluation of late 1994 contrib-
uted to a significant jump in the value of Mexico’s exports to
US$80 billion in 1995, a 31 percent increase over the previous

Total export earnings for the first quarter of 1996 were
US$22 billion. Manufactures accounted for US$67 billion (84
percent) of Mexico’s exports in 1995, followed by oil exports
(US$9 billion or 11 percent), agricultural products (US$4 bil-
lion, or 5 percent), and mining products (US$545 million, or


The Economy

less than 1 percent). This improved export performance
resulted from the new peso devaluation, weak domestic
demand because of the recession, new export opportunities
opened by NAFTA, and improved commodity prices. Export
growth was expected to slow during 1996, as a result of recov-
ery of domestic demand, expected drops in the prices of oil
and other nonfood items, capacity constraints, and strengthen-
ing of the new peso.

Composition of Exports

The 1985 peso devaluations and the 1986 oil price collapse
produced a dramatic shift in the composition of Mexico’s
exports. The value of Mexico’s oil exports plummeted from
US$13 billion in 1985 to less than US$6 billion in 1986. The oil
sector’s share of total export revenue consequently fell from 78
percent in 1982 to 42 percent in 1987. Oil export revenue
recovered in 1987 to US$7.9 billion as petroleum prices rose.
Prompted by the peso devaluation and low domestic demand,
nonoil exports rose 41 percent in 1986 and an additional 24
percent in 1987. In 1987 manufactured exports (especially
engineering and chemical products) constituted 48 percent of
total exports by value, eclipsing petroleum and reducing
Mexico’s vulnerability to fluctuations in the world oil price.
Between 1988 and 1991, petroleum exports fell 22 percent in
value because of lower world oil prices and declining sales,
while nonoil exports rose 15 percent in value. By 1992 petro-
leum contributed only 30 percent of total exports by value.

In 1994 petroleum and its derivatives accounted for US$7
billion, or 12 percent, of Mexico’s total export revenue of
US$62 billion. Transport equipment and machinery exports
earned US$33 billion, or 54 percent of total exports. Chemicals
earned US$3 billion, or 5 percent, and metals and manufac-
tured metal products earned US$3 billion, or 5 percent. Agri-
cultural, processed food, beverage, and tobacco products
accounted for US$3 billion, or 5 percent of total exports.

Trade Balance

Import growth outstripped export performance in the early
1990s, producing a steadily widening trade deficit. In 1988
Mexico’s trade surplus had fallen to US$1.7 billion, and the fol-
lowing year it turned into a US$645 million deficit as imports
rose 24 percent against export growth of 11 percent. In 1990
the trade deficit widened to US$4.4 billion, despite a rise in


Mexico: A Country Study

international oil prices resulting from the Persian Gulf War.
Petroleum exports rose slightly, and nonoil exports grew 12
percent in 1990, producing total export earnings growth of 18
percent. But total imports increased a much more rapid 34 per-
cent. In 1991 the trade gap widened further to US$7.3 billion,
as the level of exports remained steady while imports grew 22
percent. Mexico’s trade deficit widened again to US$15.9 bil-
lion in 1992. Following a slowdown in import growth in 1993,
the trade deficit increased substantially in 1994, the first year
under NAFTA. Low interest rates and an overvalued new peso
bolstered demand for foreign goods, causing imports to grow
an estimated 19 percent. Spurred by the newly devalued cur-
rency, Mexico’s foreign trade balance swung dramatically back
to a US$7.1 billion surplus in 1995, effectively eliminating the
country’s current account deficit. The trade surplus was
US$1.7 billion for the first quarter of 1996, compared with the
first quarter of 1995 figure of US$647 million.

Direction of Trade

Largely as a result of trade liberalization, two-way trade
between Mexico and the United States doubled between 1986
and 1990. In the late 1980s, Mexico expanded its exports to the
United States at an average annual rate of 15 percent. Even
prior to NAFTA, more than 85 percent of Mexican exports
entered the United States duty-free (see table 12, Appendix).

In 1994 the value of two-way United States-Mexico trade
amounted to more than US$100 billion. Mexico exported
US$53 billion worth of products to the United States and
imported US$56 billion worth of United States goods. Mexico’s
commercial reliance on the United States has increased in
recent years, despite efforts to diversify its export markets and
import sources. In 1994 the United States took 85 percent of all
Mexican exports (up from 83 percent in 1993). Sales to Mexico
accounted for only 8 percent of all United States exports in
1991. Sales to Canada amounted to more than US$1.5 billion,
or 2 percent of Mexican exports in 1994; sales to Japan
amounted to US$997 million, or less than 2 percent. Spain,
Germany, and France together accounted for nearly US$2 bil-
lion, or 3 percent, of Mexico’s export revenue in 1994. In 1994
the United States provided 69 percent of Mexico’s imports,
Japan 6 percent, Germany 4 percent, Canada 2 percent, and
France 2 percent.


The Economy

Mexico’s sales to other Latin American countries totaled
US$2.9 billion in 1993, a 65 percent increase over 1988. Never-
theless, these sales constituted only some 10 percent of
Mexico’s total exports by value. Two-way trade between Mexico
and the rest of Latin America increased to about 250 percent
between 1988 and 1993. Mexico’s most important trading part-
ners in Latin America were Argentina and Brazil.

Trade Agreements

In 1991 Mexico and Chile signed a bilateral free-trade agree-
ment under which each country would gradually reduce tariffs
on three categories of products. As a result, Chilean exports to
Mexico increased 112 percent between 1991 and 1993, and an
additional 33 percent (US$89 million in value) between Janu-
ary and August 1993.

Mexico also formed a trilateral free-trade association with
Colombia and Venezuela known as the Group of Three (G-3).
Negotiations were concluded in 1993, and the agreement took
effect during 1994. Tariffs on most products were to be gradu-
ally eliminated over ten years (twelve years for automobiles).
The agreement was expected to create a US$373 billion eco-
nomic market encompassing some 145 million people. In
October 1993, the G-3 countries announced their intention to
establish a wider Association of Caribbean States (ACS). In
March 1994, Mexico and Costa Rica negotiated a bilateral free-
trade agreement that was expected to provide a model for simi-
lar agreements between Mexico and other Central American
countries. Mexico also discussed a free-trade agreement with
the EU and membership in the new Asia-Pacific Economic
Cooperation forum.

President Salinas’s most significant commercial achieve-
ment, however, was the successful conclusion of NAFTA negoti-
ations with the United States and Canada in 1993. Salinas
sought free trade with the United States largely in order to
increase private investment, attract new technology, and ensure
continued access for Mexican goods to the United States mar-
ket. Mexico’s neoliberal development strategy depended on
promotion of manufactured exports, which in turn required
expanded United States-Mexican trade. Salinas also sought a
free-trade agreement with the United States and Canada to
reassure potential investors of the continuity and stability of
Mexican economic policy, and to provide formal legal proce-
dures for resolving commercial disputes. The agreement pro-


Mexico: A Country Study

vided for ongoing consultation on issues of mutual concern to
member countries, including health regulations, product subsi-
dies, rules of origin, and quality standards (see President Sali-
nas, ch. 1).

NAFTA provides for the elimination of Mexican tariffs on
5,900 categories of imports from the United States and Canada
(mostly machinery and intermediate goods), representing
more than 40 percent of Mexico’s overall trade. Other prod-
ucts are reclassified in a simplified tariff list having four rate
bands — 5 percent, 10 percent, 15 percent, and 20 percent. The
United States eliminated tariffs on 3,100 additional categories
of Mexican goods, bringing to 80 percent the portion of all
Mexican exports to the United States that will be free from tar-
iffs. Some 4,200 categories already had been included in the
General System of Preferences (GSP) and were thus already
exempt from tariffs. The treaty eliminates some tariffs immedi-
ately and phases out the rest over five, ten, or fifteen years, with
vulnerable industries in the United States and Mexico receiv-
ing the longest protection.

Mexico’s deadlines for lowering trade barriers are generally
longer than those for Canada and the United States. The latter
countries are required to lift immediately their tariffs on some
80 percent of Mexico’s nonoil exports, while Mexico must
grant immediate free entry to 42 percent of United States and
Canadian exports. Special rules apply for trade in textiles, vehi-
cles and auto parts, and agricultural products. The treaty also
governs trade in services, including overland transport, tele-
communications, and financial services, and it includes provi-
sions for the liberalization of government procurement.

NAFTA requires Mexico to abolish protectionist limitations
on foreign investment (except in the energy sector), allow free
profit repatriation by United States and Canadian firms, and
guarantee investors against property seizure without full com-
pensation. The treaty allows foreign banks to take up to 25 per-
cent of Mexico’s banking market and allows foreign brokerages
to take 30 percent of the securities business by 2004, after
which all restrictions are to be eliminated.

NAFTA is expected to create a free-trade area with a com-
bined population of 356 million and a GDP of more than US$6
trillion. It commits future Mexican governments to preserve
liberal trade and investment policies, and it maintains pressure
on Mexico to increase its trade competitiveness. The agree-
ment is likely to spur both foreign investment and increased


Interior of shopping mall, Monterrey
Courtesy Inter-American Development Bank

exports, which will allow expansion of private consumption
and domestic investment as monetary controls are relaxed and
interest rates fall. NAFTA’s accession clause (Article 2005)
allows any country or group of countries to join the treaty pro-
vided it negotiates mutually acceptable terms. New accessions
are to be ratified according to each member’s “standard
approval procedures.” Each current member enjoys an effec-
tive veto over admission of new members. Although Mexico has
not opposed Chilean accession, it is unlikely to support a Cen-
tral American application for fear of competition from these
countries for new textile factories and other light industrial

Balance of Payments

Current Account

From the mid-1970s through the early 1980s, Mexico faced
persistent balance-of-payments problems resulting from the
government’s efforts to defend the overvalued peso while
incurring massive external debts. By the late 1970s, oil prices
had begun to fall, and international interest rates rose sharply,
throwing Mexico’s external payments so far out of balance that


Mexico: A Country Study

by mid-1982 the country could no longer service its external
debt. The government was forced to declare a unilateral mora-
torium on debt service, devalue the peso, and drastically
reduce public spending. By 1985 these measures had brought
the current account back into surplus and eliminated the gov-
ernment’s fiscal deficit, but at the cost of foregone economic
growth and a sharp deterioration in the capital account.
Throughout the early and mid-1980s, Mexico suffered a net
capital outflow as a result of external debt service, high domes-
tic capital flight, and weak foreign investment.

International oil prices collapsed in 1986, pushing Mexico’s
current account back into deficit. Meanwhile, debt-equity
exchanges and capital repatriation produced a significant capi-
tal inflow and brought the capital account back into surplus.
The external account balance was again reversed in 1987, as
higher oil prices, increased nonoil revenue, a new commercial
bank loan, and continued capital repatriation generated a
US$4 billion current-account surplus, while heavy debt service
obligations forced the capital account into a US$2.5 billion def-

Mexico’s trade deficit rose sharply between 1989 and 1994,
pushing the current account deeply into deficit. The current-
account deficit ballooned from US$4 billion in 1989 to US$29
billion in 1994. Capital inflows were adequate to cover the cur-
rent-account deficit through 1993, but began to falter in
response to a series of political crises in 1994. The dramatic
improvement in Mexico’s trade balance between 1994 and
1995 enabled the current-account deficit to fall to US$654 mil-
lion in 1995 and to be nearly eliminated by early 1996. This
development increased the likelihood that the new peso would
be strengthened by capital inflows, especially portfolio invest-

Capital Account

Mexico hemorrhaged capital through most of the 1980s.
According to Morgan Guaranty, some US$53 billion fled the
country between 1975 and 1985. Total capital flight from
Mexico between 1983 and 1988 was approximately US$18 bil-
lion. Debt amortization was another major negative item in the
capital account. According to the World Bank, debt repay-
ments averaged US$5 billion annually between 1985 and 1990.
Capital began to return to Mexico in 1986 and 1987, as inves-
tors and lenders were attracted by high domestic interest rates.


The Economy

The trend was reversed in 1988 as a result of an exchange-rate
freeze, domestic interest-rate reductions, competition from
higher United States interest rates, and political uncertainty.
But capital flows were positive again between 1989 and 1993.

In November 1993, the Mexican government announced
that cumulative foreign investment between December 1988
and November 1993 was US$34 billion, exceeding by 40 per-
cent the government’s original target. United States direct
investment in Mexico more than doubled between 1986 and
1993, to US$23 billion. United States-based multinationals pro-
vided more than 60 percent of foreign direct investment in
Mexico at the end of 1992. During 1993 foreign investors vastly
increased their holdings of Mexican stocks and bonds, produc-
ing a huge inflow of portfolio investment. In October 1993, for-
eign investors held 29 percent of Mexican stocks and 74
percent of bonds.

Foreign investment for all of 1993 reached a record US$16
billion, an increase of 87 percent over 1992. Some two-thirds of
this amount (US$11 billion) was portfolio investment, while
US$12 billion went to projects approved by the National For-
eign Investment Commission (Comision Nacional de Inversion
Extranjera — CNIE) and the remaining US$3 billion went to
investments approved in the government’s official register. The
manufacturing sector received 47 percent of the new invest-
ment, and the services sector received 30 percent. The capital
inflow boosted Mexico’s capital-account surplus to US$16 bil-
lion between January and June 1993, representing a 35 percent
increase over the same period of 1992. The government was
counting on the capital inflow to ensure a continued large cap-
ital account surplus with which to balance the current-account

Mexico’s capital account registered a US$15 billion surplus
in 1995, mainly because of the country’s huge increase in bor-
rowing. Loan disbursements to Mexico rose from US$7 billion
in 1994 to US$27 billion in 1995. Foreign direct investment
dropped by US$4 billion to a total of US$7 billion for the year,
while stock-market investment plunged from US$4 billion in
1994 to US$519 million in 1995. The capital-account surplus
allowed Mexico’s international reserves to recover from a low
of US$3.5 billion in January 1995 to US$15.7 billion by year’s


Mexico: A Country Study

Foreign Investment Regulation

Restrictions on direct foreign investment were eased during
the administrations of presidents de la Madrid and Salinas. In
1990 the government revised Mexico’s 1973 foreign investment
law, opening up to foreign investment certain sectors of the
economy that previously had been restricted to Mexican
nationals or to the state. The new regulations permitted up to
100 percent foreign ownership in many industries.

However, in 1992 the government continued to retain sole
rights to large parts of the economy, including oil and natural
gas production, uranium production and treatment, basic
petrochemical production, rail transport, and electricity distri-
bution. Economic sectors reserved for Mexican nationals
included radio and television, gas distribution, forestry, road
transport, and domestic sea and air transport. The government
limited foreign investors to 30 percent ownership of commer-
cial banks, 40 percent ownership of secondary petrochemical
and automotive plants, and 49 percent ownership of financial
services, insurance, and telecommunications enterprises. How-
ever, foreign investors could obtain majority ownership of cer-
tain activities by means of a fideicomiso, or trust.

In November 1993, the government announced a new for-
eign-investment law that vastly expanded foreign-investment
opportunities in Mexico. The new law replaced Mexico’s pro-
tectionist 1973 investment code and united numerous regula-
tory changes that Salinas previously had imposed by decree
without congressional approval. The new law allowed foreign-
ers to invest directly in industrial, commercial, hotel, and time-
share developments along Mexico’s coast and borders,
although such investment had to be carried out through Mexi-
can companies. Foreigners previously had been prohibited
from owning property within fifty kilometers of Mexico’s bor-
ders, and their investments in areas beyond fifty kilometers had
to be carried out through bank trusts. In practice, however, for-
eigners already had invested in many of the listed border indus-
tries and areas through complex trust and stock ownership
arrangements, although risk and bureaucratic requirements
had deterred some potential investors and financiers.

The new investment code also opened the air transportation
sector to 25 percent direct foreign investment and the second-
ary petrochemical sector to full 100 percent direct foreign
investment. Mining also was opened to 100 percent direct for-
eign ownership; previously foreigners could provide 100 per-


The Economy

cent investment but had to invest through bank trusts for
limited periods of time. Other sectors opened to foreign inves-
tors included railroad-related services, ports, farmland, courier
services, and cross-border cargo transport. The new code elimi-
nated performance requirements previously imposed upon
foreign investors, along with minimum domestic content

The Future of the Economy

The market-oriented structural reforms of the 1980s and
early 1990s transformed Mexico’s economy from a highly pro-
tectionist, public-sector-dominated system to a generally open,
deregulated “emerging market.” President Salinas’s moves to
privatize and deregulate large sectors of the Mexican economy
elicited widespread support from international investors and
the advanced industrial nations. With its positive effect on
trade and capital flows, NAFTA was widely interpreted by Mexi-
can decision makers as a validation of their market-oriented
economic policies. The currency collapse of December 1994
and the ensuing deep recession, however, erased the economic
gains that Mexico had achieved in previous years, shook the
nation’s political stability, and depressed hopes for an early
return to growth.

Although Mexico remained in a difficult economic condi-
tion in mid-1996, the worst of the recession had passed and the
country appeared headed toward recovery. The economy regis-
tered positive growth in the second quarter of 1996, inflation
and interest rates abated, and portfolio investment returned, as
reflected in Mexico’s rising stock exchange index. Despite con-
tinuing problems exacerbated by low investor confidence, ana-
lysts agreed that Mexico’s economy in the mid-1990s was
fundamentally sound and capable of long-term expansion.

* * *

Mexico’s postwar economic growth and development poli-
cies are reviewed in James M. Cypher’s State and Capital in
Mexico, Roger Hansen’s The Politics of Mexican Development, and
Clark W. Reynolds’s The Mexican Economy. The best examina-
tions of Mexican economic policy during the 1970s and 1980s
are John Sheahan’s Conflict and Change in Mexican Economic
Strategy and Nora Lus tig’s Mexico: The Remaking of an Economy.


Mexico: A Country Study

Denise Dresser’s Neopopulist Solutions to Neoliberal Problems:
Mexico’s National Solidarity Program offers an in-depth analysis of
the structure and political implications of Pronasol, the Salinas
administration’s major anti-poverty program.

The United States Department of Agriculture maintains
extensive statistical data on a variety of Mexican agricultural
products, and its annual reports on various crops provide
detailed information on specific sectors. Among the best treat-
ments of Mexico’s agricultural policy are the volume edited by
James Austin and Gustavo Esteva, Food Policy in Mexico, and
Steven Sanderson’s The Transformation of Mexican Agriculture.
Government-business relations are examined in Roderic A.
Camp’s Entrepreneurs and Politics in Twentieth-Century Mexico and
The Government and Private Sector in Contemporary Mexico, edited
by Sylvia Maxfield and Ricardo Anzaldua.

The United States Department of Energy’s International
Energy Annual provides statistical data on Mexican oil produc-
tion and reserves. Petroleum policy is examined in Judith Gen-
tleman’s Mexican Oil and Dependent Development and Laura
Randall’s The Political Economy of Mexican Oil. Among the best
examinations of Mexico’s international economic relations are
David Barkin’s Distorted Development and Van R. Whiting, Jr.’s
The Political Economy of Foreign Investment in Mexico. (For further
information and complete citations, see Bibliography.)


Chapter 4. Government and Politics

A representation of the Mexican coat of arms — an eagle standing on a cactus,
with a snake in its mouth — -from a painting by Diego Rivera

attributed the origins of their political system to the Revolution
of 1910-20. They cite the constitution of 1917, a sweeping doc-
ument that capped nearly a decade of civil war among rival
regional militias, as the foundation of their modern political
institutions and practices. Mexico’s governing institutions and
political culture also bear the imprint of three centuries of
Spanish colonial rule. Mexicans’ adherence to a highly codi-
fied civil law tradition, their acceptance of heavy state involve-
ment in business and civic affairs, and the deference accorded
the executive over other branches of government can be traced
to the administrative and legal practices of the colonial period.
Finally, the traumatic experiences of the nineteenth century,
including foreign military occupations and the loss of half of
the national territory to the United States, as well as the disillu-
sion sown by a series of unconstitutional regimes, continue to
have a profound impact on contemporary political culture.

During the 1920s, President Plutarco Ellas Calles (1924-28)
reorganized Mexican politics along corporatist (see Glossary)
lines as a way to contain latent social conflicts. Calles expanded
the government bureaucracy to enable it to mediate among
rival constituencies and to dispense state funds to organizations
supportive of the “official” party. Calles also created new
umbrella organizations that lumped together disparate groups
according to broad functional categories. The newly created
interest groups depended heavily on the state for their financ-
ing and were required to maintain strong ties to the ruling
party. By grafting corporatist institutions onto Mexico’s histori-
cally fractious political system at a time when ideologies of the
extreme left and right were gaining support throughout the
world, Mexico’s leaders avoided a return to the widespread vio-
lence that had engulfed their country during the 1910s and
early 1920s. Subsequently, the relatively inclusive nature of
Mexican corporatism and the firm foundations of civilian
supremacy over the military prevented Mexico from following
the pattern of alternating civilian and military regimes that
characterized most other Latin American countries in the
twentieth century.

One of Calles’s successors, Lazaro Cardenas (1934-40),
revived populism as a force in national politics by redistribut-


Mexico: A Country Study

ing land to landless peasants under a state-sponsored reincar-
nation of communal farming known as the ejido (see Glossary)
system. Cardenas also emphasized nationalism as a force in
Mexican politics by expropriating the holdings of foreign oil
corporations and creating a new national oil company Carde-
nas’s reforms of the late 1930s bolstered the legitimacy of the
government while further concentrating power in the presi-
dent and the Institutional Revolutionary Party (Partido Revolu-
cionario Institucional — PRI), the “official” party of the
Revolution. By the early 1940s, the political processes and insti-
tutions that would broadly define Mexican politics for the next
forty years were well established: a strong federal government
dominated by a civilian president and his loyalists within the
ruling party, a symbiotic relationship between the state and the
official party, a regular and orderly rotation of power among
rival factions within a de facto single-party system, and a highly
structured corporatist relationship between the state and gov-
ernment-sponsored constituent groups.

During the financial crisis of the 1980s, the stable, ritualistic
pattern of Mexican politics instituted by Calles and Cardenas
began to break down. As public funding for a variety of pro-
grams dried up, the state’s role in the economy was scaled back,
and the clientelist relationships developed over four decades
between government agencies and legally recognized constitu-
ent groups were weakened. Seeking to establish a basis for
future economic growth, the governments of Miguel de la
Madrid Hurtado (1982-88) and Carlos Salinas de Gortari
(1988-94) carried out a structural adjustment program that
systematically rolled back state ownership and regulation of key
industries. They also eliminated long-standing protectionist
legislation that had made Mexico one of the most closed econ-
omies in the world and lifted the constitutional prohibition on
the sale of ejido land to allow it to be converted to larger, more
efficient farms. In the mid-1980s, an internal rift emerged
between the populist and the more technocratic wings of the
ruling party over the market reforms and the authoritarian
nature of the PRI-dominated political system. The economic
reforms initiated by President de la Madrid had been opposed
by many members of the PRI’s core agrarian and labor constit-
uencies. These groups rejected privatization and the elimina-
tion of economic subsidies for consumer goods and services.
The naming of Salinas, a United States-educated technocrat, as
de la Madrid’s successor was also repudiated by the leftist fac-


Government and Politics

tion of the PRI leadership. This internal rift developed into the
first major mass defection from the PRI ranks when Cuauhte-
moc Cardenas Solorzano, son of the former president, left the
party to contest the 1988 presidential election as head of a coa-
lition of leftist parties.

Since the late 1980s, the PRI has defeated serious electoral
challenges to its central role in Mexican politics from parties of
the left and right. During his presidency, Salinas liberalized the
electoral system but further concentrated power in the execu-
tive. The main objectives of the Salinas administration were to
restructure the Mexican economy and to integrate Mexico into
the global market, rather than to democratize the political sys-
tem. Nevertheless, the electoral reforms enacted by Salinas
under domestic and international pressure for democratiza-
tion set the stage for competitive, internationally monitored
presidential and congressional elections in 1994.

After a strongly contested presidential campaign marred by
the assassination of its original candidate, the PRI maintained
its hold on the presidency with the election of yet another
United States-educated technocrat, Ernesto Zedillo Ponce de
Leon, in August 1994. Zedillo’s victory preserved the PRI’s
dubious distinction as the world’s longest-ruling political party.
The PRI victory also presented Zedillo and his party with the
unenviable challenge of guiding Mexico through a difficult
and uncertain period of economic dislocation and broad polit-
ical realignments. By the mid-1990s, most observers believed
that the PRI-dominated political system begun in the 1920s was
in an advanced state of decay and that a transitional period
marked by a greater pluralism of organized political activity was
at hand. How this transition would unfold, and whether it
would ultimately lead to a more participatory and competitive
political process across the spectrum of Mexican society, was
yet to be determined.

Constitutional History

Nineteenth-Century Constitutions

The roots of the Mexican republic can be traced to two doc-
uments drafted during the early independence struggle against
Spain: Los sentimientos de la nacion (1813), by Jose Maria More-
los y Pavon, and the Constitution of Apatzingan (1814). These
tracts introduced the ideal of a republic based on liberal politi-
cal institutions and respect for individual rights. Mexico’s inde-


Mexico: A Country Study

pendence was attained, however, by an alliance of liberal and
ultraconservative forces under the leadership of Agustm de
Iturbide (see Wars of Independence, 1810-21, ch. 1). Iturbide’s
Plan of Iguala proposed an indigenous constitutional monar-
chy, rather than a republic, as the alternative to Spanish rule.
By assuming imperial powers following the victory over Spanish
colonial forces in 1821, Iturbide continued the Iberian practice
of plenipotentiary rule by the chief executive.

Mexico’s first republican constitution was the Acta Constitu-
tiva de la Federacion Mexicana (Constituent Act of the Mexi-
can Federation), which was promulgated in 1824, following the
forced resignation of Iturbide and the breakup of the short-
lived Mexican Empire (see The Abortive Empire, 1821-23, ch.
1). A liberal document modeled largely on the United States
constitution, the constitution of 1824 established a federal
republic with a divided central government. To avoid the
abuses of executive authority experienced under Iturbide, the
constitution required the president to share power and respon-
sibility with a bicameral congress and the federal judiciary.
Breaking with the Spanish colonial legacy of centralism, the
constitution instituted a strong federal system, wherein presi-
dents were to be indirectly elected every four years by a simple
majority vote of the republic’s nineteen state legislatures.

A document of dubious relevance, the constitution of 1824
was never fully observed by the politico-military leadership of
the early Mexican republic. The survival of two of its most
important principles, federalism and congressional authority,
was more a reflection of the de facto decentralization of power
in early nineteenth-century Mexico than of a generalized
observance of the rule of law. Many provisions of the constitu-
tion of 1824 and subsequent nineteenth-century constitutions
were simply ignored by the combative regional caudillos
(strongmen) who dominated national politics. The most com-
monly breached constitutional principle was that of an orderly,
electoral process of presidential succession. The violent over-
throw of governments and the perpetuation in office of power-
ful presidents were problems that would plague Mexico
throughout the rest of the nineteenth century and into the rev-
olutionary period. Between 1824 and 1857, only one president,
Guadalupe Victoria, completed his term and handed over
power to an elected successor (see Centralism and the Caudillo
State, 1836-55, ch. 1).


Government and Politics

In 1833 the conservative president and military caudillo,
Antonio Lopez de Santa Anna Perez de Lebron, suspended the
1824 constitution and imposed a new national charter known
as the Siete Leyes (Seven Laws). The Siete Leyes was a reaction-
ary document that strengthened the powers of the presidency,
militarized the federal government, and raised property quali-
fications for voting.

After three decades of political instability stemming from
unrestrained power struggles between liberal and conservative
elites, a new reformist constitution was promulgated in 1857 by
the liberals, who had gained the upper hand. The 1857 consti-
tution was reminiscent of the 1824 charter but was noteworthy
for its introduction of major reform laws restricting military
and clerical fueros (privileges) and clerical property rights. The
new constitution also introduced a bill of rights, abolished sla-
very, and reestablished a strong national congress as a unicam-
eral body. The clerical reform laws, moderate in comparison to
the strongly anticlerical constitution of 1917, nevertheless gal-
vanized the conservative opposition and led to a three-year civil
war. Although the liberal forces under President Benito Juarez
eventually prevailed, the conflict left Mexico divided and
deeply in debt.

Using the excuse of collecting compensation for damage
incurred during the civil war, the French landed troops in Ver-
acruz. The French government, hoping to reestablish a French
empire in the Americas, allied itself with conservative and
church forces in Mexico and sent French troops to take Mexico
City (see Civil War and the French Intervention, ch. 1). French
troops entered the capital in 1863, and an empire under the
Austrian archduke Ferdinand Maximilian Joseph von Habs-
burg was declared. Republican forces retreated to the far
north, and for four years Mexico had two governments.

Bowing to pressure from the United States and responding
to the increased belligerency of Prussia, Napoleon III of France
decided to withdraw French troops at the end of 1866. The
conservative forces in Mexico, disillusioned by Maximilian,
threw their support to Juarez. Before the last French troops
had boarded their ships in Veracruz, Maximilian had surren-
dered, and the republican forces again controlled the entire

Although the constitution of 1857 was restored, its demo-
cratic principles were increasingly violated in the decades to
follow. Juarez was reelected twice amidst charges that his


Mexico: A Country Study

administrations were becoming increasingly dictatorial. After
Juarez’s death in 1872, Sebastian Lerdo de Tejada assumed the
presidency. Under Lerdo, a bicameral congress was reinstated.
When Lerdo announced he would run for reelection in 1876,
Jose de la Cruz Porfirio Diaz took control as dictator. For more
than a third of a century, either directly of indirectly, Diaz
ruled Mexico (see The Porfiriato, ch. 1).

The revolutionary years from 1910 to 1917 were a period of
governmental chaos (see The Revolution, 1910-20, ch. 1). Var-
ious groups espousing populist and revolutionary ideals
roamed the country. By 1917 forces under Venustiano
Garranza gradually had consolidated their control of the
nation. Carranza then called a constitutional convention and
presented a draft constitution, similar to the constitution of
1857, to the delegates. Carranza’s moderate faction was out-
numbered by the radicals, however, and numerous anticlerical
and social reform articles were added.

Constitution of 1 91 7

The constitution of 1917, proclaimed on February 5, 1917,
is considered by many to be one of the most radical and com-
prehensive constitutions in modern political history. Although
its social content gave it the title of the first modern socialist
constitution — it preceded the constitution of the former Soviet
Union — the Mexican document replicates many liberal princi-
ples and concepts of the constitution of the United States. The
liberal concepts include federalism, separation of powers, and
a bill of rights. In addition to reaffirming the liberal principles
of the nineteenth-century documents, the 1917 constitution
adds a strong nationalist proclamation, asserting Mexico’s con-
trol over its natural resources. It also recognizes social and
labor rights, separation of church and state, and universal male
suffrage. Reflecting the varied social backgrounds and political
philosophies of its framers, the constitution of 1917 includes
various contradictory provisions, endorsing within the same
text socialism, capitalism, liberal democracy, authoritarian cor-
poratism, and a host of unimplemented provisions for specific
social reforms.

Formally, the constitution prescribes a federal republic con-
sisting of thirty-one states and a federal district. The federal
government is divided into executive, legislative, and judicial
branches, but these branches do not have comparable powers.
Only the president may promulgate a law, by signing it and


Government and Politics

ordering its publication. The executive can veto bills passed by
the legislature, either in whole or by item, and although a veto
may be overridden, there is no constitutional way in which the
president may be forced to sign a bill into law. In addition,
executive-sponsored bills submitted to the Congress take prece-
dence over other business, and the constitution gives the presi-
dent broad authority to issue basic rules (reglamentos) .
Reglamentos have the same legal force as laws and are the source
of most statutory regulations.

The constitution treats many matters of public policy explic-
itly. For example, before being amended in 1992, Article 27
placed stringent restrictions on the ownership of property by
foreigners and the Roman Catholic Church and declared
national ownership of the country’s natural resources (see
Church-State Relations, ch. 2). Religious groups were excluded
from any kind of political activity and were not allowed to par-
ticipate in public education, conduct services outside
churches, or wear clerical dress in public. In its original form,
Article 27 also granted the government broad powers to expro-
priate private property in the public interest and to redistribute

The constitution prescribes an activist state that will ensure
national autonomy and social justice. Thus, in addition to a
charter of individual rights, the constitution provides for a
number of social rights for workers and peasants and their
organizations. In Article 123, the constitution provides what
has been described as “the most advanced labor code in the
world at its time.” It guarantees the right to organize, as well as
an eight-hour workday, and provides for the protection of
women and minors in the workplace. It mandates that the min-
imum wage “should be sufficient to satisfy the normal necessi-
ties of life of the worker,” and establishes the principle of equal
pay for equal work regardless of gender, race, or ethnicity. In
addition, Article 123 clarifies the right to strike. Strikes are
legal when their purpose is to “establish equilibrium between
the diverse factors of production, harmonizing the rights of
labor with those of capital.” The article further establishes arbi-
tration and conciliation boards made up of equal numbers of
management, labor representatives, and one government rep-
resentative. Although many of these provisions were not imple-
mented until 1931, Article 123 mandates the incorporation of
organized labor into the formal political process and serves as


Mexico: A Country Study

a basis for labor’s claim to a preeminent status in national poli-

Government Structure


The presidency is the paramount institution, not only of the
Mexican state, but of the entire Mexican political system. Crit-
ics have pejoratively labeled the presidency the “six-year mon-
archy” because of the seemingly unchecked power that
historically has resided in the office. Much of the aura of presi-
dential power derives from the president’s direct and unchal-
lenged control over both the state apparatus and the ruling
political party, the PRI.

Presidents are directly elected by a simple majority of regis-
tered voters in the thirty-one states and the Federal District.
The president holds the formal titles of chief of state, head of
government, and commander in chief of the armed forces (see
fig. 11). Presidential candidates must be at least thirty-five years
old on election day and must be not only Mexican citizens by
birth but also the offspring of Mexican citizens by birth (this
clause was amended in 1994 to make the children of natural-
ized citizens eligible for the presidency, effective in 1999). To
be eligible for the presidency, a candidate must reside legally in
Mexico during the year preceding the election. The candidate
cannot have held a cabinet post or a governorship, nor have
been on active military duty during the six months prior to the
election. Priests and ministers of religious denominations are
barred from holding public office.

The presidential term of six years, commonly known as the
sexenio, has determined the cyclical character of Mexican poli-
tics since the late 1930s. A president can never be reelected,
and there is no vice president. If the presidential office falls
vacant during the first two years of a sexenio, the congress desig-
nates an interim president, who, in turn, must call a special
presidential election to complete the term. If the vacancy
occurs during the latter four years of a sexenio, the congress des-
ignates a provisional president for the remainder of the term.

In addition to the president’s prerogatives in legislative mat-
ters, he or she may freely appoint and dismiss cabinet officials
and almost all employees of the executive branch. Subject to
traditionally routine ratification by the Senate, the president
appoints ambassadors, consuls general, magistrates of the


Government and Politics

Supreme Court, and the mayor of the Federal District. The
president also appoints the magistrates of the Supreme Court
of the Federal District, subject to ratification by the Chamber
of Deputies. Presidential appointment authority also extends
downward through the federal bureaucracy to a wide assort-
ment of midlevel offices in the secretariats, other cabinet-level
agencies, semiautonomous agencies, and parastatal (see Glos-
sary) enterprises. This extensive appointment authority pro-
vides a formidable source of patronage for incoming
administrations and has been an important factor in ensuring
the regular, orderly turnover in office of competing elite fac-
tions within the official party.

Despite the nominally federal character of the Mexican
state, presidents have historically played a decisive role in the
selection and removal of state governors, all of whom, until
1991, were members of the PRI. President Salinas was particu-
larly assertive in bringing about the resignations of PRI gover-
nors widely believed to have been elected through blatant
fraud. In some cases, Salinas annuled the election and
appointed the opposition candidate governor.

The president confers broad powers on cabinet secretaries,
although the cabinet rarely meets as a single body. There is a
hierarchy of influence among the different cabinet posts, and
the power of a minister or secretary varies, depending on the
priorities set by a particular president as well as the resources
available at the time. Traditionally, the secretary of interior has
been an influential figure and often has been chosen to suc-
ceed the president. During the Jose Lopez Portillo y Pachecho
sexenio (1976-82), the Secretariat of Programming and Budget
(Secretaria de Programacion y Presupuesto — SPP) was reorga-
nized to coordinate all government agencies, supervise the
budget, and design the national development program. Until
its merger with the Secretariat of Finance and Public Credit
(Secretana de Hacienda y Credito Publico) in 1992, the SPP
was extremely influential, becoming the launching point for
the presidencies of de la Madrid and Salinas.

In 1994, President Salinas broke with the pattern of selecting
SPP economists by designating the Secretary of Social Develop-
ment, Luis Donaldo Colosio Murrieta, as the PRI presidential
nominee. This departure from the established practice of nom-
inating ministers with economic portfolios appeared to reflect
a reemergence of a social welfare agenda within the PRI after
years of orthodox economic policies. When Colosio was assassi-


Mexico: A Country Study

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Government and Politics

nated during the presidential campaign, Salinas returned to
the fold by selecting Zedillo, a former education and SPP secre-
tary who was then serving as Colosio’s campaign manager, to
replace the fallen candidate.

One of the unique features of the Mexican presidency has
been the highly secretive and mysterious process of presiden-
tial succession. Since the 1930s, Mexico’s PRI presidents have
enjoyed the right to personally name their successor, a privi-
lege known as the dedazo (tap). The prerogative of choosing
one’s successor has allowed outgoing presidents to select indi-
viduals who embody either change or continuity with past poli-
cies, as demanded by circumstances and public opinion. Over
the years, the skillful selection of a successor to the president
has become an important element of the adaptability that has
characterized the PRI-dominated system.

During the last two years of a sexenio, a president selects a
short list of candidates for the PRI nomination from among an
inner circle within the cabinet. Before announcing the nomi-
nee, an event known as the destape (unveiling), a president
gauges public opinion of the candidates. The destape has been
criticized for being undemocratic and anachronistic in the age
of mass communications. Beginning with the elections of 2000,
the PRI’s presidential candidate will be selected by a nominat-
ing convention, similar to that followed by the other major par-


The legislative branch of the Mexican government consists
of a bicameral congress (Congreso de la Union) divided into
an upper chamber, or Senate (Camara de Senadores), and a
lower chamber, or Chamber of Deputies (Camara de Diputa-
dos). As in the United States, both chambers are responsible
for the discussion and approval of legislation and the ratifica-
tion of high-level presidential appointments. In theory, the
power of introducing bills is shared with the executive,
although in practice the executive initiates about 90 percent of
all legislation.

The congress holds two ordinary sessions per year. The first
session begins on November 1 and continues until no later
than December 31; the second session begins on April 15 and
may continue until July 15. A Permanent Committee
(Comision Permanente), consisting of thirty-seven members
(eighteen senators and nineteen deputies), assumes legislative


Mexico: A Country Study

responsibilities during congressional recesses. The president
may call for extraordinary sessions of congress to deal with
important legislation.

Historically, the Senate consisted of sixty-four members, two
members for each state and two representing the Federal Dis-
trict elected by direct vote for six-year terms. However, as part
of the electoral reforms enacted by the Salinas government in
1993, the Senate was doubled in size to 128 members, with one
of each state’s four seats going to whichever party comes in sec-
ond in that state. Since 1986 the Chamber of Deputies has con-
sisted of 500 members, 200 of whom are elected by
proportional representation from among large plurinominal
districts, and the remainder from single-member districts.
Members of the Chamber of Deputies serve three-year terms.
All members of the congress are barred from immediate
reelection but may serve nonconsecutive terms.

The powers of the congress include the right to pass laws,
impose taxes, declare war, approve the national budget,
approve or reject treaties and conventions made with foreign
countries, and ratify diplomatic appointments. The Senate
addresses all matters concerning foreign policy, approves inter-
national agreements, and confirms presidential appointments.
The Chamber of Deputies, much like the United States House
of Representatives, addresses all matters pertaining to the gov-
ernment’s budget and public expenditures. As in the United
States, in cases of impeachment, the Chamber of Deputies has
the power to prosecute, and the Senate acts as the jury. In some
instances, both chambers share certain powers, such as estab-
lishing committees to discuss particular government issues and
question government officials. The deputies have the power to
appoint a provisional president. In the event of impeachment,
the two chambers are convened jointly as a General Congress.
Each legislative chamber has a number of committees that
study and recommend bills. If there is disagreement between
the chambers, a joint committee is appointed to draft a com-
promise version.


The judicial branch of the Mexican government is divided
into federal and state systems. Mexico’s highest court is the
Supreme Court of Justice, located in Mexico City. It consists of
twenty-one magistrates and five auxiliary judges, all appointed


The National Palace, the president’s official work place

Courtesy Arturo Salinas

by the president and confirmed by the Senate or the Perma-
nent Committee.

Mexican supreme court justices must be Mexican citizens by
birth, thirty-five to sixty-five years old, and must have resided in
Mexico and held a law degree during the five years preceding
their nomination. According to the constitution, supreme
court justices are appointed for life but are subject to impeach-
ment by the Chamber of Deputies. In practice, the justices,
along with the entire federal judiciary, traditionally submit
their resignations at the beginning of each sexenio.

The Supreme Court of Justice may meet in joint session or in
separate chambers, depending on the type of case before it.
The high court is divided into four chambers, each with five
justices. These are the Penal Affairs Chamber, Administrative
Affairs Chamber, Civil Affairs Chamber, and Labor Affairs
Chamber. A fifth chamber, the Auxiliary Chamber, is responsi-
ble for the overload of the four regular chambers. Court rul-
ings of both the whole, or plenary, court and the separate
chambers are decided on the basis of majority opinion. Rulings
by the separate chambers may be overturned by the full court.


Mexico: A Country Study

There are three levels of federal courts under the Supreme
Court of Justice: twelve Collegiate Circuit Courts, each with
three magistrates; nine Unitary Circuit Courts, each with six
magistrates; and sixty-eight District Courts, each with one
judge. Federal judges for the lower courts are appointed by the
Supreme Court of Justice. The Collegiate Circuit Courts are
comparable to the United States Courts of Appeals. The Colle-
giate Circuit Courts deal with the protection of individual
rights, most commonly hearing cases where an individual seeks
a writ of amparo, a category of legal protection comparable to a
broad form of habeas corpus that safeguards individual civil
liberties and property rights. The Unitary Circuit Courts also
handle appeals cases. The Collegiate Circuit Courts are located
in Mexico City, Toluca, Guadalajara, Monterrey, Hermosillo,
Puebla, Veracruz, Torreon, San Luis Potosf, Villahermosa,
Morelia, and Mazatlan. The Unitary Circuit Courts are located
in Mexico City, Toluca, Guadalajara, Monterrey, Hermosillo,
Puebla, Merida, Torreon, and Mazatlan.

The Mexican legal system is based on Spanish civil law with
some influence of the common law tradition. Unlike the
United States version of the common law system, under which
the judiciary enjoys broad powers of jurisprudence, Spanish
civil law is based upon strict adherence to legal codes and mini-
mal jurisprudence. The most powerful juridical instrument is
the writ of amparo, which can be invoked against acts by any
government official, including the president. Unlike the
United States system, where courts may rule on basic constitu-
tional matters, the Mexican Supreme Court of Justice is prohib-
ited by the constitution from applying its rulings beyond any
individual case. Within this restricted sphere, the Supreme
Court of Justice generally displays greater independence in
relation to the president than does the legislature, often decid-
ing against the executive in amparo cases. Nevertheless, the
judiciary seldom attempts to thwart the will of the president on
major issues.

State Government

Mexico is divided into thirty-one states and a Federal District
that encompasses Mexico City and its immediate environs.
Each state has its own constitution, modeled on the national
charter, with the right to legislate and levy taxes other than
interstate customs duties. Following the federal organization at
the national level, state (and local) governments also have


Congress building
Courtesy Arturo Salinas
Supreme Court of Justice building
Courtesy Arturo Salinas


Mexico: A Country Study

executive, legislative, and judicial branches. Despite its federal
structure, Mexico’s political system is highly centralized. State
governments depend on Mexico City for much of their reve-
nue, which they, in turn, funnel to municipal governments in a
clientelist fashion. Mexican presidents have historically played
a prominent role in selecting PRI gubernatorial candidates and
in settling state-level electoral disputes. President Salinas was
especially assertive in this regard, having removed or prevented
the seating of eight PRI governors widely believed to have been
fraudulently elected.

The state executive branch is headed by a governor, who is
directly elected by simple majority vote for a six-year term, and,
like the president, may not be reelected. State legislatures are
unicameral, consisting of a single Chamber of Deputies that
meets in two ordinary sessions per year, with extended periods
and extraordinary sessions when needed. Deputies serve three-
year terms and may not be immediately reelected. Legislative
bills may be introduced by the deputies, the state governor, the
state Superior Court of Justice, or by a municipality within a
given state. Replicating the pattern of executive dominance at
the national level, most policy-making authority at the state
level has historically resided in the governor. The state judi-
ciary is headed by a Superior Court of Justice. Justices of the
Superior Courts of Justice are appointed by governors with
approval of the state legislatures. The superior court magis-
trates, in turn, appoint all lower state court judges.

The Federal District, which encompasses Mexico City and its
southern suburbs, has traditionally fallen under the supervi-
sion of the president, who appoints a mayor (regente). In addi-
tion to performing his municipal duties, the mayor also holds
cabinet rank as head of the Department of the Federal District.
In September 1993, the congress approved an electoral reform
package that introduced the indirect election of the mayor of
the Federal District.

The Federal District has local courts and a Representative
Assembly, whose members are elected by proportional repre-
sentation. The assembly, historically a local advisory body with
no real legislative power, is scheduled to elect Federal District
mayors beginning in late 1996.

Local Government

The basic unit of Mexican government is the municipality
(municipio) , more than 2,000 of which were legally in existence


Government and Politics

in 1996. Municipal governments are responsible for a variety of
public services, including water and sewerage; street lighting;
cleaning and maintenance; public safety and traffic; supervi-
sion of slaughterhouses; and the maintenance of parks, gar-
dens, and cemeteries. Municipalities are also free to assist state
and federal governments in the provision of elementary educa-
tion, emergency fire and medical services, environmental pro-
tection, and the maintenance of historical landmarks.

Municipal governments, headed by a mayor or municipal
president (regente) and a municipal council (ayuntamiento) , are
popularly elected for three-year terms. Article 115 of the 1917
constitution proclaims the autonomy of local governments
according to the principle of the free municipality (municipio
libre). Although they are authorized to collect property taxes
and user fees, municipalities have historically lacked the means
to do so, relying mainly on transfers from higher levels of gov-
ernment for approximately 80 percent of their revenues.
Responding to concerns that excessive centralization of politi-
cal power and financial resources would jeopardize long-term
popular support for the PRI, President de la Madrid advocated
reforming intergovernmental relations to allow greater munici-
pal autonomy. De la Madrid’s municipal reform culminated in
the 1984 amendments to Article 115, which expanded munici-
palities’ authority to raise revenue and formulate budgets. The
Salinas administration’s National Solidarity Program (Pro-
grama Nacional de Solidaridad — Pronasol) provided another
source of revenue for municipal governments (see Social
Spending, ch. 2). By bypassing state bureaucracies and chan-
neling federal funds directly to municipalities and community
organizations, Pronasol undermined state governments’ con-
trol over municipal finances, albeit by promoting municipali-
ties’ dependence on the federal government.

The Party System

Institutional Revolutionary Party

The PRI, Mexico’s “official” party, was the country’s preemi-
nent political organization from 1929 until the early 1990s. In
terms of power, it was second only to the president, who also
serves as the party’s effective chief. Until the early 1980s, the
PRI’s position in the Mexican political system was hegemonic,
with opposition parties posing little or no threat to its power
base or its near monopoly of public office. This situation


Mexico: A Country Study

changed during the mid-1980s, as opposition parties of the left
and right began to seriously challenge PRI candidates for local,
state, and national-level offices.

The PRI was founded by Calles in 1929 as the National Revo-
lutionary Party (Partido Nacional Revolucionario — PNR), a
loose confederation of local political bosses and military
strongmen grouped together with labor unions, peasant orga-
nizations, and regional political parties. In its early years, it
served primarily as a means of organizing and containing the
political competition among the leaders of the various revolu-
tionary factions. Calles, operating through the party organiza-
tion, was able to undermine much of the strength of peasant
and labor organizations that affiliated with the party and to
weaken the regional military commanders who had operated
with great autonomy throughout the 1920s. By 1934 Calles was
in control of Mexican politics and government, even after he
left the presidency, largely through his manipulation of the

Between 1934 and 1940, an intense struggle for political
control developed between Calles and the new president,
Cardenas. At the time, Calles represented the conservative ele-
ments of the revolutionary coalition, while Cardenas drew his
support from the more radical political elements. To
strengthen his hand against Calles, Cardenas reunited the
labor and peasant organizations that Calles had earlier frag-
mented and formed two national federations, the National
Peasant Confederation (Confederation Nacional Campesina —
CNC) and the Confederation of Mexican Workers (Confedera-
cion de Trabajadores Mexicanos — CTM). Using these organi-
zations as the bases of his support, Cardenas then reorganized
the PNR in 1938, renaming it the Party of the Mexican Revolu-
tion (Partido de la Revolution Mexicana — PRM), incorporat-
ing the CTM and the CNC and giving the PRM an organization
by sectors: labor, agrarian, popular, and military. The creation
of these groups and their integration into the party marked the
legitimation of the existing interest group organizations and
the transformation of the political system from an elite to a
mass-based system. Within a year, the PRM claimed some 4.3
million members: 2.5 million peasants, 1.3 million workers,
and 500,000 in the popular sector. In 1946 President Manuel
Avila Camacho abolished the military sector, shifted its mem-
bers into the popular sector, and renamed the party the PRI.


Government and Politics

Beginning with the Cardenas administration in the late
1930s, the PRI and its predecessors engineered an unprece-
dented political peace. The overt political intervention by the
military that had characterized the country’s politics through-
out the nineteenth and early twentieth centuries largely disap-
peared when Avila Camacho, the last president who came from
a military background, left office in 1946. For nearly five
decades, there were few episodes of large-scale organized vio-
lence and no revolutionary movements that enjoyed wide-
spread support, despite considerable economic strains between
1968 and 1975 and a difficult period of economic austerity
beginning in 1982.

For the middle class, whose members typically had led rebel-
lions in the past, the PRI provided upward mobility either
through politics (the rule of no reelection opened frequent
opportunities for public office) or through business during the
high-growth period of “stabilizing development” that lasted
from the early 1950s until the late 1960s. The PRI also inte-
grated workers and peasants into the political system by claim-
ing to be the only vehicle able to realize their demands for
labor union rights and land reform. The party operated much
like an urban political machine in the United States. It weak-
ened attempts to form horizontal class- or interest-based politi-
cal alliances within the lower class by dispensing services to
individuals in exchange for their votes. The PRI emphasized
personal relationships between individuals of the lower class
and party and government officials. It distributed political
patronage from the top down to members of organized labor,
the agrarian movement, and the popular sector in accordance
with each group’s relative strength in a given area. Finally, it
used electoral fraud, corruption, bribery, and repression when
necessary to maintain control over individuals and groups.

The PRI has been widely described as a coalition of networks
of aspiring politicians seeking not only positions of power and
prestige but also the concomitant opportunity for personal
enrichment. At the highest levels of the political system, the
major vehicles for corruption have been illegal landholdings
and the manipulation of public-sector enterprises. In the lower
reaches of the party and governmental hierarchies, the pre-
ferred methods of corruption have been bribery, charging the
public for legally free public services, charging members of
unions for positions, nepotism, and outright theft of public
money. This corruption, although condemned by Mexican and


Mexico: A Country Study

foreign observers alike, historically served an important func-
tion in the political system by providing a means of upward
mobility within the system and ensuring that those who were
forced to retire from politics by the principle of no reelection
would have little incentive to seek alternatives outside the PRI

Official corruption reached unprecedented levels during
the 1970s when petroleum revenues surged as a result of
higher oil prices and when newly discovered oil fields in Chia-
pas and the Bahfa de Campeche began producing. Much of the
wealth that flowed into the country through the state oil
monopoly, Mexican Petroleum (Petroleos Mexicanos —
Pemex), was squandered in wasteful and unnecessary projects
and the inflation of payrolls. The main beneficiaries of high-
level graft during this period were the senior executives of the
national oil workers union and high-level PRI functionaries.
This brand of official corruption reached new heights during
the presidency of Lopez Portillo (1976-82), who allegedly
acquired a US$2 million house as a “gift” from the oil workers’
union and was subsequently vilified by the media and the pub-
lic as a symbol of PRI graft.

Public disclosure of the excesses of the Lopez Portillo years,
which came to light during the severe financial crisis of the
early 1980s, had a significant impact on the PRI’s internal poli-
tics as well as on its overall level of public support. Internally,
the severe public backlash against the PRI discredited many
career politicians within the party who had personally bene-
fited from the fiscal profligacy of the Lopez Portillo sexenio, and
created opportunities for an emerging generation of tecnicos
(technocrats) to assume high-level government posts. Many of
these tecnicos were brought into the cabinet by President de la
Madrid to help restore the integrity of the public accounts dur-
ing the early 1980s financial crisis.

During the de la Madrid sexenio (1982-88), the PRI began to
downplay its traditional populist and nationalist agenda and
adopted a probusiness, free-market platform. These changes
produced an intraparty split between the populist wing domi-
nated by politicos (career politicians) and the politically inexpe-
rienced tecnicos. The nomination of Salinas, a Harvard-
educated political economist, as the PRI candidate for the 1988
presidential election triggered the final rupture between these
two groups. Salinas’s nomination prompted two important
party leaders, Cuauhtemoc Cardenas (the son of President


Government and Politics

Cardenas and himself a former governor of Michoacan) and
Porfirio Munoz Ledo (a former PRI secretary general), to
resign from the PRI and create a broad coalition of leftist par-
ties, labor unions, and grassroots organizations united in sup-
port of a presidential bid by Cardenas (see Party of the
Democratic Revolution, this ch.). This leftist faction criticized
the “neoliberal” policies of the de la Madrid government and
called for a return to the party’s traditional populist platform.

Although the PRI party bosses remained loyal to Salinas,
allowing the party to win the July 1988 presidential election,
the 1988 vote was a major psychological blow to the ruling
party. With the 1988 vote, the PRI saw its fifty-year dominance
over the political system come to an almost disastrous end. The
PRI received its lowest margin of victory ever, a dubious 50.7
percent of all votes cast, down from 71.6 percent in 1982 and
98.7 percent in 1976. For the first time since the consolidation
of single-party rule in the 1940s, opposition leaders were
elected to the Senate, and the PRI lost more than one-third of
the seats in the Chamber of Deputies to the two main opposi-
tion forces, the National Action Party (Partido de Accion
Nacional — PAN) and the Cardenas-led coalition. The results of
the 1988 elections were widely viewed as marking the end of
single-party hegemony by the PRI and were even interpreted by
some observers as a prelude to the fragmentation and collapse
of the ruling coalition.

Responding to public pressure for political renewal and
seeking to avoid further rupture in the party ranks, President
Salinas attempted to improve the PRI’s public image without
fundamentally challenging its authoritarian and clientelist
practices. Salinas took steps to clean up the electoral process
and moved forcefully against those elements of the party and
organized labor most closely associated with corruption. How-
ever, Salinas’s anticorruption efforts were by no means system-
atic. In many instances, corrupt officials were dismissed
because of their defiance of the new president rather than for
their venality. Although he continued de la Madrid’s practice of
tapping highly trained technocrats to fill cabinet posts, Salinas
took care not to completely disavow the party’s politico wing in
filling high-level posts. In addition, the new president shrewdly
manipulated state resources through popular programs, such
as Pronasol, in order to recover the support of low-income
Mexicans who had backed Cardenas in 1988.


Mexico: A Country Study

President Salinas’s political maneuvers and a modest eco-
nomic recovery resulted in a better showing for the PRI in the
midterm elections of August 1991. In the races for 300 elec-
toral districts in the Chamber of Deputies, thirty-two Senate
seats, and six governorships, the PRI won 61.4 percent of the
votes cast. This was a sizable increase from the 50 percent
received in the 1988 national election. Overall, the PRI won
290 seats in the Chamber of Deputies, all but one seat in the
Senate, and five of the six contested governorships.

During his administration, Salinas downplayed the corporat-
ist relationships between the state and society instituted by
Cardenas while reaching out to more traditional interest
groups. In his efforts to broaden and democratize the PRI, Sali-
nas distanced the party from the PRI-affiliated labor unions
and ejido associations, while seeking a reconciliation between
the PRI and its historical adversaries, such as foreign investors,
agribusiness, private banks, the Roman Catholic Church, and
export industries. In foreign affairs, the PRI shed much of its
economic nationalism under Salinas, while retaining its inde-
pendence from the United States on regional security matters.
However, even President Salinas was unwilling to seek a consti-
tutional amendment to end public ownership of petroleum
and natural gas deposits, a mainstay of PRI nationalism for
more than sixty years.

The executive organization of the PRI is pyramidal, with the
president of the Republic at the top. The party is headed by a
president and a secretary general, who together direct a
National Executive Committee of the party’s top leaders. At the
party base, there is a National Assembly, which meets every six
years to discuss and review the party’s platform as well as to for-
mally nominate the party’s candidate for the presidency. The
National Assembly also elects the members of the National
Executive Council. Although the party’s presidential candidate
is formally nominated at the National Assembly Congress, in
practice the assembly has served only to ratify the candidate
handpicked by the president through the dedazo. In accor-
dance with political reforms approved in the early 1990s, the
PRI’s National Assembly is expected to assume a much more
significant role in nominating the party’s presidential candi-
date for the election to be held in the year 2000.

National Action Party

Founded in 1939 by Manuel Gomez Moran, the National


Government and Politics

Action Party (Partido de Accion Nacional — PAN) was the first
genuine opposition party to develop in Mexico. The PAN
emerged as a conservative reaction against the nationalizations
and land confiscations undertaken by the Cardenas govern-
ment during the 1930s. The PAN resembled a standard Chris-
tian Democratic party, and its early support derived primarily
from the Roman Catholic Church, the business sector, and
other groups alienated by the left-wing populist reforms of the
Cardenas government. Although the PAN is much more con-
servative than the PRI on social issues, since the mid-1980s the
PAN’s economic program has been almost indistinguishable
from that of the PRI governments it has attempted to supplant.

The PAN has traditionally favored a limited role of the gov-
ernment in the economy, an orientation that has been adopted
by the PRI during the past fifteen years under presidents de la
Madrid, Salinas, and Zedillo. Historically, the PAN also has
campaigned in favor of a breakup of the communal ejidos into
individually owned plots of land. In 1992 the Salinas adminis-
tration introduced radical reforms to the land tenure law that
allowed ejidatarios to sell their plots and to consolidate their
holdings (see Rural Society, ch. 2). This convergence of PRI
and PAN economic programs encouraged the PAN congres-
sional delegation to work closely with the Salinas administra-
tion to pass the government’s sweeping economic reforms. In
an effort to distance itself from the PRI, in the mid-1990s, the
PAN has stressed issues such as the need for democratization,
eradication of government corruption, and additional elec-
toral reforms.

Traditionally, the PAN has had strong support in the coun-
try’s wealthiest and most urbanized regions of the north and
center, particularly in the Federal District, Jalisco, Nuevo Leon,
Puebla, and Sonora. The effects of PAN victories in the north-
ern part of the country since the 1980s are highly significant,
particularly in the states of Baja California Norte, Chihuahua,
Durango, Nuevo Leon, Sinaloa, and Sonora. The PAN has also
displayed political strength in the states of Guanajuato, Jalisco,
and Yucatan. The PAN won the governorships and congres-
sional majorities in Baja California Norte and Chihuahua dur-
ing the Salinas administration, and the local congress in the
state of Guanajuato gave a third governorship to the PAN after
a state election had been plagued with irregularities. The
PAN’s major handicap has been its lack of appeal to urban
labor and peasant groups.


Mexico: A Country Study

The PAN has presented a candidate in every presidential
race since 1946 with the exception of 1976, when its leadership
could not reach consensus on a candidate. It has always been
the main opposition to the PRI, although in the 1988 presiden-
tial election its presidential candidate, Manuel Clouthier, ran
third to Salinas and Cardenas. By 1992 the PAN controlled
more than 100 municipal governments in addition to the three
governorships. With Diego Fernandez de Cevallos as its candi-
date and “por un Mexico sin mentiras” (“for a Mexico without
lies”) as its campaign slogan, the PAN won a comfortable sec-
ond place in the 1994 presidential race. The second-place win
consolidated the PAN’s role as the main opposition political
force in the country.

Democratic Revolutionary Party

The Democratic Revolutionary Party (Partido Revoluciona-
rio Democratico — PRD), established in 1989, evolved from the
National Democratic Front (Frente Democratico Nacional —
FDN), under the leadership of Cuauhtemoc Cardenas. Carde-
nas left the PRI in 1988 in protest over its choice of Salinas, a
free-market reformer, as the PRI’s presidential nominee. The
PRD’s party program emphasizes social welfare concerns and
opposes most of the economic reforms implemented since the

The PRD’s agenda dates back to the populist and nationalist
measures implemented by President Lazaro Cardenas during
the 1930s. The party promotes economic nationalism, as
opposed to the structural neoliberal changes that focus on
increasing trade and foreign investment to boost the Mexican
economy introduced by the PRI during President de la
Madrid’s administration. Although the PRD holds a good part
of the former communist and socialist parties’ rank and file,
the PRD is controlled by former PRI leaders. An estimated 70
percent of its leadership consists of former PRI members, while
30 percent consists of former members of the Mexican commu-
nist and socialist parties. The PRD president, Porfirio Murioz
Ledo, served as president of the PRI during the sexenio of Luis
Echeverria Alvarez. The PRD opposed most of the constitu-
tional amendments passed during the Salinas government, the
most important being the ecclesiastical, agrarian, and electoral
system reforms. Although the PRD is currently recognized as
an opposition voice in the national debate, it remains in a dis-
tant third place in the electoral scenario. Toward the end of


Government and Politics

the 1994 presidential race, the left strongly criticized Cuauhte-
moc Cardenas for having lent qualified support to the broad
principles of the North American Free Trade Agreement
(NAFTA) and the privatization of some state-owned compa-
nies. Despite these changes, Cardenas and the PRD are com-
mitted to greater state control of the economy and propose the
renegotiation of parts of NAFTA with the United States and

Minor Opposition Parties

In 1954 dissident members of the PRI established the
Authentic Party of the Mexican Revolution (Partido Autentico
de la Revolucion Mexicana — PARM). Its political platform,
which is based on the principles of the Mexican Revolution
and the constitution of 1917, is strongly nationalistic. The
PARM has a limited role in national politics, although it was
able to maintain its electoral registration status as well as its
minority representation in the lower chamber until the 1994
elections, when it received less than 0.5 percent of the vote.
The PARM temporarily joined the FDN during the 1988 elec-
tions but broke with the party coalition in 1989.

The Popular Socialist Party (Partido Popular Socialista —
PPS) was first organized in 1948 by a radical sector of the PRI
led by Vicente Lombardo Toledano, the founder of the PRI’s
labor organization. Despite the PPS’s Marxist orientation, its
membership has traditionally supported the official party’s can-
didate in presidential elections, while working closely with the
PRI in most initiatives dealing with the expansion of the gov-
ernment’s role in the economy. In 1988, however, the PPS
broke with tradition and joined the FDN in support of Carde-
nas’s presidential bid. The PPS fielded its own candidate, Mar-
cela Lombardo Otero, in the 1994 presidential election. Otero
received 0.46 percent of the total vote.

The Cardenas Front of the National Reconstruction Party
(Partido del Frente Cardenista de Reconstruction Nacional —
PFCRN), formerly the Socialist Workers’ Party, was established
in 1973 with labor support. It traditionally had worked closely
with the PRI, but joined the FDN in supporting the candidacy
of Cardenas in 1988. The PFCRN ran its own candidate, Rafael
Aguilar Talamantes, in the 1994 presidential race, receiving
0.77 percent of the vote.

Other small political parties that registered for the 1994
presidential election included the Mexican Green Ecologist


Mexico: A Country Study

Party (Partido Verde Ecologista Mexican o — PVEM), the Labor
Party (Partido del Trabajo — PT), and the National Opposition
Union (Union Nacional Opositora — UNO). Support for the
PT and the PVEM is found predominantly in urban areas. The
PT operates mainly in the Federal District, where it made a sur-
prisingly strong showing in 1994.

Of the six small political parties that participated in the 1994
elections (PARM, PFCRN, PPS, PT, PVEM, and UNO), only the
PT and its candidate, Cecilia Soto Gonzalez, received more
than 3 percent of the vote. Under current electoral law, the PT
is the only minor party that may legally contest the next presi-
dential election in 2000.

Institutions of Civil Society

Organized Labor

Labor unions are mostly representative of workers in urban
areas. Most labor unions are affiliated with the PRI through the
Confederation of Mexican Workers (Confederation de Traba-
jadores Mexicanos — CTM), which is associated with some inde-
pendent unions and federations in an umbrella organization
known as the Congress of Labor (Congreso del Trabajo — CT).
During August 1991, the CT confirmed its direct relationship
with the government party in a document called the Political
Agreement Between the PRI and the Organization of the CT.

The CT, considered the labor sector of the PRI, consists of
more than thirty organizations encompassing 85 percent of the
unionized workforce. In the early 1990s, Mexico had an esti-
mated 9.5 million unionized workers. The CT mediates
between the labor unions and the government. At the same
time, it provides the state with a formal mechanism for political
manipulation of the labor force.

The CTM is the largest and most influential organization in
the CT, comprising over 11,000 labor unions with more than 5
million union members. It is considered the spearhead of the
Mexican labor movement. Since 1941 the CTM has been
tightly controlled by its secretary general, Fidel Velazquez, con-
sidered one of the most influential political figures in Mexico.

The second organization within the CT is the Federation of
Unions of Workers in the Service of the State (Federation de
Sindicatos de Trabajadores al Servicio del Estado — FSTSE).
The FSTSE was established in 1938 as an umbrella organization
for labor unions within the federal civil system and other gov-


Government and Politics

ernment-related organizations. In 1990 the FSTSE consisted of
eighty-nine unions with a total membership of 1.8 million

The Revolutionary Confederation of Workers and Peasants
(Confederacion Revolucionaria de Obreros y Campesinos —
CROC) is the third largest labor organization within the CT.
The CROC was established in 1952; since 1980, it has been
under the leadership of Alberto Juarez Blancas. During the
1990s, the CROC had an estimated membership of some
600,000. Other important labor organizations are the Regional
Confederation of Mexican Workers (Confederacion Regional
de Obreros Mexicanos — CROM), the National Federation of
Independent Unions (Federation Nacional de Sindicatos Inde-
pendientes — FNSI), the Confederation of Workers and Peas-
ants (Confederacion de Trabajadores y Campesinos — CTC),
the International Proletarian Movement (Movimiento Prole-
tario Internacional — MPI), the Confederation of Revolution-
ary Workers (Confederacion de Obreros Revolucionarios —
COR), the General Confederation of Workers (Confederacion
General de Trabajadores — CGT), the Authentic Labor Front
(Frente Autentico del Trabajo — FAT), and the Revolutionary
Confederation of Workers (Confederacion Revolucionaria de
Trabajadores — CRT). There are, in addition, some 1.5 million
members of independent unions and company labor organiza-

In theory, labor-management relations are well defined by
the Labor Code, which leaves little margin for bargaining in
labor disputes. All labor unions receive official recognition by
applying to the Secretariat of Labor and Social Welfare. Once it
is officially recognized, a union is protected by the Labor Code,
which details the rights of each official organization to receive
social security payments, to participate in profit sharing, and to
use meeting halls, among many other benefits. The code stipu-
lates that strikes are illegal if unauthorized by the secretariat
and that workers participating in an illegal strike will be subject
to government sanctions and dismissal by their employers.

Corruption, paternalism, and abuse of union funds have tra-
ditionally been rampant in the labor movement. In recent
years, however, the traditional oligarchic leadership of most
Mexican labor unions has been challenged by the rank and
file, as well as by independent unions wishing to end the use of
leadership positions to amass wealth and power. The lack of
support for Salinas’s presidential bid by the leadership of some


Mexico: A Country Study

powerful unions, in particular that of the union of oil workers,
contributed to a change in government relations with union
groups. President Salinas launched an anticorruption cam-
paign during his first year in government, toppling from power
strong labor leaders in corruption-related scandals. Although
the level of corruption and abuse of power has not been sub-
stantially reduced, the political relationship and corporatist
structure between the labor sector and the party are currently
undergoing profound changes. There is a sharp distinction
between two clashing forces in the labor movement: the tradi-
tional leadership that forcefully resists political change and a
new generation that strongly supports the government’s
neoliberal policies currently in place. In the mid-1990s, labor
groups have less impact on Mexican politics than they did in
the past.

Business Organizations

Traditionally, business interests in Mexico are driven by gov-
ernment policies and interests. In addition to participation of
individual businessmen in politics, many business groups are
represented in government agencies and commissions. There
has always been a close connection between the business com-
munity and the different economic cabinets. The most influen-
tial of all business associations is the Confederation of National
Chambers of Commerce (Confederacion de Camaras Naciona-
les de Comercio — Concanaco). The Confederation of Cham-
bers of Industry (Confederacion de Camaras de Industria —
Concamin) serves as the umbrella organization for industrial
associations. There is also the National Chamber of Manufac-
turing Industries (Camara Nacional de la Industria de la Trans-
fer macion — Canacintra), which historically has represented
small and medium-sized businesses. A sharp distinction exists
between small and big business in Mexican politics. Although
technically these organizations are not integrated into a partic-
ular political party, contributions of big business go first to the
PRI to reward government policies that benefit big business
and to make sure that such policies continue. According to PRI
Finance Secretary Oscar Espinoza Villareal, the Mexican pri-
vate sector contributed between 54 and 67 billion new pesos
(for value of the new peso — see Glossary) to the campaigns of
government party candidates for the August 1994 elections.

Business associations such as Concanaco play an active role
in government policy debates. Most of the business sector cur-


Government and Politics

rently supports the reduction of trade barriers, liberal eco-
nomic policies, and conservative labor legislation. The success
of the liberal policies launched during the Salinas sexenio
greatly benefited the Mexican private sector. Thus, relations
between the business community and the PRI improved signifi-
cantly. A clear example of the improved relationship was a
well-publicized gathering held in February 1993, when thirty of
Mexico’s multimillionaires pledged an average US$25 million
each in support of the 1994 PRI election campaign. At the
fund-raising dinner, television baron Emilio Azcarrago, consid-
ered the richest man in Latin America, pledged US$70 million
to the government’s party “in gratitude” for his prosperity dur-
ing the Salinas administration. The great disparity in funding
between the PRI and the opposition during the 1994 electoral
race was clearly attributable to generous contributions from
domestic private enterprises to the PRI.

The Church

Although there has been conflict between church and state
in Mexico since the country’s independence, more than 90
percent of the population remains Roman Catholic, according
to 1990 census estimates. The state feud with the Roman Cath-
olic Church is reflected in the 1917 constitution, which
imposes many restrictions on the influence and privileges of
the clergy in Mexico. The early drafts of the 1917 constitution
banned public religious ceremonies, the establishment of
monastic orders, and property ownership by the Roman Catho-
lic Church, and forbade the clergy from participating in elec-
tions. All church buildings, according to law, were considered
national property, and church ministers had to be Mexican
nationals. The law also prohibited criticism of public law and
institutions, both public and private, by members of the clergy.

Far from bring a traditional conservative force, however, the
Roman Catholic Church has been a strong advocate for social
and political change. In the late 1980s, for example, the clergy
were active in the northern states, condemning electoral fraud
to the extent of threatening to cease celebrating masses unless
there were a recount of the vote. The Roman Catholic Church
was also instrumental throughout the 1980s in demanding rec-
ognition of its legal status and electoral participation for the
clergy. Despite the traditional view of the Roman Catholic
Church as representative or supporter of the elites, the Mexi-
can Roman Catholic Church has emerged during the last


Mexico: A Country Study

decades as the defender of social justice, and the more progres-
sive clergy have worked closely with underprivileged sectors to
increase economic and social reform.

The Salinas administration changed dramatically the rela-
tions between church and state in Mexico (see Church-State
Relations, ch. 2). During the fall of 1991, Salinas’s government
took the first steps toward lifting some restrictions on church
activities and introduced a reform proposal to end constitu-
tional limits on the church. The new law, approved by the Con-
gress in December 1991 and promulgated in January 1992,
amended the constitution of 1917. Under the new law, the
Roman Catholic Church is formally recognized by the state,
the clergy are allowed to vote, the possession of property by
churches is legal, and religion may be taught in private schools.
Mexico also established diplomatic relations with the Vatican,
relations that had been broken in 1867. State and church, nev-
ertheless, remain separate, and church buildings remain state

Protestant groups in Mexico have tended to support the PRI,
in light of the party’s broad appeal. The political alternatives
are not viable options for Mexican Protestants because the
opposition on the right, the PAN, openly represents Roman
Catholicism and groups on the left exclude religion from their
political goals. Toward the latter part of the twentieth century,
the participation of Protestant groups in Mexican politics
increased as Protestants supported efforts aimed at political

Given the country’s anticlerical history, it is highly unlikely
that the Roman Catholic Church will assume a direct role in
Mexican politics in the near future. However, the church’s tra-
ditional commitment to social justice and economic develop-
ment, along with the government redefinition of its
institutional responsibilities, provides the Roman Catholic
Church with a strong voice on future political issues.

The Media

Based on the number of newspapers, publishers, radio sta-
tions, and television networks in the country, Mexico is consid-
ered the media power center of Spanish-speaking Latin
America. Mexico’s mainstream newspapers and periodicals
range in political ideology and independence from the official
government newspaper El National to the left-wing indepen-
dent El Proceso. Although the press was for many years generally


Government and Politics

pro-establishment and supportive of the PRI, it diversified dur-
ing the 1980s to reflect a wider spectrum of opinion. In early
1994, the government postponed its stated plans to sell El
Nacional to private owners but declared that the newspaper
would no longer receive public funding.

The constitution of 1917 explicitly guarantees freedom of
the press. Article 7 forbids prior censorship, and an amend-
ment to Article 6 adopted in 1977 declares that “the right of
information will be guaranteed by the state.” However, these
guarantees are highly qualified in practice. The Press Law of
1917, for instance, restricts the press on matters of personal pri-
vacy, morality, and public health. Many other regulations gov-
ern the news media. The 1960 Law on Radio and Television,
for instance, forbids the broadcast of material deemed offen-
sive to national heroes.

Although nominally independent, the news media are sub-
ject to a variety of mainly indirect economic and political pres-
sures from the government. The Secretariat of Communi-
cations and Transport supervises the news media, granting
publishing and broadcast licenses and ensuring adherence to
the media laws. Successive PRI governments have influenced
the news media by paying individual journalists for favorable
coverage, by restricting access to newsprint and ink (the state
monopolizes the production of both, although this control was
somewhat reduced under President Salinas), by withholding
information from critical journalists, and especially by granting
or withholding government advertising, an important source
of revenue for the press. Many newspapers accept government
payments for the insertion of official announcements disguised
as editorials. Occasionally, the government provides indirect
financial inducements to particular journalists (for example,
by offering them part of the payment for official advertising
run by their newspapers). Some journalists and opposition
political parties have accused the government of trying to con-
ceal the extent of official subsidies to journalists by redirecting
payoffs through the PRI’s Office of Information.

Government tolerance of press freedoms varies according
to the sensitivities of the president in office. Traditionally, the
media avoid direct criticism of an incumbent president. On
sensitive issues affecting the government, the press provides
only minimal coverage. Among the many unwritten rules is
one that says that journalists are expected to respect the image
of the president and other high-level government officials.


Mexico: A Country Study

In essence, government policies may be criticized, but
elected individuals must not be ridiculed. Since the early
1980s, the trend toward a more open political debate has
brought greater tolerance of criticism in the media. Some
argue that this tolerance, which has occurred faster than the
increasing democratization of the political system, has defini-
tively contributed to increasing public awareness of the need
for changes within the Mexican political system.

Television is highly biased toward the official party, as illus-
trated by the open support the Televisa network gives to the
government. Televisa is part of Mexican Telesystem (Telesis-
tema Mexicano), considered the biggest communications con-
glomerate in the developing world, as well as one of the world’s
major transnational media empires. Televisa’s political and eco-
nomic influence in Mexico is extensive. Aside from the owner-
ship of television and radio stations, it has significant interests
in newsprint and publishing, record production, home videos,
cinemas, advertising and marketing, real estate, tourism,
sports, and the food processing and transport industries.

Mexico City has fifteen newspapers; its dailies account for
more than 50 percent of the national circulation. In 1994 there
were eight newspapers in Mexico City with a daily circulation of
more than 100,000 issues: Esto (450,000), LaPrensa (300,000),
Novedades (240,000), Ovaciones (220,000), El Heraldo de Mexico
(209,600), Excelsior (200,000), El Financiero (135,000), and El
Universal (122,000). Excelsior is the most prestigious national
daily and one of the most prominent newspapers in Latin
America, known for its breadth of coverage, analytical style,
and relative independence. The oldest of the traditional news-
papers is El Universal, closely associated with the government
throughout the 1970s, but currently known for its indepen-
dence in reporting. El Nacional is the official newspaper of the
federal government. The largest newspaper group is the Orga-
nization Editorial Mexicana (OEM), which owns some ninety
newspapers throughout the country. The second largest pub-
lishing group is Novedades Editores, which is part of the Tele-
sistema Mexicano conglomerate. Some of the leading daily
newspapers, such as Excelsior and La Prensa, are run as coopera-

There are five national news agencies: Notimex, Infomex,
Noti-Accion, Notipress, and Agencia Mexicana de Infor-
macion. Infomex is the largest, with almost 100 offices
throughout the country and some twenty foreign correspon-


Government and Politics

dents. All leading international agencies have bureaus in
Mexico City.

National broadcasting stations are divided into commercial
and cultural networks. All commercial stations are financed by
advertising (both public and private) but must provide 12 per-
cent of broadcasting time for government use. All cultural sta-
tions are operated by government agencies or by educational
institutions. Media analysts expect that the economic policies
pursued by the Salinas and Zedillo administrations will have a
major impact on the media by further reducing state interven-
tion and promoting the concentration of private ownership.

The Electoral Process and Political Dynamics

The Electoral Process

Article 41 of the constitution of 1917 and subsequent
amendments regulate electoral politics in Mexico. Suffrage is
universal for all citizens eighteen or older, and voting is com-
pulsory, although this provision is rarely enforced. The Mexi-
can constitution enshrines the principle of direct election by
popular vote of the president and most other elected officials.
Executive officeholders may not be reelected, and legislators
may not serve consecutive terms. Ordinary elections are held
every six years for president and members of the Senate, and
every three years for deputies. Since 1986 midterm elections
have renewed one-half of the Senate, in addition to the entire
Chamber of Deputies. Gubernatorial elections are evenly dis-
tributed throughout a sexenio, so that ordinarily no more than
six governorships are contested in any given year.

Although holding multicandidate elections in which the
electorate makes the final choice is one of the basic principles
of the Mexican Revolution, the electoral process in Mexico has
historically fallen short of this liberal ideal. During the sixty-
year period of single-party hegemony that followed the consoli-
dation of the revolutionary regime, regular elections became
an important symbol of stability and of the regime’s self-
ascribed democratic character. Beyond fulfilling an ambiguous
plebiscitary function, however, elections were not intended as a
means of selecting new leaders, nor were they usually relevant
to the public policy process. Instead, leadership turnover was
centrally controlled by the president, while most significant
interaction between public officials and the citizenry took


Mexico: A Country Study

place within the context of day-to-day corporatist bargaining
and informal clientelist relationships.

As the beneficiary of a noncompetitive electoral process, the
official party has historically enjoyed a near monopoly of all lev-
els of public office. For almost six decades, the principal politi-
cal battles in Mexico were fought among elite factions and
interest groups within the PRI party structure, with little or no
meaningful participation by independent organizations or
opposition parties. During this prolonged period of one-party
hegemony, several modest electoral reforms were implemented
by the government in order to maintain the appearance of
electoral democracy and undercut the appeal of latent opposi-
tion movements. Electoral reforms enacted during the 1970s
included the allotment of a minimum number of congressional
seats to both legitimate and “satellite” opposition parties. Addi-
tional steps toward greater political pluralism were taken dur-
ing the early 1980s, when President de la Madrid embarked on
a campaign to make local-level politics more competitive.

By the mid-1980s, the electoral arena had been liberalized
and the political space for opposition had expanded to such an
extent that the PRI found itself increasingly challenged at the
ballot box. In 1985 the landslide victories of PRI candidates in
gubernatorial and municipal elections in the northern state of
Chihuahua led to widespread allegations of electoral fraud by
the opposition PAN, which had expected major wins in one of
its traditional strongholds. In an unprecedented series of pub-
lic protests, a variety of civic groups, with support from the
Roman Catholic Church, staged massive demonstrations
denouncing the official tallies.

Responding to increasing popular pressure for democratiza-
tion, the de la Madrid administration in 1986 introduced an
electoral reform package that expanded opportunities for an
opposition presence in the congress. The 1986 Electoral
Reform Law enlarged the Chamber of Deputies from 400 to
500 seats and doubled the number of congressional seats filled
by proportional representation to 200. Of the 500 deputyships,
one each is allocated to 300 electoral districts, elected by sim-
ple plurality in single-member districts comparable to those in
the United States. The remaining 200 seats are assigned by pro-
portional representation based on a party’s share of the
national vote tally. The proportional seats give opposition par-
ties an opportunity to be represented in the congress even if
they lose all of the district races. The PRI assured, however, that


Government and Politics

the distribution of proportional seats would not become a
means for a coalition of parties without a plurality of the over-
all vote to take control of the lower house. A clause in the elec-
toral law provides that enough proportional seats in the
Chamber of Deputies be assigned to the party winning an over-
all plurality in the election to give that party a majority in the
Chamber of Deputies.

Theoretically, no party is barred from holding a single-mem-
ber district seat, although in practice an overwhelming number
of such seats have been held by the PRI. The increase in the
number of proportional seats was a concession to the opposi-
tion, which relies heavily on proportional seating for its repre-
sentation in the congress. The 1986 reform also introduced
proportional representation in state legislatures as well as gov-
ernment funding for all registered political parties.

The 1988 Elections

The 1988 elections were a watershed in the history of Mexi-
can politics, marking a radical shift in the country’s political
dynamics and providing the first test of the 1986 electoral
reforms. The emergence of two nationally prominent opposi-
tion candidates afforded an unprecedented challenge to the
PRI’s electoral machine, which until that time had faced mostly
obscure and poorly financed adversaries.

Assailed by a partisan rupture over the nomination of Sali-
nas, which ultimately led to the defection of much of the PRI’s
populist wing to the leftist opposition, the PRI party apparatus
was under intense pressure to produce a victory or face disinte-
gration. Within the context of a national economic crisis, an
intraparty split, and a hotly contested presidential race, many
observers expected the PRI to resort to fraud to secure a deci-
sive win.

Although the PRI maintained control of the presidency and
preserved its congressional majority in the July 1988 balloting,
the elections were a blow to the PRI’s preeminent position in
Mexican politics. The PRI suffered a dramatic erosion of 18
percent in its share of the presidential vote from the previous
election and surrendered an unprecedented 48 percent of
seats in the Chamber of Deputies to the opposition. The offi-
cial tally, which showed Salinas winning a bare majority of 50.7
percent of the vote, was questioned by an unexpected week-
long delay in the computerized tally and widespread reports of
vote fraud and irregularities. As a result, the new administra-


Mexico: A Country Study

tion began its term in office as one of the most unpopular in
recent Mexican history.

The Salinas Presidency: Reform and Retrenchment

Upon assuming office in December 1988, Salinas faced
grave challenges to his authority as president. Among his most
pressing concerns was the need to defuse political tensions that
had arisen in the highly polarized climate of the election. The
defection of many former PRI stalwarts and the threat of fur-
ther erosion of the party ranks also placed enormous pressure
on Salinas to relax the economic austerity measures put in
place by his predecessor. Compounding the new government’s
problems was the fact that, for the first time in its history, the
PRI did not command the two-thirds majority in the Chamber
of Deputies required to amend the constitution. To continue
liberalizing the economy, the government would need to nego-
tiate with the 101 delegates of the “moderate” opposition (the
center-right PAN) to remove the remaining constitutional bar-
riers to reform.

Perhaps the most formidable political challenge faced by the
new Salinas administration was mistrust of the official party’s
leadership and its lack of credibility among a likely majority of
the electorate in light of the questionable results of the 1988
presidential vote. In the aftermath of the narrow PRI presiden-
tial victory and facing widespread charges of electoral fraud,
President Salinas sought limited reforms of the electoral pro-
cess without disavowing the PRI’s many legal and financial
advantages in the political system.

Seeking to restore the government’s credibility and to pacify
the opposition, Salinas increased the opportunities for opposi-
tion politicians to take office at the state and local levels. This
strategy benefited mainly the PAN, whose free-market eco-
nomic policies closely resembled those of the modernizing tec-
nicowing of the PRI. Whereas previous PRI administrations had
been willing to concede some municipalities to the PAN, the
growth of opposition strength after the 1988 ele „tions com-
pelled the PRI to begin surrendering state goverr ments as well.

The first test of Salinas’s commitment to cl^ .ner gubernato-
rial elections came in 1989, when the PRI conceded its first gov-
ernorship to an opposition party by accepting a PAN victory in
Baja California Norte. In 1991 PRI victories in the gubernato-
rial elections in Guanajuato and San Luis Potosi sparked wide-
spread allegations of fraud. In both cases, the president


Carlos Salinas de Gortari,
president, 1988-94
Courtesy Embassy of Mexico,

intervened by forcing the local PRI candidate to step down.
Whereas in San Luis Potosi another PRI leader was installed as
interim governor, in Guanajuato the interim governorship was
handed to the PAN candidate.

The 1992 gubernatorial elections in Chihuahua and Micho-
acan illustrated the Salinas administration’s ambivalent
approach toward the opposition in general. Although the PAN
candidate won and was allowed to take office in Chihuahua,
the PRI spent vast amounts of party and government funds to
defeat the PRD in its regional stronghold of Michoacan. Fol-
lowing months of strident PRD protests over the official results,
Salinas faced the prospect of a massive protest march on
Mexico City. The president was finally compelled to intervene
and replace the sitting governor with a more suitable PRI sub-

Although President Salinas’s rejection of overt electoral
fraud was by no means novel or systematic, his admonitions
concerning fraud in state and local elections did help curb
some of the more conspicuous abuses. In addition, the presi-
dent’s moves against individuals associated with corruption
served as a powerful weapon in his reformist struggles against
the most recalcitrant factions of the PRI old guard. Many mem-
bers of the PRI’s politico wing opposed the president’s economic


Mexico: A Country Study

policies and resented central government interference in state
and local politics.

Contradicting his moves on behalf of more transparent and
competitive elections.. Salinas took some measures that made it
more difficult for the opposition to contest the PRI’s public
policy initiatives. In the name of preserving “governability,”
Salinas resorted frequently to his executive prerogatives in
pushing legislation through the Congress with a minimum of
public debate. Although the 1990 electoral reform created
institutions and a legal framework to fight electoral fraud and
abuses, it also contained a new formula for legislative seating
that made it more difficult for the opposition to gain seats in
the Chamber of Deputies. Under the 1990 electoral code, the
threshold for obtaining an automatic majority of seats in the
chamber was reduced to 35 percent of the national vote. This
threshold practically ensured that any future PRI administra-
tion could count on a PRI-controlled Chamber of Deputies to
pass its legislative initiatives. This highly unpopular electoral
law was rescinded in 1994 during the reforms leading to the
August elections.

One of the key features of the 1990 electoral code was the
abolition of the discredited Federal Electoral Commission and
its replacement with a new Federal Electoral Institute (Instituto
Federal Electoral — IFE). The IFE is a semiautononomous
organization,, consisting of representatives from government
and the major political parties. It supervises elections and
investigates complaints of irregularities. The IFE also adminis-
ters the entire electoral process at the federal, state, and local
levels. During the earlv 1990s, reforms of the IFE strengthened
its capacity to serve as a nonpartisan electoral commission.
These reforms included the introduction of majority nonparti-
san representation (six out of eleven seats) in the IFE govern-
ing: board, a le°;al framework for Mexican and foreign
observers to monitor the elections, and an independent audit
of the national voter list. Other electoral rules implemented
during the Salinas sexenio included the compilation of a new
and more accurate national electoral roll, and the issue of new
voter registration cards bearing voter photographs and finger-

The Salinas government reform program was twofold. It
focused on economic growth and the replacement of wide-
ranging subsidies to the middle class by a welfare program tar-
geted at the poorest sectors of Mexican society. In a coordi-


Government and Politics

nated effort to stimulate economic growth and restructure the
economy, Salinas promoted the privatization of state firms that
brought more than US$10 billion to the Mexican government.
The administration also launched an active campaign to
increase foreign investment in Mexico. A second approach
involved the massive National Solidarity Program (Programa
Nacional de Solidaridad — Pronasol), which was to help the
poor and attract political support (see Social Spending, ch. 2).
Pronasol distributed several billion dollars, derived from priva-
tization funds, aimed at delivering public works projects to
poor areas within the country. Heavy government spending on
social projects (schools, health clinics, and roads, among oth-
ers) contributed to PRI victories in the 1991 midterm elections.

Two important events in 1994 led to dramatic political
reforms. First came the Chiapas rebellion on New Year’s Day, in
which an army of some 2,000 peasants led by the masked Sub-
commander Marcos demanded social justice and democratiza-
tion of the Mexican political system (see President Salinas, ch.
1). Two months later, PRI presidential candidate Colosio was
assassinated while campaigning in Tijuana.

Despite the rhetoric calling for political reform and democ-
ratization, President Salinas actually strengthened the tradi-
tional pattern of centralized authority in the decision-making
process. A clear example of the continuation of the dedazo was
the tight control and secrecy around the unveiling of the sec-
ond PRI presidential candidate, Zedillo, soon after Colosio’s
assassination. Critics charged that much of the effort to curb
voting fraud stemmed not from a change in institutions but
from the personal intervention of President Salinas. Electoral
reform was also inhibited by a lack of meaningful political par-
ticipation by women (who did not attain voting rights until
1954) and by ethnic minorities. Despite the glorification of
Mexico’s indigenous history in popular art and literature,
Mexico’s indigenous peoples have been largely marginalized in
national politics.

Foreign Relations

The principles of Mexican foreign policy are respect for
international law and the judicial equality of states, respect for
the sovereignty and independence of nations, nonintervention
in the domestic affairs of other countries, the peaceful resolu-
tion of conflicts, and the promotion of collective security
through participation in international organizations. Tradi-


Mexico: A Country Study

tionally, Mexico’s foreign policy has been considered leftist,
prorevolutionary, and nationalistic. Demonstrating indepen-
dence from United States foreign policy, Mexico supported the
Cuban government during the 1960s, the Sandinista (see Glos-
sary) revolution in Nicaragua during the late 1970s, and leftist
revolutionary groups in El Salvador during the 1980s.

Mexico has played a minor role in international affairs
through most of its history. Since the mid-nineteenth century,
Mexican foreign policy has focused primarily on the United
States, its northern neighbor, largest trading partner, and the
most powerful actor in hemispheric and world affairs. Mexico’s
role in international affairs was limited until the 1970s, mainly
because of the country’s need to concentrate on domestic
issues, particularly on internal stability and economic growth.

The discovery of vast petroleum reserves during the 1970s,
however, placed Mexico in the forefront of oil producers and
exporters. Mexico soon became the principal supplier of oil to
the United States after the 1973 energy crisis. The heavy inflow
of dollars contributed to changing Mexico’s perceptions of its
role in world affairs while increasing its potential of becoming
an important regional power. Mexico has maintained an inde-
pendent oil policy, however, refusing to join the Organization
of the Petroleum Exporting Countries (OPEC) during the
1970s, but participating in the Organization of Latin American
Petroleum Exporting Countries (OLAPEC) during the 1980s.

Beginning with the presidency of Luis Echeverria (1970-
76), Mexico developed and implemented a more independent
and assertive foreign policy. Following an activist policy inde-
pendent of the United States, the Echeverria government
asserted Mexico’s position as a leader in the developing world’s
affairs, particularly on discussions for establishing a new inter-
national economic order as part of the so-called “North-South
Dialogue.” The Echeverria administration boycotted the Gene-
ral Assembly meeting of the Organization of American States
(OAS) in 1973 to protest the military coup in Chile that
deposed the popularly elected government of Salvador Allende
Gossens and suspended diplomatic relations with Chile and
South Africa because of these governments’ human rights vio-
lations. The Mexican government frequently criticized United
States foreign policy for favoring military regimes throughout
the Third World. Most distinctively, Mexico adopted an aggres-
sive role as a leader within Latin America in concerted efforts


Ernesto Zedillo Ponce de Leon,
president, 1994-
Courtesy Embassy of Mexico,

to adopt a unified position in regional relations against the
United States.

During the late 1970s, Mexico broke diplomatic relations
with the Somoza regime in Nicaragua on the advent of the San-
dinista revolution and in 1980 joined Venezuela in the San Jose
Accords, providing favorable trade conditions for oil supply to
the depressed economies of Caribbean and Central American
countries. In 1983 Mexico was instrumental in the establish-
ment of the Contadora (see Glossary) Group, a diplomatic
effort by four regional governments (Colombia, Mexico, Pan-
ama, and Venezuela) to present a Latin American solution to
the crisis in Central America. The document developed by the
Contadora Group was instrumental in the final Central Ameri-
can Peace Plan (see The United States and the Crisis in
Mexico, ch. 1).

During the Salinas administration, the central theme of
Mexican foreign policy became free trade, especially NAFTA.
Mexico focused on bilateral discussions with countries within
the hemisphere in an effort to improve trade and investment
potential. By 1994 it had signed free-trade agreements with
Venezuela and Colombia (effective January 1, 1995) as well as
with Bolivia. Under President Salinas, Mexican nationalism was
redefined as “progressive nationalism,” or the pursuit of eco-


Mexico: A Country Study

nomic development while strengthening Mexico’s interna-
tional role. Salinas felt that national independence demanded
that Mexico effectively insert itself into the international mar-
ket. In the mid-1990s, President Ernesto Zedillo continued to
stress Mexico’s strategic position and market potential world-

Relations with the United States

Throughout its history, Mexico has had an ambivalent
love-hate relationship with its northern neighbor. Nationalist
rhetoric continuously highlights the loss of one-half of
Mexico’s territory and natural resources to the United States in
the 1800s. Even at times when United States-Mexican relations
have been at their best, this loss is still present in Mexican rhet-
oric. During the Rio Group summit in September 1994, for
example, President Salinas commented on the United
Nations-sponsored United States intervention in Haiti, “Having
suffered an external intervention by the United States, in
which we lost more than half of our territory, Mexico cannot
accept any proposal for intervention by any nation of the
region.” In economic terms, good relations with the United
States have long been critical for Mexico, given that its north-
ern neighbor is its principal trading partner, both for exports
and imports. For its part, the United States gives serious consid-
eration to its relations with Mexico because of Mexico’s strate-
gic location on the United States southern border as well as the
fact that Mexico has the largest oil deposits in Latin America.

Relations between the countries often have been character-
ized by conflict. Analysts attribute much of the antagonism to
the great disparities in wealth between the two countries; a his-
tory of intervention by the United States that makes Mexico
highly critical and suspicious of United States positions; cul-
tural differences and stereotypes of both nations; and the high
levels of interdependence on many socioeconomic and politi-
cal issues, both at the national level and in border areas.

In the past, Mexico defied the United States on a number of
crucial hemispheric issues. Mexico never broke relations with
the Cuban communist regime as did the rest of Latin America
in the early 1960s. During President Echeverna’s sexenio,
Mexico took a leading role in demands for a new international
economic order. During the 1970s, Mexico challenged the
United States position in Central America and led a concerted
regional effort that excluded the United States to bring a


Government and Politics

peaceful end to regional conflicts. During the 1980s, Mexico
was highly critical of United States policy in El Salvador and,
along with the French government, called for formal recogni-
tion of the Salvadoran guerrillas in the peace process.

The most important bilateral issues in the 1990s are drugs,
trade, and illegal immigration into the United States. Drug
trafficking is a pressing issue for both Mexico, as a producer
and point of entry of the drug trade from South America into
the United States drug market, and the United States, as a
major consumer. Mexico insists that the trafficking of drugs
would not exist without the enormous and growing market in
the United States, thus placing responsibility on its northern
neighbor. Nevertheless, the corruption and crime provoked by
the growing drug business in Mexico have led the Mexican gov-
ernment to take domestic antidrug measures. The Salinas gov-
ernment launched a massive military campaign to counter the
threat posed by the narcotics trade within the country. In 1989
Mexico signed a cooperation agreement with the United States
on fighting the illegal drug trade (see President Salinas, ch. 1).
Mexico’s position on drug trafficking consists of two major con-
tentions: Mexico will make a good-faith effort to eradicate the
production and trade of drugs, and it will not, under any cir-
cumstances, allow the consolidation of narcotics groups within
its territory. Currently, Mexico has a large portion of its army
involved in the government’s drug eradication program (see
Narcotics Trafficking, ch. 5).

Trade between the two nations remains an important issue.
A trade and environmental agreement signed in late 1989
paved the way for an expansion of bilateral trade and invest-
ment with the United States. In 1990 Mexico began negotia-
tions over NAFTA with the United States and Canada. The
main objective of NAFTA was to remove all trade barriers and
investment obstacles among the three countries over a
fifteen-year period. Negotiations concluded in 1992, and
NAFTA was approved in 1993. The agreement was activated on
January 1, 1994, creating the world’s richest and largest trading
bloc, consisting of 360 million consumers in a US$6.6 trillion
market (see Foreign Trade, ch. 3).

A third pressing issue between the two countries continues
to be illegal immigration of Mexicans into the United States. By
the mid-1990s, this issue occupied center stage in United
States-Mexican relations. Since the 1960s, the number of Mexi-
can illegal immigrants into the United States has soared to an


Mexico: A Country Study

average of 300,000 to 500,000 per year. These groups are con-
centrated in the southwestern states of the United States, espe-
cially California. Although NAFTA may help to decrease this
trend in the long run, the presence of a large number of illegal
residents in the United States — many of whom benefit from
local and federal programs — triggered a legislative proposal in
1995 in the state of California to deprive these groups of any
United States government support. In particular, legislation in
the state of California has revived anti-United States feelings
among Mexicans.

Relations with Cuba

Mexican policy toward Cuba has been the cornerstone of its
assertive independence from United States policies. Mexico’s
closeness with Cuba also set it apart from its Latin American
neighbors, especially in the 1960s when Mexico was the only
Latin American country that did not break diplomatic relations
with the Cuban government. Mexico also opposed any foreign
interference in Cuban affairs, including the United States-
backed Bay of Pigs invasion in 1961 and the expulsion of Cuba
from international organizations — for example, the suspension
of Cuba from the OAS in 1962. As part of asserting Mexican
independence from United States policy toward Cuba, the
Mexican president pays an official visit to Cuba during the last
year of his term. This practice was established by President
Echeverna in 1975 and continued by presidents Lopez Porullo
in 1980, de la Madrid in 1988, and Salinas in 1994. Mexico and
Cuba currently hold many formal agreements on economic,
educational, and cultural issues.

Relations with Guatemala

Mexico’s shared border with Guatemala has led to tensions
between the countries. Because of the disparity between the
two countries in economic levels and power, some critics draw
parallels to United States-Mexican relations. Traditionally, Gua-
temalans have crossed the border seasonally to work in the cof-
fee fields of southern Mexico. During the early 1980s, however,
a military campaign against indigenous Mayan peasants in
northern Guatemala forced an exodus of refugees, who
crossed the Mexican border to get away from the violent dis-
placement of their communities. From 1982 to 1993, more
than 40,000 Maya lived in refugee camps along the southern
border of Mexico, creating a problem for local authorities. The


Government and Politics

Mexican government, at both the national and local levels, was
unprepared and unwilling to support such mass immigration
into its territory. The emergence of the Zapatista guerrilla
movement and alleged drug trafficking in the region exacer-
bated the situation. The Mexican government was criticized for
its neglect and selectiveness regarding political asylum issues.
Repatriation agreements between the Guatemalan government
and organized refugee groups were reached during 1992, pro-
viding for the return of these groups to their country. Repatria-
tion has proceeded slowly since then.

Relations with Other Latin American Countries

Mexico is a founding and active member of various hemi-
spheric fora that support regional political and economic
cooperation within Latin America. Mexico is, for example, a
founding member of the OAS and the Inter-American Treaty
of Reciprocal Assistance (Rio Treaty). But although Mexico is
an active participant in many regional organizations, it main-
tains an independent view and often dissents from decisions
taken by the international forum. Its record within the OAS
consistently shows an independent Mexican policy: Mexico dis-
sented from the United States-sponsored 1954 Caracas Resolu-
tion, which was directed at the leftist government of Jacobo
Arbenz Guzman in Guatemala; it systematically opposed the
United States-led imposition by the OAS of economic sanctions
against Cuba during the 1960s; and it opposed United States
interventions in the Dominican Republic (1965), Grenada
(1983), Panama (1990), and Haiti (1994).

Through most of the 1980s, Mexico was among the leaders
of an intra-Latin American cooperation effort that excluded
the United States. As a member of the Contadora Group estab-
lished in 1983 with Colombia, Panama, and Venezuela, Mexico
advocated a negotiated settlement of the Central American
conflict and called for the withdrawal of foreign influence —
including that of the United States and the Soviet Union —
from the region. Mexico was also a founding member of the
Cartagena Group (1984), an informal Latin American forum
established to deal collectively with issues concerning foreign
debt. Along with Venezuela, Mexico established the San Jose
Accords, a cooperative effort to supply Central American
nations, Barbados, the Dominican Republic, and Jamaica with
oil on concessionary terms. Currently, Mexico is an active par-
ticipant in the Group of Eight (derived from the Contadora


Mexico: A Country Study

Group), which includes Argentina, Brazil, Colombia, Mexico,
Panama, Peru, Uruguay, and Venezuela; and in the Group of
Three, along with Colombia and Venezuela.

Membership in International Organizations

Mexico has always been a staunch supporter of international
cooperation through multilateral institutions. Mexico main-
tains diplomatic relations with 176 countries. Mexico also is a
founding member of the United Nations and participates as an
active member in more than seventy other international fora,
including the General Agreement on Tariffs and Trade (GATT;
now the World Trade Organization — WTO), the Organisation
for Economic Co-operation and Development (OECD), the
Asia Pacific Economic Cooperation (APEC) forum, NAFTA,
and the Rio Group. In addition, the Mexican government was
among the leading members of the Inter-American System that
drafted the Treaty of Tlatelolco, which prohibits Latin Ameri-
can countries from acquiring nuclear weapons.

Prospects for the Future

The presidential election of 1994 was unlike any election of
the twentieth century. With more than 80,000 Mexican observ-
ers and 1,000 foreign poll watchers stationed around the coun-
try, the 1994 presidential election was, by far, the most open
and honest in modern Mexican history A high voter turnout
(70 percent of the electorate) provided credibility to the elec-
tion process and confirmed the government’s commitment to,
and the legitimacy of, democratic practices in Mexico. In his
campaign, the new Mexican president, albeit representing the
traditional forces within the official party, promised to divert
powers from the executive branch to the other two branches of
government. He also promised to democratize the PRI’s presi-
dential selection process.

Although significant changes during the 1990s have contrib-
uted to the development of a more competitive and demo-
cratic Mexican political system, a strong executive branch, as
well as a close connection between the PRI and the govern-
ment, continues to prevail as the official party enters its seventh
decade in power. Most analysts agree that the period of PRI
hegemony is over. The outcome of this new pluralism, however,
is a matter for conjecture. Mexico today faces the challenge of
maintaining political and economic stability while pursuing a


Government and Politics

dramatic transition toward an open economy and a competi-
tive, pluralist political system.

* * *

The body of work on Mexican politics is extensive. Recent
books include Roderic A. Camp’s Politics in Mexico, Wayne A.
Cornelius and Ann L. Craig’s The Mexican Political System in
Transition, Dan A. Cothran’s Political Stability and Democracy in
Mexico, and Jaime E. Rodriguez’s The Evolution of the Mexican
Political System. Roger Hansen’s The Politics of Mexican Develop-
ment, although becoming dated, continues to provide the best
analysis of the PRI. The articles on Mexico in Latin America and
Caribbean Contemporary Record provide useful information on
political and economic events, as do the articles on Mexico in
the yearly special issue of Current History. Information on con-
temporary events is available in the Latin America Regional
Reports: Mexico and Central America Report and Latin America
Weekly Report, both published by Latin American Newsletters of
London, and in various issues of the Financial Times, the Los
Angeles Times, the New York Times, the Wall Street Journal, the
Washington Post, and the Mexican newspapers Excelsior, the
News, and Uno Mas Uno. (For further information and com-
plete citations, see Bibliography.)


Chapter 5. National Security

Mexican revolutionary soldiers adapted from a painting by David Alfaro

ful. Mexico has no foreign adversaries and little ambition to
impose itself upon other nations. It repudiates the use of force
to settle disputes and rejects interference by one nation in the
affairs of another. It sees no regional security problems justify-
ing military alliances.

The traditional Mexican definition of national security has
constrained the role played by the armed forces. The military is
essentially passive in matters of external defense. It has been
relegated to internal missions of guaranteeing domestic politi-
cal stability, contributing to the antinarcotics campaign, and
carrying out development-oriented civic-action programs in
fulfillment of its duties as the “servant of the people.” Since the
end of World War II, a succession of civilian presidents has
divested the military establishment of political power. The rul-
ing civilian elite that guides national security policy focuses on
maintaining social order and overcoming local uprisings.

Because of these limited national security goals, Mexico long
maintained a military establishment that was relatively small for
a regional power. The picture began to change in the late
1970s, however. The discovery and exploitation of new petro-
leum reserves gave Mexico added stature as a world energy sup-
plier. Violence in Central America brought tens of thousands
of refugees, mainly Guatemalans, to Mexico. This influx of ref-
ugees was part of a regional upheaval that Mexico feared might
spread northward to Mexican soil. Given the situation, the
nation’s armed forces, which until the 1970s were one of the
most poorly paid and ill-equipped in the Western Hemisphere,
took on new significance.

As a result, Mexico launched an ambitious military modern-
ization program with the goals of increasing the size of the
armed forces, improving education and training, and upgrad-
ing military equipment. The plan had to be scaled back
because of a serious international financial crisis and domestic
economic distress in the 1980s, but important changes were
realized. The number of armed services personnel doubled in
less than two decades, reaching 175,000 in 1996. In addition to
keeping independent regiments and battalions in garrisons
throughout the country, the army formed an armored brigade,
bringing its combat forces to six brigades. There was also an


Mexico: A Country Study

elite Presidential Guard brigade. The army also enlarged its
inventory of armored vehicles, although it still had no tanks.
The air force expanded by adding a jet fighter squadron, in
addition to less sophisticated planes, and armed helicopters
that have been used in counterinsurgency operations. The
navy acquired modern patrol vessels to provide increased pro-
tection of offshore oil installations and the country’s fishery

Violence in nearby Central American countries slackened in
the early 1990s. A 1994 peasant rebellion in the southernmost
state of Chiapas, however, demonstrated the potential for revo-
lutionary activity by people not sharing in the country’s eco-
nomic and social progress. Although the lightly armed
insurgents inflicted relatively few casualties, troop units were
heavily deployed in the area. The possibility that localized
uprisings could become more widespread underscores the
need for modern, well-trained armed forces to ensure the
country’s stability.

History and Traditions of the Armed Forces

Mexico’s military claims a rich heritage dating back to the
pre-Columbian era. As early as the beginning of the fifteenth
century, the Aztec army achieved a high degree of military
organization that included formal education and training,
weapons production, war planning, and the execution of coor-
dinated operations (see The Aztec, ch. 1). The importance of
military service was impressed upon each young male in the rit-
ual of declaring to him, shortly after birth, that his destiny was
to be a warrior and to die in combat, the most honorable death
in Aztec culture. The powers of the Triple Alliance, formed by
the urban centers of Tenochtitlan, Texcoco, and Tlacopan
(now known as Tacuba) — all three of which are in the area of
present-day Mexico City — reportedly could assemble a force of
between 16,000 and 18,000 combatants, roughly 10 percent of
the male population, on an hour’s notice. Evidence of this
indigenous influence on the modern military is found in the
profile of an eagle warrior, the name given Aztec society’s fight-
ing elite, on the insignia of the Superior War College (Escuela
Superior de Guerra).

At the beginning of the sixteenth century, the forces of the
Triple Alliance were at the peak of their military development.
Nevertheless, when the Spanish conquistadors under Hernan
Cortes arrived in 1519, the native warriors put up little resis-


National Security

tance. The two decisive factors in the Spanish victories were the
conquistadors’ possession of firearms and the mobility they
gained from horses, elements of battle hitherto unknown to
the Aztec. The cruelty of the Spanish induced the Aztec to
rebel in 1520, and Cortes was forced to abandon the Aztec cap-
ital of Tenochtitlan. After launching a new offensive, the Span-
ish regained control, destroying the magnificent city (see The
Spanish Conquest, ch. 1). An alliance with indigenous peoples
opposed to the Aztec; the belief of Aztec ruler Moctezuma II
(Montezuma) that Cortes was a Toltec god, Quetzalcoatl,
whose return was predicted by legend; and the rapid spread of
smallpox, which had been carried by the Spanish, also contrib-
uted to the Spanish victory Despite the Aztec’s continued bat-
tles and subterfuge, the Spanish succeeded in superimposing
their own theocratic-militaristic traditions on the conquered

The Spanish organized the new colony as the Viceroyalty of
New Spain and established an army there in the latter part of
the eighteenth century. By 1800 the army’s main components
were four infantry regiments and two dragoon regiments
rotated periodically from Spain. These were supported by ten
militia regiments of infantry and nine regiments of dragoons
recruited locally. In all, the army numbered about 30,000 mem-

After independence, the Mexican armed forces gradually
eliminated many practices of the Spanish colonial army. The
practice of granting military officers special rights or privileges
(Jueros) that enabled them to “make sport of justice, avoid pay-
ment of their debts, establish gambling houses, and lead a dis-
solute life under the protection of their epaulets” was
abolished in 1855. The military also phased out the nine-
teenth-century practice of forced conscription, which often
filled the ranks with criminals or other social undesirables
whom local caudillos (strongmen) wished to be rid of. These
practices led to a sharp division between the officer corps and
the enlisted ranks, a division that has slowly abated in the twen-
tieth century in response to the egalitarian influence and
myths of the Mexican Revolution (1910-20). Two legacies still
remain from the years of colonial rule, however: the use of
Spanish military ranks, some of which have no direct equiva-
lent in the United States armed forces, and the high prestige
traditionally accorded to cavalry units.


Mexico: A Country Study

The Wars of Independence, 1810-21

According to one historical account, the struggle for inde-
pendence involved four phases of military operations. In the
first phase, Father Miguel Hidalgo y Costilla, a parish priest,
formed the precursor of the first independent Mexican mili-
tary force when he issued the now-famous Grito de Dolores on
September 16, 1810, calling for an end to Spanish rule (see
Wars of Independence, 1810-21, ch. 1). Hidalgo led a poorly
armed force of native and mestizo peasants in disorganized
attacks on Spanish-controlled towns and villages throughout
central Mexico. The second phase began after Hidalgo’s cap-
ture and execution in 1811, when Father Jose Mana Morelos y
Pavon assumed leadership of the independence movement.
Morelos led guerrilla-style operations at the head of a small
army equipped with weapons captured from the Spanish. He
was able to establish an independent republic from central
Mexico to the Pacific coast and to encircle Mexico City by early
1813. The third phase, following Morelos’s capture and execu-
tion in 1815, consisted of attacks by uncoordinated rebel bands
led by guerrilla chieftains — among them Guadalupe (Manuel
Felix Fernandez) Victoria and Vicente Guerrero, both of
whom later became presidents. Their operations further
undermined Spanish control.

The final phase of the independence struggle began in
1821, when a loyalist officer, Augustin de Iturbide, revolted
against his superiors and formed a tenuous military alliance
with Guerrero. The temporary establishment of a liberal mon-
archy in Spain had provoked many Mexican conservatives like
Iturbide to switch their sympathies to the revolutionaries. Itur-
bide’s Army of the Three Guarantees, composed of approxi-
mately 16,000 men, quickly succeeded in routing those of the
regular Spanish forces who resisted (see Iturbide and the Plan
of Iguala, ch. 1). Full independence in 1821 was followed by
the 1822 coronation of Iturbide as the “constitutional
emperor” of Mexico. The revolutionary force became the first
standing Mexican military body. Known as the Mexican Impe-
rial Army, it was almost an exact copy of the Spanish colonial
militia. Its officers were of direct Spanish descent, but the rank
and file were mainly peasants recruited by raids on villages in
the mountains and brought down in chains to the cities. The
desertion rate was high among these “recruits,” who remained
ill-trained and poorly equipped for military action.


National Security

For the first thirty years following independence, military
officers dominated the country’s chaotic political life (see
Empire and the Early Republic, 1821-55, ch. 1). Repeatedly,
groups of generals led by a caudillo issued “pronouncements”
(pronunciamientos) denouncing the government and promising
reform and rewards for those who would join their revolt. One
of the most vilified and cunning of the military caudillos was
General Antonio Lopez de Santa Anna Perez de Lebron, who
led the first revolt against Iturbide and, between 1833 and
1855, served as president on eleven different occasions.

War with the United States, 1846

In spite of his military talents, Santa Anna is most remem-
bered for his defeats that led to the cession of roughly one-half
of Mexican territory to the United States under the 1848 peace
settlement (see Centralism and the Caudillo State, 1836-55,
ch. 1). After Texas declared its independence in 1836, Texan
forces initially suffered a series of military reverses that culmi-
nated in the disaster at the Alamo in San Antonio. But later,
bolstered by volunteer fighters from throughout the United
States, they soundly defeated the Mexicans and captured Santa
Anna at the Battle of San Jacinto. After nine years of indepen-
dence (unrecognized by Mexico), Texas was admitted to the
United States in 1845. The next year, the administration of
President James K. Polk, eager to fulfill the United States claim
to “manifest destiny,” found a pretext to declare war on
Mexico. After occupying Santa Fe without a struggle, United
States forces under General Stephen Kearney advanced west to
present-day California, while forces under Alexander Doniplan
occupied Chihuahua. Another United States force under
General Zachary Taylor defeated Santa Anna’s army at the Bat-
tle of Buena Vista near Monterrey. The decisive battles, how-
ever, were waged by General Winfield Scott’s 15,000-man Army
of Occupation after it opened another front by landing at Ver-
acruz. Scott’s army continued toward the Mexican capital, win-
ning a series of engagements with Santa Anna, who had
assumed the Mexican presidency. United States forces took
Mexico City after a three-week siege that culminated in the
decisive Battle of Chapultepec. By Mexican accounts, some
1,100 Mexican troops and cadets fought in hand-to-hand com-
bat against 7,000 United States soldiers at Chapultepec Castle,
the site of the Heroic Military College on the western outskirts
of the city. The legend of the Boy Heroes (Nihos Heroes) was


Mexico: A Country Study

born when young cadets, among the last defenders of
Chapultepec, reputedly threw themselves over the ramparts to
their deaths rather than surrender to Scott’s troops.

The internal disorder that followed Mexico’s defeat
depleted the country’s treasury and destroyed much of its com-
merce and agriculture. Mounting unpaid foreign debts created
a pretext for Britain, France, and Spain to land troops at Vera-
cruz in 1861. Dreaming of expanding his influence to the New
World, the French ruler, Napoleon III, sent an expeditionary
force inland to capture Mexico City in early 1862. Although ini-
tially defeated at the bloody Battle of Puebla on May 5, 1862,
the French, aided by Mexican conservative troops, eventually
succeeded in installing the Habsburg archduke Ferdinand
Maximilian Joseph as the second emperor of Mexico (see Civil
War and the French Intervention, 1855-67, ch. 1). By late
1862, the legitimate government of Benito Juarez was left with
control of only a small enclave along the border with Texas.

General Jose de la Cruz Porfirio Diaz had played a decisive
role in the early victory of Juarez’s forces at Puebla and com-
manded troops in the republican stronghold of Oaxaca until it
was captured by the French in 1865. After escaping from a
French military prison, Diaz commanded republican troops in
the final campaigns leading to the surrender of Maximilian’s
remaining forces at Queretaro in 1867. After Juarez was
returned to the presidency, Diaz managed to slowly parlay his
military prowess into political strength.

Diaz’s allegiance to Juarez ended soon after the restoration
of the republic when the newly reinstalled president dis-
charged two-thirds of the 60,000- to 90,000-member army. Dur-
ing the next several years, Diaz championed the cause of the
dismissed troops and unsuccessfully challenged Juarez in the
1867 and 1871 presidential elections. The presidential succes-
sion after Juarez’s death finally provoked Diaz to move against
the government by issuing the 1876 Plan of Tuxtepec. Using
recruits and funds gathered in the United States, Diaz defeated
the government troops and, in November of that year, assumed
the presidency, a position he would hold for all but four of the
next thirty-four years (see The Restoration, 1867-76, ch. 1).

Established as the national caudillo, Diaz based his power on
military might as he ruthlessly eliminated those who chal-
lenged his authority. When the United States and Mexico came
close to war in 1877 over raids into United States territory by
Mexican bandits and cattle rustlers, Diaz halted the brigandage


National Security

and averted war by sending in federal army troops and the
rurales, the feared paramilitary corps composed largely of crim-
inals that also served as a counterweight to the regular mili-
tary’s power. Diaz resumed the practice of forced conscription
and used his troops to brutally suppress antigovernment riots
in Mexico City. Although state governorships were regularly
offered to loyal officers, Diaz rotated the command of the
army’s military zones as a means of preventing generals from
acquiring a local power base.

The Military Phase of the Revolution, 1910-17

Opposition to Diaz grew during the later years of Diaz’s rule,
and liberal reformers rose against Diaz in 1910, following yet
another fraudulent reelection. Using the United States as a
base of operations, the liberal democratic opposition forces
laid siege to the federal garrison at Ciudad Juarez. Diaz’s liberal
presidential opponent, Francisco I. Madero, issued a manifesto
in San Antonio, Texas, declaring himself provisional president
and creating the Army of Liberation, which later became the
Constitutionalist Army (see The Revolution, 1910-20, ch. 1).

Regional caudillos, some of whom were little more than ban-
dits, soon joined the movement. Rebels led by Pascual Orozco
and Francisco (Pancho) Villa, armed with Winchester rifles
smuggled from the United States, quickly gained the advantage
over federal troops, who depended on long supply lines from
the capital. As rebel successes mounted, government troops
began deserting. Under pressure, Diaz resigned in 1911 and
fled to exile in France.

The Madero government, which succeeded Diaz, was forced
to deal with uprisings throughout the country. Rebel military
leaders (most notably Orozco) were dissatisfied with the
rewards that the new Madero government offered them for
defeating the dictatorship. A coup ousted Madero in 1913 and
set the Mexican Revolution on a bloody course that would last
for the next four years.

Various rival factions struggled for supremacy in confused
fighting. The principal leaders were Villa, Orozco, Emiliano
Zapata, Venusuano Carranza, and Alvaro Obregon. Villa delib-
erately provoked United States intervention by launching
cross-border raids. A 7,000-man expeditionary force under
United States General John J. “Blackjack” Pershing was dis-
patched in 1916 but failed to capture Villa. In spite of the cha-
otic conditions, the military phase of the Mexican Revolution


Mexico: A Country Study

provided the Mexican armed forces with a unifying ideology.
This new ideology stressed the military’s peasant origins and
established the military as the defender of the popular will.
Drawing on this heritage, the modern Mexican military identi-
fies itself as the “silent and anonymous guardian” that has pro-
vided the security essential to the subsequent development of
the nation.

Professionalization of the Armed Forces, 1920-46

The first serious efforts at depoliticizing and professionaliz-
ing the military began in 1920 under the government of
Obregon, himself a general who had been elected president
with the support of the old revolutionary chiefs. Obregon saw
the need to consolidate his political position by diminishing
the power and influence of the regional caudillos. Military
uprisings in 1923, 1927, and 1929 resulted in purges of large
numbers of rebellious generals. The army was reduced by two-
thirds, to 14,000 officers and 70,000 troops in 1921. The demo-
bilization principally dismantled the excessive number of cav-
alry regiments. Pay and living conditions of the enlisted ranks
were improved, and the military’s share of the national budget
was slashed from 61 percent in 1921 to 25 percent by 1926.
Many officers and men were weeded out by new laws on com-
petitive promotion and mandatory retirement ages. Neverthe-
less, unqualified revolutionary-era generals continued to be
carried on the rolls. The Organic Law of 1926 provided the
legal base for the army, defined its missions, and established
regulations and formal procedures.

General Plutarco Elfas Calles (president, 1924—28) contin-
ued Obregon’s efforts to reduce the political influence of the
military and ensure the army’s loyalty to the central govern-
ment. Calles’s policies were carried out by General Joaquin
Amaro, the secretary of war and navy. Amaro promoted educa-
tion of officers and enlisted men in the belief that it would
increase loyalty and obedience to civilian authorities. Officers
were sent for professional training in the United States and
Western Europe. The curriculum of the Heroic Military Col-
lege, founded in 1823, was reformed, and the Superior War
College, a command and general staff college for promising
officers, was created. Schools providing specialized training in
the various service branches also were established (see Educa-
tion and Training, this ch.).


National Security

General Lazaro Cardenas, who assumed the presidency in
1934, divided the Secretariat of War and the Navy into two
autonomous defense ministries, the Secretariat of National
Defense (Secretaria de Defensa Nacional), which controlled
the army and air force, and the Secretariat of the Navy (Secre-
taria de Marina Armada). As the possibility of Mexican involve-
ment in World War II increased, Cardenas drafted the Law of
National Military Service, which established, through a lottery
system, compulsory basic military training for eighteen-year-
old males.

The Mexican Military in World War II

General Manuel Avila Camacho, who came to office in 1940
and was the last general elected president of Mexico, contin-
ued Cardenas’s and Obregon’s efforts to institutionalize the
army and remove the military from politics. In February 1942,
soon after the Japanese attack on United States forces at Pearl
Harbor, the Joint Mexican-United States Commission on Conti-
nental Defense was established. The commission coordinated
planning for the defense of Mexico and the adjacent south-
western United States. The sinking of two Mexican tankers in
the Gulf of Mexico by German submarines provoked Avila
Camacho to declare war on the Axis powers in May 1942. In
response to the Mexican government’s expressed desire to
fight the Japanese, a Mexican air squadron was readied for duty
in the Pacific theater. After a year’s training in the United
States, Squadron 201 of the Mexican Expeditionary Air Force
arrived in the Philippines in April 1945. Flying P-47 Thunder-
bolt fighters, the Mexican pilots participated in bombing and
strafing runs to support ground forces and in long-range
reconnaissance missions over Taiwan. Of thirty-two pilots in the
expeditionary squadron, seven were killed.

The immediate postwar years were a peak period of United
States influence on the Mexican armed forces. The Mexican
military reorganized, using the United States armed forces as a
model. The military training program incorporated United
States army field manuals. United States arms transferred to
Mexico just after World War II were the country’s last major
acquisitions of military hardware for a period of three decades,
however. In the mid-1970s, the government accepted the need
for a larger, modernized army because of growing concerns
over potential threats to its oil resources.


Mexico: A Country Study

The Military in Civilian Politics

Despite the military’s prominent role in the history of the
country, the Mexican armed forces have steadily retreated
from direct involvement in political matters since the 1940s.
The typical Mexican officer is deliberately removed from politi-
cal issues, and there has been a decline in military representa-
tion in government offices outside the armed services. Since
World War II, the number of persons with military back-
grounds serving in the cabinet, subcabinet, state governor-
ships, and in the bureaucracy has steadily declined.

Mexican political observer Adolfo Aguilar Zinser believes
there is little reason to expect the officer corps to change its
deeply rooted loyalty to civil authority. Serious domestic tur-
moil might cause a conservative middle class and business
interests to pressure the army to intervene in the government.
As long as the military remains assured of the civilian leader-
ship’s ability to deal with any crisis threatening the established
system, however, the military is unlikely to be drawn into politi-
cal affairs.

National Security Concerns

Under the constitution of 1917, the armed forces have
responsibility for defending the sovereignty and independence
of the nation, maintaining the constitution and its laws, and
preserving internal order. At various times during the first cen-
tury of independence, Mexico was subjected to foreign attacks
by the United States, France, and, for a brief period, Spain and
Britain. Mexico’s principal national security concerns since
1910 have been to preserve domestic political stability and to
prevent foreign economic domination. The last time Mexico
faced a foreign threat was when it joined the war against the
Axis in World War II. During World War II and in the subse-
quent years of the Cold War, however, Mexico’s proximity to
the United States allowed it to fall under the protective shield
of its northern neighbor.

Bilateral relations with the United States have been strongly
affected by the bitter legacy left by Mexico’s loss of more than
one-half of its territory in 1848 and subsequent incidents of
United States infringement of its sovereignty. General Winfield
Scott’s 1847 siege of the capital, the United States marines’
1-914 occupation of Veracruz, and General Pershing’s 1916
punitive expedition in northern Mexico against Pancho Villa


National Security

were traumatic episodes in Mexican history. Even in the post-
World War II era, most Mexicans viewed United States domina-
tion, not Soviet-Cuban designs in the Western Hemisphere or
revolutionary regimes in Central America, as the major foreign
threat to national sovereignty. Although fears of armed inter-
vention by the United States have receded, concerns over
United States economic and political penetration persist.

The Mexican military is primarily organized to meet chal-
lenges to internal order and the existing polidcal system. Since
the 1940s, Mexico has remained remarkably free from domes-
tic upheaval, perhaps more so than any other Latin American
nation. For the most part, the military has been reluctant to
become involved in law enforcement. The armed forces have
given the responsibility of preventing violence to federal and
state police authorities except when faced with a large-scale
breakdown of civil order. Troops are not fully equipped or
trained to deal directly with protesters, and, with its reputation
at risk, the military leadership seems inclined to register its
influence more as a presence than an active force.

In 1968 the military was called upon to put down massive
student-led protests associated with strongly felt economic
grievances. Fearful of losing control of the situation, the army
violently suppressed the movement by opening fire on thou-
sands of demonstrators at Tlatelolco, in northern Mexico City.
The brutality of the action, in which hundreds of demonstra-
tors were killed or wounded, was severely criticized and had a
lasting effect on the public’s perception of the military.

The January 1994 uprising in the state of Chiapas by a previ-
ously unknown guerrilla group, the Zapatista National Libera-
tion Army (Ejercito Zapatista de Liberacion Nacional — EZLN),
has been the only outbreak in recent years that has necessitated
major troop deployments (see Public Order and Internal Secu-
rity, this ch.). Both army and air force units were shifted to the
scene to drive the insurgents out of towns they occupied. After
widespread skirmishes in which several hundred persons were
reportedly killed, the army was able to regain control of most
towns in the area within a matter of hours, forcing the guerril-
las to retreat into remote mountain strongholds. Except for a
brief army offensive in February 1995, several consecutive
cease-fires prevented any further fighting after the initial
actions of 1994. By early 1996, the military situadon in Chiapas
was stalemated: the army occupied the towns, and the rebels
were largely confined to the thinly populated highlands.


Mexico: A Country Study

In dealing with potential regional hostilities, the Mexican
military has adopted a reserved posture that reflects the coun-
try’s foreign policy traditions. Neither Cuban-style communism
nor the possibility of conflict spreading northward from Cen-
tral America has been regarded as directly threatening to
Mexico. No effort has been made to erect defenses along the
3,200-kilometer land border Mexico shares with the United
States. Mexico’s 970-kilometer border with Guatemala also
remains unguarded despite occasional clashes between Mexi-
can and Guatemalan forces. When Guatemalan army units car-
ried out raids in the early 1980s against Guatemalan refugees
and Mexican communities that were aiding them, the Mexican
military reacted mildly to avoid confrontation. Mexican coastal
areas and its 320-kilometer Exclusive Economic Zone (EEZ)
are lightly patrolled by Mexican fleet units. The security of
Mexico’s coasts is effectively guaranteed since they are within
the orbit of United States hemispheric defense.

Tasks and Missions

In the half-century following World War II, the Mexican
armed forces have never been called upon to exercise an exter-
nal defense role. Their primary mission has been to deter and
prevent violence threatening public order, including outbreaks
arising from strikes and protests, rural political grievances,
guerrilla insurgency, and urban terrorism. Since the 1920s, the
military has devoted a considerable share of its resources to
civic-action programs to improve socioeconomic conditions
and relieve human distress, particularly in rural areas that
otherwise have little contact with government representatives
(see Civic Action, this ch.). The army has often been called
upon to respond to natural disasters, its responsibilities set
forth in a plan known as National Defense III (Defensa Nacio-
nal III — DN III) , and to coordinate the work of other agencies
during the course of the emergency. The army took charge of
relief operations after the volcanic eruption in Chiapas in
1982. When parts of the capital were devastated by the power-
ful earthquake of 1985, however, the army played a lesser role
because the civil authorities did not wish to appear incapable
of dealing with the crisis without military help.

The army assigns large numbers of personnel to the antinar-
cotics campaign, carrying out crop eradication as well as sup-
porting law enforcement agencies in interdiction missions. The
navy is responsible for maritime drug interdiction, and the


National Security

ground-based radar system of the air force supports air inter-
diction efforts (see Narcotics Trafficking, this ch.).

Under the Mexican code for federal elections, the army has
a limited but important part in the administration of elections,
monitoring polling stations and protecting ballot boxes on
election day. Although the military has generally remained
impartial in carrying out its election duties, it faced accusations
in 1985 and 1986 that it assisted in manipulating ballot counts
in the northern states to ensure victories by the government
party, the Institutional Revolutionary Party (Partido Revolucio-
nario Insdtucional — PRI).

As part of its domestic security functions, the army is also
responsible for protecting strategic economic installations such
as electric power plants, oil fields, petroleum complexes, ports,
and airports. All regions where the country’s petroleum
reserves are located are regarded as of high strategic signifi-
cance. Petroleum fields are found primarily in the southeast-
ern states of Veracruz and Tabasco and offshore in the Gulf of
Mexico. The threat of spreading conflict in Central America
and the strategic importance attached to Mexico’s oil fields
were the decisive factors in the government’s decision to assign
additional military personnel to the southernmost areas in the
mid-1980s and to relocate Guatemalans living in refugee camps
there so as to remove any pretext for Guatemalan border incur-

Along with protection of Mexico’s fisheries and detection of
vessels transporting contraband, the Mexican navy is charged
with the defense of offshore oil installations and other mari-
time resources. The campaign against drug smuggling has
placed an increasing burden on the navy’s resources. These
heightened priorities led the government to dedicate a signifi-
cantly greater portion of its budget to the Secretariat of the
Navy during the 1980s. Between 1980 and 1984, the United
States and Mexico were at odds over the Mexican navy’s appre-
hending of United States fishing vessels — mainly tuna boats —
within Mexico’s EEZ. In 1993 three smuggling ships carrying
several hundred illegal Chinese immigrants were forced to
land in Mexico after the ships had been detected off the Cali-
fornia coast, adding another dimension to the navy’s mission.

United States Concerns

Mexico has enjoyed peaceful relations with its northern
neighbor for many decades. In the United States, national


Mexico: A Country Study

security issues involving Mexico gained increased attention
during the 1980s because of the growing importance of
Mexico’s oil reserves and installations and because of the fear
that leftist-inspired turbulence in Central America might
spread northward. Mexico’s economic difficulties and societal
frictions intensified fears that the long period of stable border
conditions might be ending. By the early 1990s, however,
unrest had abated in Central America. Radical movements
were no longer threatening the government of El Salvador, and
the leftist Sandinista (see Glossary) government was out of
power in Nicaragua. In Guatemala, the civilian government
had largely overcome the left-wing insurgency and had begun
to engage in serious peace negotiations under United Nations
auspices. The Mexican military leadership, although conserva-
tive and anticommunist in outlook, had never been persuaded
that it faced a security threat arising from the spread of vio-
lence in Central America or that popular discontent in Mexico
had gathered sufficient force to provoke widespread domestic
disorder and revolutionary violence.

Historically, relations between the military establishments of
Mexico and the United States have not been close. Coopera-
tion reached its peak for a brief period during and after World
War II. In the Cold War atmosphere that followed, Mexico
opposed the United States concepts of regional security; in par-
ticular, it did not support the United States intervention in
Guatemala in 1954 and the trade embargo imposed against
Castro-led Cuba in the early 1960s. The country’s leaders felt
that the roots of violence in Central America could be found in
social and economic problems and in right-wing dictatorships,
rather than any Cuban and Soviet subversion. The defense
commission with the United States formed in World War II
became inactive, and military assistance — under which the
United States transferred US$40 million worth of modern
equipment to Mexico in the late 1940s — ended in 1950.

By the late 1980s, relations between the military establish-
ments of Mexico and the United States became somewhat
warmer as cooperation expanded in the fight against illicit
drugs. Purchases of United States military items, which had
amounted to US$140 million in the five-year period 1982 to
1986, rose steeply to US$410 million over the period from 1987
to 1991, accounting for three-quarters of all of Mexico’s arms
imports. Numerous Mexican officers received training in the
United States and became well acquainted with United States


National Security

military doctrine. On the whole, however, the Mexican armed
forces were less influenced by the United States military than
were the armed forces of other countries of Latin America. In
the mid-1990s, military assistance and concessional military
credits from the United States to Mexico still had not been
resumed. About US$500,000 was allocated by the United States
government for military education and training each year,
enabling more than 900 Mexican officers to attend United
States military institutions between 1977 and 1991. This figure
was exclusive of training funded by Mexico in connection with
weapons procurements.

Treaty Obligations

Mexico is a signatory to the principal defense-related multi-
lateral treaties and agreements in the Western Hemisphere but
has refrained from entering into alliances or collective security
arrangements that could be viewed as inconsistent with its prin-
ciples of nonintervention and self-determination. In early
1945, Mexico, along with nineteen other nations of the hemi-
sphere, signed the Act of Chapultepec. Under the act, the first
hemispheric defense agreement, signatory nations agreed that
if any aggression across treaty-established boundaries occurred
or was threatened, a meeting would be convened to determine
what steps, up to and including the use of armed force, should
be taken to prevent or repel such aggression.

Mexico signed the Inter-American Treaty of Reciprocal Assis-
tance, also known as the Rio Treaty, in September 1947. The
Rio Treaty, which expanded the responsibilities of nations
under the Act of Chapultepec, emphasized the peaceful settle-
ment of disputes among Western Hemisphere nations and pro-
vided for collective defense should any signatory be subject to
external aggression. Although the treaty was conceived as a
means to protect the nations of the hemisphere from possible
communist aggression, Mexico chose to interpret it as a juridi-
cal association of states, not as a military alliance. Each time
that the treaty has been invoked, Mexico has voted against the
adoption of collective security measures (see Foreign Rela-
tions, ch. 4).

Upon formation of the Organization of American States
(OAS) in April 1948, Mexico actively opposed proposals to cre-
ate a standing military force under OAS supervision. Mexico
insisted on limiting the newly created OAS defense body — now
known as the Inter-American Defense Board — to serving in a


Mexico: A Country Study

consultative capacity to OAS member nations. Subsequent
amendments to the charter have underscored the goal of
peaceful resolution of disputes among member states.

Mexico initially proposed and then became a signatory to
the 1967 Treaty of Tlatelolco, which prohibits the introduction
of nuclear weapons into Latin America. Similarly, it is a signa-
tory to the 1968 Nuclear Non-Proliferation Treaty, which limits
the application of nuclear technology to peaceful purposes.
Mexico has accepted the safeguard agreements of the Interna-
tional Atomic Energy Agency, which include the accounting
and control of nuclear reactor by-products that could be used
to make weapons, but has refused to permit on-site inspections
of its nuclear facilities.

Armed Forces

Constitutional and Legal Basis

The constitution of 1917 established the guiding principles
for the armed forces and placed restrictions on their activities.
Article 89 places the military under the control of the presi-
dent of the republic, who, as commander in chief, is responsi-
ble for seeing that the armed forces fulfill their obligation to
guarantee “internal order and external defense.” The restric-
tion on peacetime interference by military authorities in civil-
ian affairs or other activities not “directly connected with the
military discipline,” set forth by Article 129, has often been
abused, however, usually on the order of the president. The
final constitutional provision for establishing government con-
trol of the armed forces, Article 132, places all military facilities
and properties under federal jurisdiction.

A series of laws enacted in 1926 further shaped the armed
forces. The most important of these, the Organic Law, gave
them a threefold mission: “to defend the integrity and inde-
pendence of the nation, to maintain the constitution, and to
preserve internal order.” The basic law subsequently has been
modified to keep pace with political, economic, and social
changes in the Mexican state.

Three additional laws enacted in 1926 also sought to regular-
ize military practices. The Law of Promotions and Compensa-
tion established a pay scale for each rank and competitive
examinations for promotion. The Law of Military Discipline
further defined the obligations of the armed forces to society,
requiring that each soldier, “in fulfillment of his duties, sacri-


Headquarters of Secretariat of National Defense
Courtesy Arturo Salinas

fixe all personal interests to the sovereignty of the nation, to
loyalty toward its institutions, and to the honor of the National
Army.” The Law of Pensions and Retirements set a mandatory
retirement age and provided pensions for military retirees and
allowances for military dependents. Although all of these laws
have been modified to meet the needs of changing times, they
remain the institutional foundation of the Mexican military.

Organization of National Defense

The organization of the Mexican armed forces at the cabinet
level is distinct from that of many other Latin American
nations. Instead of a single ministry consolidating the com-
mand of the army, navy, and air force, two government minis-
tries are directly responsible for national defense: the
Secretariat of Nadonal Defense and the Secretariat of the Navy.
The head of each of these secretariats is a military officer who
holds cabinet rank and has regular, direct access to the presi-
dent of the republic, who is the supreme commander of the
armed forces.

After President Carlos Salinas de Gortari took office in 1988,
five cabinet-level councils were created within the offices of the


Mexico: A Country Study

president to oversee principal policy areas. One of these is the
National Security Council, which includes representatives of
the secretariats of government, foreign relations, national
defense, and the navy, as well as the attorney general’s office.
Narcotics control is one of the topics dealt with in the council.

The secretary of national defense (General Enrique Cer-
vantes Aguirre as of 1996) is selected by the president from the
ranks of active army general officers. The secretary normally
serves for six years, the same term as the president’s. Similarly,
the secretary of the navy (Admiral Jose Ramon Lorenzo Franco
in 1996) is chosen from the ranks of active admirals. Operating
through the General Staff, the secretary of national defense
commands army and air force units, the army zonal com-
mands, and logistics and administrative directorates. Under the
secretary of the navy are the chief of naval operations, the chief
of naval staff, and the naval zones that control operational

The army is by far the largest service branch. Of some
175,000 active armed forces personnel in 1996, 130,000 were in
the army, 8,000 in the air force, and 37,000 in the navy. The
army total at any one time included about 60,000 conscripts.
No conscripts were assigned to the air force or navy. A “reserve”
force of 300,000 is claimed, although this number is a man-
power pool rather than an existing trained force.

The size of the armed forces is modest considering Mexico’s
size and importance. Mexico has the smallest number of mili-
tary personnel per capita of any country of Latin America.
According to the United States Arms Control and Disarma-
ment Agency (ACDA), Latin America as a whole had 3.5 sol-
diers per 1,000 population in 1991. The corresponding figure
for Mexico was 1.9 soldiers per 1,000 population. In spite of the
steady increase in the armed forces — they have roughly dou-
bled in size since the mid-1970s — the number of soldiers per
capita has remained remarkably steady because of the parallel
increase in population.


The principal units of the Mexican army are six brigades and
a number of independent regiments and infantry battalions.
The brigades, all based in and around the Federal District
(encompassing the Mexico City area), are the only real maneu-
ver elements in the army. With their support units, they are
believed to account for 40 percent of the country’s ground


National Security

forces. According to The Military Balance, published by the
International Institute for Strategic Studies in London, the
army in 1996 had seven brigades: one armored, two infantry,
one motorized infantry, one airborne, one combined military
police and engineer brigade, and the Presidential Guard Bri-
gade. The armored brigade is one of two new brigades formed
since 1990 as part of a reorganization made possible by an
increase in overall strength of about 25,000 troops. The bri-
gade consists of three armored and one mechanized infantry

Each of the two infantry brigades consists of three infantry
battalions and an artillery battalion. The motorized infantry
brigade is composed of three motorized infantry regiments.
The airborne brigade consists of two army and one air force
battalion. The elite Presidential Guard Brigade reports directly
to the Office of the President and is responsible for providing
military security for the president and for visiting dignitaries.
The Presidential Guard consists of three infantry battalions,
one special force battalion, and one artillery battalion.

Distinct from the brigade formations are independent regi-
ments and battalions assigned to zonal garrisons. These inde-
pendent units consist of one armored cavalry regiment,
nineteen motorized cavalry regiments, one mechanized infan-
try regiment, seven artillery regiments, and three artillery and
eight infantry battalions. Infantry battalions, each composed of
approximately 300 troops, generally are deployed in each zone.
Certain zones also are assigned an additional motorized cavalry
regiment or one of the seven artillery regiments. Smaller
detachments often are detailed to patrol more inaccessible
areas of the countryside, helping to maintain order and resolve

The cavalry historically has been the most prestigious
branch of the army; in 1920, there were more cavalry squad-
rons than infantry companies. By the early 1980s, all mounted
cavalry had been transformed into motorized units — except
for one squadron retained for ceremonial purposes. The engi-
neers, air defense, and combat support and service units was
organized into separate regimental, battalion, and company
units, which are distributed among military zone installations.

Mexico in 1996 was divided into twelve military regions with
thirty-nine military zones. Zone boundaries usually correspond
with those of the country’s thirty-one states, with the headquar-
ters of the military zone located in the state capital. Some


Mexico: A Country Study

states, including Veracruz, Guerrero, and Chiapas, which have
been the scene of disturbances by peasant and Indian groups,
have more than one military zone apiece. The Federal District,
where Mexico City is located, is the seat of the First Military
Zone and also serves as headquarters of the First Military

Military zone commanders are appointed by the president,
usually on the recommendation of the secretary of national
defense. The senior zone commander in a given area also acts
as the commander of the military region in which the zone
falls. Zone commanders hold jurisdiction over all units operat-
ing in their territory, including the Rural Defense Force (see
Rural Defense Force, this ch.). They occasionally have served
the federal authorities as a political counterweight to the
power wielded by state governors. Zone commanders provide
the secretary of national defense with valuable intelligence
regarding social and political conditions in rural areas, and tra-
ditionally have acted in close coordination with the Secretariat
of National Defense on resource planning and deployment

Under a modernization program initiated in the late 1970s,
the army purchased a significant amount of new equipment, in
many cases replacing equipment that dated from the World
War II period. The army’s inventory of armored vehicles was
expanded and updated. The Panhard ERC-90 Lynx six-
wheeled reconnaissance car and the Panhard VBL M-ll light
armored car were acquired from France. Older designs, such
as the German HWK-11 tracked armored personnel carrier
(APC), remained in the inventory in 1996 (see table 13,
Appendix). Several domestic versions, the DN-3 and DN-5
Caballo and the Mex-1, have been added since the mid-1980s.
The M4 Sherman medium tank and several models of light
tank transferred by the United States after World War II were
retired, leaving Mexico without any tanks in its inventory. Plans
for a major expansion of the country’s own armament industry,
which might have included a domestic tank design, were cur-
tailed as a result of the debt crisis of 1982 (see Domestic
Defense Production, this ch.).

Except for five self-propelled 75mm howitzers, in 1996 the
army’s artillery consisted mainly of towed 105mm howitzers.
The army’s principal antitank weapons are French Milan mis-
siles, some of which are mounted on the VBL M-lls. Antiair-
craft weapons systems are limited to 12.7mm air defense guns.


Panhard ERC-90 Lynx tank
Courtesy Panhard

The army has no units equipped with tactical air defense mis-

Air Force

The Mexican armed forces saw the value of air power early.
In 1911 the Madero revolutionaries flew an airplane on a
bombing mission using grenades, and a year later, after
Madero became president, three military pilots were sent to
the United States for training. Shortly thereafter, one of the
rebel groups acquired several airplanes, which, flown by for-
eign mercenary pilots, supported their ground forces during
the advance southward in 1914. Unable to obtain additional
aircraft because of the war in Europe, the Carranza govern-
ment successfully developed and produced a biplane trainer
and subsequently a series of other models from both local
designs and from modifications of foreign planes.

During the 1920s, the army bought various war-surplus
bomber, reconnaissance, fighter, and training aircraft at low
cost, although the local aircraft industry continued to produce
its own models. In 1932 an air regiment was formed, consisting
of one squadron each of Vought Corsair, Douglas, and Bristol


Mexico: A Country Study

fighters. After the United States and Mexico entered World
War II, the United States transferred a considerable number of
primary and advanced trainers to Mexico, followed by light
bombers and amphibious reconnaissance planes that were
used to conduct antisubmarine patrols in the Gulf of Mexico.
The Mexican air force received additional trainers, bombers,
and transport aircraft after the signing of the 1947 Rio Treaty.
It acquired jet fighters from Canada and armed jet trainers
from the United States in the late 1950s.

The air force, organized into two wings and ten air groups,
had a personnel complement of 8,000 in 1996, including 1,500
assigned to the airborne brigade. The air force’s principal air
base, Military Air Base Number 1, is located at Santa Lucia in
the state of Mexico. Other major air bases are located at Ixte-
pec in Oaxaca, Isla Cozumel in Quintana Roo, Zapopan in
Veracruz, and Merida in Yucatan, as well as El Cipres and La
Paz (both in Baja California Sur) and Puebla and Pie de la
Cuesta (both in Guerrero).

Delivery, beginning in 1982, of ten F-5E Tiger II fighter air-
craft and two F-5F two-seater trainers from the United States
enabled Mexico to form a supersonic air defense squadron
armed with Sidewinder missiles. As part of a construction
agreement with the United States, the runways at the Santa
Lucia air base were lengthened and facilities renovated to
accommodate the new planes. In 1982 the air force also
acquired the first of some seventy Pilatus PC-7 turboprop
planes from Switzerland. In 1996 forty of the PC-7s were orga-
nized into three counterinsurgency squadrons, and the
remainder are available for both training and counterinsur-
gency operations. Also capable of being armed for counterin-
surgency tasks is one squadron of twelve AT-33s (Lockheed
Shooting Star), a much older aircraft used mainly as a jet
trainer. One squadron of Bell 205, 206, and 212 armed helicop-
ters also is designated for a counterinsurgency role. One squad-
ron of IAI 201s (the Israeli Arava, a short-takeoff-and-landing
utility transport) is assigned to search-and-air rescue, and a
photo reconnaissance squadron is made up of Rockwell Com-
mander 500Ss. Five transport squadrons are equipped with C-
47s, C-118s, C-130s, and some small aircraft. The Presidential
Transport Squadron, based at the Benito Juarez International
Airport in Mexico City, has seven Boeing 727s and one Boeing
737, together with smaller transport planes and a number of
helicopters (see table 14, Appendix).


National Security

A Westinghouse mobile radar system purchased in 1988 was
activated at the close of 1991 to track suspicious aircraft in Gua-
temalan air space flying toward the Mexican border. The sys-
tem was introduced both as a security measure to survey air
activity along the Guatemalan border and to track planes smug-
gling narcotics from South America.

In early 1996, the air force acquired twenty-nine UH-1H
“Huey” and eighteen Bell 206 helicopters from the Federal
Judicial Police for use in military-assisted counternarcotics
operations. In a sign of the growing militarization of Mexico’s
drug war under the administration of President Ernesto
Zedillo Ponce de Leon, in May 1996, negotiations were under-
way for the permanent transfer of an additional seventy-three
surplus “Hueys” from the United States to the Mexican air

Rural Defense Force

The Rural Defense Force (Guardia Rural), composed
entirely of volunteers, augments the military presence in the
countryside. The corps was formally organized under army
jurisdiction according to the Organic Law of 1926. Its origins,
however, date back to the period when the revolutionary agrar-
ian reform program was first implemented in 1915. In efforts
to protect themselves against the private armies of recalcitrant
large landowners, rural peasants organized themselves into
small defense units and were provided weapons by the revolu-
tionary government. Until 1955 enlistment in the Rural
Defense Force was restricted to peasants working on collective
farms or ejidos (see Glossary). After 1955 participation in the
Rural Defense Force was expanded to include small farmers
and laborers. All defense units, however, were attached to eji-
dos, possibly as a means to guarantee control.

The Rural Defense Force numbered some 120,000 in 1970,
but was being phased out in the 1990s. The Military Balance
listed the corps as having only 14,000 members in 1996. The
volunteers, aged eighteen to fifty, enlist for a three-year period.
Members do not wear uniforms or receive pay for their service
but are eligible for limited benefits. They are armed with out-
moded rifles, which may be the chief inducement to enlist.
Rudimentary training is provided by troops assigned to military
zone detachments.

The basic unit is the platoon (peloton) of eleven members
under immediate control of the ejido. Use of the unit outside


Mexico: A Country Study

the ejidos is by order of the military zone commander. One
asset of the corps is the capacity of its members to gather intel-
ligence about activities within the ejidos and in remote rural
areas seldom patrolled by military zone detachments. Corps
members also act as guides for military patrols, participate in
civic-action projects, and assist in destroying marijuana crops
and preventing the transport of narcotics through their areas.

Civic Action

Civic-action programs designed to improve socioeconomic
conditions and develop public facilities traditionally have been
an important mission of the armed forces. As early as 1921,
labor battalions created by order of President Obregon were
employed in road construction, irrigation projects, and rail-
road and telegraph maintenance. The Organic Law of the
Armed Forces directs the army and the air force to “aid the
civilian population, cooperate with authorities in cases of pub-
lic necessity, [and] lend assistance in social programs.” Pro-
grams designed to meet these aims have been given high
priority since the 1960s.

By the 1980s, civic-action programs encompassed a wide
range of activities carried out by military zone personnel, often
in coordination with government agencies. These programs
reinforced the army’s ties to the country’s rural inhabitants and
promoted national development. The army was placed in
charge of coordinating disaster relief in 1966 under Plan DN
III. Military zone personnel assist the rural population in liter-
acy programs, road building, bringing electricity to rural vil-
lages, repairing equipment, school restoration, immunization,
and dental care, and in some cases provide emergency surgery
in military hospitals. Military personnel also serve as escorts on
the national railroads, patrol federal highways on national holi-
days, and participate in campaigns to eliminate livestock dis-
ease and crop damage caused by insect infestations.

Secretariat of the Navy

Mexico created a modest navy after gaining independence
from Spain in 1821. At the time of the war with the United
States in 1846, the fleet was still very small and was forced to
remain in port to avoid destruction. Around 1875 several large
gunboats were acquired from Britain, and the naval academy
was established at the main Gulf of Mexico coast base of Vera-
cruz. Although a number of gunboats and cruiser/ transports


National Security

were added after the turn of the century, the navy played only a
limited role in the Mexican Revolution. After World War I and
again after World War II, the navy expanded by purchasing sur-
plus gunboats, frigates, and corvettes from the United States
and Canada.

To meet its broadened responsibilities, the navy has more
than doubled in size since the mid-1970s. According to Jane’s
Fighting Ships, the navy’s active-duty personnel numbered
37,000 in 1996. Of these, some 1,100 were assigned to naval avi-
ation, and another 8,600 were marines. Also falling under the
command of the navy are members of the coast guard and mer-
chant marine, who support the country’s growing maritime

The navy is entirely a volunteer force. Its personnel are dis-
persed among various naval zones and port installations. As
with the secretary of national defense, being appointed the sec-
retary of the navy requires not only a distinguished service
record but also a personal relationship with the president.
Although the general headquarters of the Secretariat of the
Navy is in Mexico City, naval command is divided between the
country’s two coasts. The commanding headquarters of the
Pacific fleet is at Acapulco; the Gulf of Mexico coast command
is at Veracruz. Both commands are organized into three naval
regions each. There are seventeen naval zones, one for each
coastal state. Some of the naval zones are further subdivided
into sectors. Through coordination within each coast com-
mand, patrol operations are carried out by the respective naval
zones along the country’s approximately 9,300 kilometers of
coastline and the nearly 3 million square kilometers of ocean
that make up Mexico’s territorial waters and EEZ.

The navy’s primary mission is to protect strategic installa-
tions and natural resources. This assignment translates into
safeguarding the country’s strategic oil installations (both at
port facilities and offshore), apprehending foreign vessels that
are fishing within Mexico’s EEZ without proper permits, and
interdicting shipments of drugs, weapons, and other contra-
band. Although foreign fishing poachers have been a persis-
tent problem for the navy, expanded efforts to conduct
maritime surveillance and intercept narcotics traffickers
absorb a growing amount of naval resources. Naval personnel
also participate in disaster relief efforts and in clean-ups to pre-
vent environmental damage from spills of oil and other toxic
substances. The Secretariat of the Navy supervises the dredging


Mexico: A Country Study

of port facilities, the repair and maintenance of vessels
assigned to the fleet and to the maritime industry, the conduct
of oceanographic research, and the preparation of nautical

During the 1980s, the navy benefited substantially from the
acquisition of new vessels and other equipment. Considerable
funds also were used for construction of new ports, renovation
of existing facilities, and development of shipyards and dry-
docks for repairs and maintenance. Many of the navy’s combat
vessels are World War II ships originally part of the United
States Navy, which have been modernized by the addition of
new weapons, electronic warfare and communications gear,
and the replacement of propulsion systems.

Purchases during the 1980s included two World-War-II vin-
tage Gearing-class destroyers, which joined a Fletcher-class
destroyer transferred from the United States Navy in 1970. The
Gearing-class vessels are armed with 127mm (5-inch) guns and
Bofors 40mm guns for air defense. They also are mounted with
antisubmarine rocket (Asroc) homing missiles (see table 15,
Appendix). In 1982 and 1983, Mexico acquired from Spain six
new Halcon-class large patrol vessels. The new ships are
equipped with platforms and hangars for German Bo-105 heli-
copters and are designed primarily to patrol the EEZ. The navy
commissioned four Holzinger-class fisheries-protection vessels
constructed at Tampico between 1991 and 1993. Sixteen Auk-
class patrol boats built in the United States during World War II
are reaching the end of their useful service life. All twelve
Admirable-class patrol boats were modernized in 1994. Thirty-
one Azteca-class twenty-one-meter inshore patrol boats are
used for fishery patrols. The first twenty-one of these were built
in Britain and the remainder in Mexico; Mexico modernized
the British-built vessels in 1987. The Mexican fleet also
includes small patrol craft, a number of river patrol vessels, and
survey ships and logistic support vessels. Naval cadets man the
Spanish-built sail training ship, the Cuauhtemoc.

Despite improvements, the Mexican navy in 1996 was not as
well equipped to protect its territorial waters and coasts as were
the navies of other large Latin American countries. The navy
lacks submarines and missile-armed, fast-attack craft. In addi-
tion, Mexico’s larger vessels are without modern surface-to-air
missiles for air defense.

The naval aviation arm has as its primary missions coastal
surveillance and search-and-air rescue operations. Maritime


National Security

reconnaissance is performed by Bo-105 helicopters armed
with machine guns and rockets, most of which operate off ship
platforms. In 1994 the naval aviation arm purchased four
MD500s, used for training purposes; four Fennee; and eight
Russian Mi-8 helicopters. In May 1996, the navy announced it
would purchase an additional twelve Mi-8s. Coastal patrols and
air rescue are carried out by six HU-16 Grumman Albatross
aircraft and nine Spanish-built C-212 Aviocars. A variety of
small transport, utility, and liaison planes complete the naval
aircraft inventory.

The marine force consists of a paratroop brigade of three
battalions, a battalion attached to the Presidential Guard Bri-
gade, three battalions with headquarters in Mexico City, Aca-
pulco, and Veracruz, and thirty-five independent companies
distributed among ports, bases, and zonal headquarters. The
marines are responsible for port security and protection of the
ten-kilometer coastal fringe. In addition to having light arms,
the marines are equipped with eight 105mm towed howitzers,
60mm and 81mm mortars, and 106mm recoilless rifles, as well
as Pegaso VAP-3550 amphibious vehicles.

Defense Spending

The government sets the overall size of the military budget,
but the actual allocation of funds to various activities and pur-
chases is largely determined within the defense ministries. Lit-
tle information is made available on individual expenditure

Because of exchange-rate variations and scarcity of data, it is
difficult to establish budgetary trends and annual expenditures
on defense. According to The Military Balance, the defense bud-
get for 1996 was 16.6 billion new pesos (NMex$; for value of
new peso — see Glossary), equivalent to US$3.0 billion. This fig-
ure compared to budget estimates of 1.577 trillion pesos
(US$641 million) in 1989 and 1.908 trillion pesos (US$678 mil-
lion) in 1990. No explanation was offered as to why the defense
budget appears to have more than quadrupled between 1990
and 1996.

Data published by the United States Arms Control and Disar-
mament Agency (ACDA) show higher levels of spending on
defense, which, according to ACDA figures, averaged about
US$1.5 billion annually during the decade 1983-93. The peak
levels of spending were between 1985 and 1987, when levels of
about US$2 billion were recorded. As ACDA notes, data on mil-



Various armored vehicles at Independence Day parade

Courtesy Arturo Salinas


Mexico: A Country Study

itary expenditures are of uneven accuracy and completeness.
In addition to accuracy problems caused by sharp variations in
exchange rates, capital spending and arms purchases may be
omitted in official data.

Based on data from The Military Balance, military expendi-
tures were 0.9 percent of gross domestic product (GDP — see
Glossary) in 1995. Military expenditures amounted to US$17
per capita in that year, reversing a declining trend that saw per
capita expenditures drop from US$20 in 1985 to US$13 in
1991. The economic burden of the Mexican military establish-
ment is comparable to the average expenditure for Central
American countries.

Domestic Defense Production

Mexico has had a small defense industry since before the
Revolution. In 1996 the defense industry consisted largely of
the production of small arms, ammunition, propellants, and
uniforms in government factories. As part of the moderniza-
tion program launched in 1976, the armed forces redirected
their efforts toward attaining a degree of self-sufficiency. The
General Directorate of Military Industry drew up plans for pro-
duction of large military systems, in cooperation with foreign
arms manufacturers. The major expansion originally envisaged
had to be curtailed, however, because of the economic difficul-
ties of the early 1980s, and projects discussed with West Ger-
man, Israeli, and Brazilian defense industries involving
coproduction of armored vehicles were abandoned. The coun-
try’s military industry has never reached the level of Brazil and
Argentina, the other major Latin American producers of
defense-related materiel.

Under a coproduction agreement with West Germany, the
Mexican defense industry began mass-producing the standard
infantry G-3 automatic rifle in the early 1980s. At the same
time, the state-owned Diesel Nacional truck factory began man-
ufacturing three-quarter-ton trucks for military use as well as
the DN-3 and DN-5 armored car, derived from the United
States Cadillac-Gage V-150 Commando. There were periodic
reports of negotiations with foreign producers to cooperate in
the manufacture of light and medium tanks, but questions of
financing and the availability of special steel intervened.

Between 1972 and 1982, the government allocated consider-
able funds to the industrial sector for scientific and technical
development related to military uses. In 1982 a telecommuni-


National Security

cations network using telex equipment was built to link mili-
tary zones with the headquarters of the Secretariat of National
Defense in Mexico City. The armed forces also began develop-
ing short-range, three- to twelve-kilometer, surface-to-surface
missiles, but never reached the production stage.

Since the Revolution, Mexico has had an aircraft industry
that produced a number of military models — both original
designs and licensed manufactures — that formed part of the
air force inventory until the 1960s. In an effort to revive the
local aircraft industry, Mexico held discussions with both Brazil
and Israel to produce trainer and light transport aircraft under
license, but plans had to be shelved for financial reasons.

Mexico’s major shipyards at Tampico on the Gulf of Mexico
and Salina Cruz on the Pacific Ocean have been involved in
the construction of patrol craft and auxiliary vessels. The larg-
est program, involving the manufacture of Azteca-class patrol
craft, was carried out under a licensed production agreement
with a British firm.


Recruitment and Conscription

Only volunteers serve in active units of the Mexican armed
forces. Most recruits are of a poor or indigent background; for
them, induction into the military is often seen as a source of
employment and as a means of upward social mobility. Soldiers’
pay is slightly higher than established minimum wages, and
recruits can hold second jobs. Vocational and literacy training
for armed forces personnel improves their chances of employ-
ment when their term of enlistment is completed.

The basic requisites for induction into the armed forces are
Mexican citizenship by birth, completion of primary schooling,
and absence of a criminal record. Initial recruits are between
the ages of eighteen and twenty-one. Enlistment is conducted
at military zone headquarters and other military installations.
Accordingly, most of the recruits tend to originate in the Fed-
eral District and central states, where bases are clustered.
Vacancies in local units are often filled by youths completing
their national military service.

Recruits enlisting for their first three-year term of service
receive basic training at the local unit to which they are
assigned, which usually is not far from the individual’s home.
During the first term of enlistment, the emphasis is on develop-


Mexico: A Country Study

ing basic military skills using an on-the-job training approach.
There is a high retention rate for first-term recruits, who often
elect to enlist for another three years. Recruits usually com-
plete subsequent terms of service away from their districts. Per-
sons completing this second term of service can hope to attain
the rank of sergeant. An increasing number of enlisted person-
nel serve until they are eligible for retirement, which comes
after twenty years. The small noncommissioned officer (NCO)
corps is concerned primarily with indoctrinating and molding
new recruits and serving in specialist functions. With a high
ratio of commissioned officers to NCOs, commissioned officers
tend to exercise most leadership responsibilities in troop units.

Applicants aspiring to become commissioned officers apply
for admission to one of the three service academies. The oldest
and most prestigious is the army’s Heroic Military College. To
be eligible for entrance, an applicant must be a male Mexican
citizen by birth, unmarried, and between the ages of sixteen
and twenty-one. Most candidates are sixteen to eighteen years
of age. Besides paying a processing fee, candidates are required
to pass a series of aptitude, psychological, and physical exami-
nations. Screening is rigorous; only top performers are
accepted, although those not selected are permitted to retake
the examinations the following year. Each year a few senior
NCOs who have shown leadership qualities are selected to
attend a special one-year course at the Heroic Military College
preparatory to commissioning.

The need to travel to Mexico City for the examinations and
the required processing fee discourage many potential candi-
dates from applying for admission. Applicants from distant
areas must meet their own travel and lodging costs. Along with
the fact that the standards of education are relatively higher in
the Federal District, these factors tend to ensure that a high
percentage of academy entrants are residents of the capital

Most officers are drawn from lower-middle-class and middle-
class families. Fewer than 5 percent are believed to be from the
upper class. Approximately 20 percent of cadets come from
military families, and many others have some military affilia-
tion through relatives. Young officers also tend to marry
women from military families. In view of the importance of
personal relationships within the military, such ties often are
relevant factors in the advancement of an officer’s career.
Because they often come from a lower social stratum than civil-


Cadets of the Heroic Military College
Courtesy Arturo Salinas

ians holding positions of comparable importance, military pro-
fessionals do not have the same prestige as the officer class in
some other Latin American countries.

The practice of women following soldiers on campaigns and
sometimes fighting in battles is well established in Mexican his-
tory and legend. Until the 1920s, Mexican armies did not pro-
vide regular commissary services, and soldiers in effect
employed women, known as soldaderas, to buy or forage for
food and other supplies and to cook their meals. During the
Revolution, women sometimes were directly involved in the
fighting. By the 1930s, however, the soldadera system had been
banished from the military as a source of immorality and vice.

Women are permitted to enlist in the modern Mexican mili-
tary and can enjoy careers in the armed forces, although they
are subject to numerous restrictions. The Organic Law states
that women have the same rights and duties as men in the
armed forces, but in practice women are not permitted to fill
combat positions, nor are they eligible for admission to the ser-
vice academies. Women who enlist receive the same basic train-
ing as men, including courses on the handling and knowledge
of weapons, followed by training in their assigned specialties.


Mexico: A Country Study

Women serve almost exclusively in the areas of administration,
medical care, communications, and physical education. The
highest rank a woman has achieved is that of major general, by
a senior military surgeon.

Obligatory military service for males was introduced in 1941
in response to Mexico’s possible entry into World War II. Dur-
ing January in the year of their eighteenth birthday, all Mexi-
can men are required to register with the local municipal
government for military service. Out of approximately 1.1 mil-
lion who register each year, some 320,000 are selected by lot-
tery to begin training during January of the following year. The
military obligation is for twelve months, which in practice
means no more than one morning a week of calisthenics and
drilling (although some draftees are now required to fulfill a
three-month period of full-time training).

On completing military service, conscripts remain in reserve
status until the age of forty. Completion of the service require-
ment is noted on a Military Identity Card that bears the individ-
ual’s photograph and must be revalidated every two years. The
identity card is required when applying for a passport, driver’s
license, or employment. This requirement provides the Mexi-
can government with a useful means of keeping track of its
adult male population.

Education and Training

One of the key factors in the development of the profes-
sional armed forces in Mexico is the military education system.
It is designed to underscore the importance of discipline, con-
formity to law, and obedience to higher authority. The objec-
tive is to instill in officers deference to civilian institutions and
to discourage any notion of military interference with the func-
tioning of the state. Instruction on political, social, and eco-
nomic topics is relatively sketchy in school curricula,
presumably to avoid heightening the officers’ political con-
sciousness. This limited education does not apply, however, to
the most senior level, the National Defense College (Colegio
de Defensa Nacional).

The military’s three service academies form the first tier of
the professional education system. The army’s Heroic Military
College, located in a southern suburb of Mexico City, dates
back to the 1830s and is the most prestigious of the three. Air
force cadets attend the Heroic Military College for two years,


National Security

followed by two years at the Air College in Guadalajara. The
Heroic Naval Military School for naval cadets is in Veracruz.

In 1991 there were 245 openings at the Heroic Military Col-
lege for entering cadets although the excellent modern facili-
ties completed in 1976 can accommodate many more. Entrants
range from fifteen to nineteen years old, although most are in
the sixteen-to-eighteen age-group. The training is physically
demanding and rigorous. Students are deliberately left with lit-
tle free time. Cadets who complete the four years of training
are considered to have achieved the equivalent of a prepara-
tory school education.

Graduates of the four-year army curriculum attain the equiv-
alent rank of second lieutenant and usually become platoon or
section commanders, spending three years with tactical units.
Young officers then may be designated to attend any of the
applied schools for advanced training in infantry, artillery,
engineering, support services, or cavalry. Graduates of the Air
College who select a flight or ground support orientation in
their course work receive the rank of second lieutenant as
pilots, general specialists, or specialists in maintenance and
supply. Cadets completing studies at the Heroic Naval Military
School are commissioned as ensigns prior to service with the
naval surface fleet or in naval aviation or the marine infantry.
The navy also maintains an aviation school at the Benito Juarez
International Airport in Mexico City.

If favorably rated, an army officer may be promoted to first
lieutenant after two years and remains at that rank for a mini-
mum of three years. The officer can resign his commission
after five years or, after passing a competitive examination and
being favorably evaluated, may be placed on a promotion list
for second captain in order of his test score (see Uniforms,
Ranks, and Insignia, this ch.). Similar requirements must be
met for advancement through the rank of lieutenant colonel.
The minimum service time is eight years to reach first captain,
eleven years to reach major, and fourteen years to reach lieu-
tenant colonel. The rate of promotion is fairly predictable. The
Senate, which must approve promotions to the rank of colonel
and above, generally resists advancing officers who have not
served a normal time in grade.

First and second captains who can meet admission standards
may be admitted to the Superior War College or, in the case of
naval officers, the Center of Superior Naval Studies. The Supe-
rior War College offers a three-year program for army officers


Mexico: A Country Study

and a two-year program for the air force. The equivalent naval
course is three years. Course work emphasizes preparation for
command and staff positions, including the study of adminis-
tration, strategy and tactics, war gaming, and logistics, as well as
more general subjects, such as military history, international
law, and foreign languages. On completion of the course, offi-
cers are considered to have military training roughly compara-
ble to that of the United States Army Command and General
Staff College at Fort Leavenworth, Kansas.

Conditions for acceptance to the Superior War College are
strict, as is the course work. Only about half of the entrants
complete the full three years, and only 7 percent of the officer
corps are graduates of the college. Those completing the
course successfully receive the degree of Licenciate in Military
Administration and the title of General Staff Graduate, which
is used with one’s military rank and commands some prestige.
Graduates also receive a stipend of between 10 and 25 percent
of their salary during the remainder of their active duty.

The National Defense College, created in 1981, is consid-
ered the culmination of professional military education.
Entrance is offered to a select group of senior army colonels
and generals and their counterparts in the air force and navy.
The one-year program includes advanced training in national
security policy formulation, resource management, interna-
tional relations, and economics. Each officer is required to
write a thesis involving field research on a topic involving
national security, politics, or social problems. The majority of
the professors at the college are civilians. Although graduation
from the college does not bring immediate promotion, most of
the generals reaching the highest positions in the military hier-
archy are alumni of the college.

A number of other service institutions, separate from the
officer training schools and the superior schools, fall under the
general categories of applications schools, specialization
schools, and schools offering basic NCO training and NCO
technical courses. These institutions include the Military
School of Medicine, the Military School of Dentistry, a group
of schools of nursing and other medical specialties, military
schools of engineering and communications, the Military
Application School of Infantry and Artillery, the Military Appli-
cation School of Cavalry, and a one-year school of instruction
in leadership for second and first sergeants.


National Security

Mexican officers also attend military schools in other coun-
tries of Latin America, as well as in France, Britain, Italy, and
Germany. Although Mexico sends proportionately fewer offi-
cers to military schools in the United States than some Latin
American countries, it uses United States training materials,
and United States military doctrine is influential.

Pay and Benefits

The Law of Promotions and Compensation and the Law of
Pensions and Retirement were promulgated in the 1920s as a
means to regularize military practices, bring the armed forces
under the control of the central government, and ensure the
stability of the electoral system created by the revolutionary
government. These laws, which have been adjusted periodically
to meet the changing requirements of the government and the
armed forces, form the backbone of the military pay and bene-
fits system.

The three branches of the armed forces provide uniform
pay and benefits for equivalent rank and years of service.
Throughout the 1950s and 1960s, military compensation rose
at a faster rate than the cost of living. This situation changed
during the 1970s, as pay failed to keep pace either with the rap-
idly increasing inflation rate or with earning power in the civil-
ian sector. In spite of spiraling inflation during the 1980s, pay
raises helped most military personnel keep abreast or slightly
ahead of the rising cost of living. Officers of lieutenant rank
and above enjoyed comfortable incomes. In the early 1990s,
however, pay scales for junior officers were described as so
low — about US$300 a month — that moonlighting was accepted
as necessary to maintain an adequate standard of living.

Although the government does not disclose the allocation of
individual items within the defense budget, it is estimated that
approximately 60 percent is dedicated to personnel expenses,
including administrative costs, salaries, and benefits. Perqui-
sites, bonuses granted for educational achievements, and sup-
plemental pay for those serving in command positions — from
the commander of a company to the secretary of national
defense — add considerably to officers’ base salaries. Both the
amount and the availability of fringe benefits increase as offi-
cers ascend in rank. Additional pay is also provided for hazard-
ous duty assignments.

Pensions are extended on a standard basis to all military per-
sonnel upon completion of service and to dependents or bene-


Mexico: A Country Study

ficiaries upon their deaths. This benefit has been increased on
numerous occasions to encourage older officers to retire and
thus open positions for younger officers. The mandatory retire-
ment age is between forty-five and sixty-five, depending upon
rank, but former secretaries of national defense hold active-
duty status all their lives. Under a 1983 modification of the Law
of Pensions and Retirement, an officer completing thirty years
of service can retire at 100 percent of his or her existing salary
and receive the same increases granted active-duty personnel.
The minimum benefit for those with fewer years of service is 20
percent of base pay.

The Mexican Armed Forces Social Security Institute (Insti-
tuto de Seguro Social para las Fuerzas Armadas Mexicanas —
ISSFAM) and the National Bank of the Army, Air Force, and
Navy (Banco Nacional del Ejercito, Fuerza Aerea, y Armada —
Banejercito) also provide benefits to military personnel and
their dependents. Under the ISSFAM, health care is extended
through facilities at regional military hospitals in each military
zone and the Central Military Hospital in Mexico City. The
quality of medical care is reported to be high, and physicians
are trained in such sophisticated specialties as microsurgery,
organ transplants, and cardiovascular surgery. Banejercito
offers low-interest credit and life insurance to military person-
nel and provides financing for the construction of dependent
housing at the country’s various military installations. Rent for
dependent housing is set at 6 percent of an individual’s
income. Other services and benefits are also available through
military zone installations. These services include primary and
secondary education for dependents, assistance with moving
expenses resulting from service-related transfers, various social
services, and access to shops similar to small commissaries. The
military also manages a number of farms throughout the coun-
try to help produce its own food supply.

Uniforms, Ranks, and Insignia

Mexico originally adopted its system of officer ranks from
the Spanish military. With some modifications, it has been
retained in the modern armed forces. The highest rank within
the Secretariat of National Defense is the rough equivalent of a
general in the United States Army. The only officers with the
rank of general are current army officers and former secretar-
ies of national defense. Generals are identified by insignia com-
posed of four silver stars and a gold eagle worn on their


National Security

epaulets (see fig. 12). The next highest rank, open to both
army and air force personnel, is the equivalent of lieutenant
general. Although there is no difference between the Spanish
name for this rank and that held by secretaries of national
defense, the officers are separately identified by three stars and
an eagle. The rank equivalents of major general and brigadier
general are distinguished, in addition to the emblem of the
gold eagle on their epaulets, by two silver stars and one silver
star, respectively.

Officers holding the rank of colonel command certain bri-
gades and cavalry regiments, serve as chiefs of staff for military
zones, or manage staff directorates. Colonels are identified by
three gold stars arranged in a triangle on their epaulets. The
equivalents of lieutenant colonels, a select few of whom may
command a battalion or cavalry squadron but most of whom
serve as instructors or administrative aides, wear two gold stars.
Majors sometimes serve as second-in-command of battalions or
squadrons, but usually are assigned to personnel management
and training. They are identified by a single gold star.

Other commissioned ranks include first captain and second
captain, both comparable to the United States rank of captain.
First captains wear three gold bars on the epaulet; second cap-
tains have two-and-one-half gold bars. Captains command com-
panies, squadrons, and batteries. Below these ranks are first
lieutenants, with two gold bars, and second lieutenants, identi-
fied by a single gold bar.

The rank insignia of commissioned naval officers consist of
gold stripes above the sleeve cuff, the uppermost stripe incor-
porating a braided loop. The rough equivalents of the United
States Navy’s ranks of admiral, vice admiral, and rear admiral
wear insignia consisting of a wide gold stripe plus narrow and
looped stripes. The equivalents of admiral and vice admiral are
consolidated. The sleeve insignia of other officer ranks are sim-
ilar to those of the corresponding ranks of the United States
Navy, except that the upper stripe is looped. Officers of marine
infantry units are distinguished by red piping on their insignia
of rank.

The rank titles and rank insignia for enlisted personnel in
the army and air force are the same (see fig. 13). The highest
rank, sergeant 1st class (or master sergeant), is recognized by
green epaulets with three horizontal red bars. The next two
lowest ranks, sergeant and private 1st class (or corporal special-
ist), are distinguished by two and one horizontal red bars,


Mexico: A Country Study


National Security

respectively. The soldado de prime? a, corresponding to the
United States rank of private in the army and airman in the air
force, has two short vertical red bars. The lowest rank for each
service, basic private or airman basic (soldado), wears a plain
green epaulet.

The rank insignia of enlisted naval personnel are indicated
by white stripes above the sleeve cuff. Enlisted personnel in the
navy have only three ranks, chief petty officer, petty officer, and
seaman. A chief petty officer has three white stripes and a petty
officer two. A seaman has a single V-shaped stripe.

The army officer corps has a blue dress uniform and a dark
field-green service uniform. A khaki uniform is used for hot
weather. The uniforms worn by naval personnel, including
marines, are standard dark blue or white. The dress uniforms
of army enlisted personnel are dark field-green; their branch
of service is designated by a colored bar displayed on the epau-
let. Infantry personnel wear a scarlet red bar; cavalry, hussar
blue; artillery, crimson; armored, gray; and engineers, cobalt
blue. The air force uniform was modified somewhat from that
of the army in the early 1980s. Air force personnel are identi-
fied by purple bars. Members of the elite airborne brigade are
distinguished by their camouflage fatigues and purple berets.
Dress uniforms for enlisted army personnel include the use of
helmets as headgear. Members of the officer corps wear caps
with elaborate visor decorations and rank designations.

Public Order and Internal Security

Criminal activity, much of it engendered by narcotics traf-
ficking and production, has, since the 1970s, constituted the
most serious problem facing military and police agencies con-
cerned with internal security. Mexico’s leaders are increasingly
conscious of the threat that drug cartels, with enormous funds
and weapons at their disposal, pose to the nation’s political and
social stability. The illicit movement of drugs generates huge
amounts of money that can be employed to corrupt public offi-
cials at both the state and federal levels. Traffickers also can
assemble large weapons arsenals, which contribute to the atmo-
sphere of lawlessness in society (see Narcotics Trafficking, this

Until the uprising in Chiapas in 1994, revolutionary activity
amounting to insurrection against the state had not been a
major source of concern for several decades. Groups that
sprang up to exploit the plight of the downtrodden and the dis-


Mexico: A Country Study


National Security

parities between the rich and poor have failed to coalesce into
a single movement powerful enough to threaten the stability of
the central government. The fragmentation of the forces of
protest has been ascribed to several factors, including the terri-
torial expanse and geographic diversity of the country, the pre-
occupation with local injustices suffered at the hands of those
holding economic power, and the government’s determination
to deal harshly with any threat to public order.

During the late 1960s and early 1970s, several guerrilla orga-
nizations operated in the countryside. The three principal
groups were the National Revolutionary Civic Association, the
Mexican Proletarian Party, and the Party of the Poor. Each was
directed by a charismatic leader, who eventually was tracked
down and killed in confrontations with the military or police.
None of the groups was able to carry on organized operations
after its leader’s death.

The police claimed in 1981 that they had destroyed the last
cell of the Twenty-Third of September Communist League, the
largest and longest-lived of Mexico’s urban guerrilla groups.
The league reportedly had incorporated members from several
other urban guerrilla fronts. Many terrorist acts were commit-
ted in the name of the league before its eradication, including
the kidnapping of two United States consular officers in 1973
and 1974 (one officer was freed after a ransom was paid, and
the other was murdered) .

The Chiapas Rebellion

Mexico’s rural indigenous peoples periodically have risen in
protest against poverty and encroachment by large farmers,
ranchers, and commercial interests on contested land. The
most recent and serious such uprising occurred on January 1,
1994, when the Zapatista National Liberation Army (Ejercito
Zapatista de Liberation Nacional — EZLN) rebelled, capturing
four municipalities in Chiapas state. Some of the group,
believed to number about 1,600, were armed with semiauto-
matic and assault rifles, whereas others were armed only with
sticks and wooden bayonets. Although the group’s attacks
seemed well planned, army units, supported by air force
strikes, were able to regain control after the initial surprise. At
least 12,000 troops were transported to the scene. Officials
announced that 120 deaths had resulted, although church offi-
cials said 400 lives had been lost. Five rebels apparently were
executed while bound, and other deaths may have been the


Mexico: A Country Study

result of extrajudicial executions. Many disappearances of peas-
ants were reported, and there was indiscriminate strafing of
hamlets. The government declared a unilateral cease-fire after
twelve days and announced several goodwill gestures as a pre-
lude to reconciliation talks with the rebels, who were repre-
sented by their masked leader, Subcommander Marcos.

According to government sources, the EZLN, commonly
known as the Zapatistas, is not a purely indigenous movement,
but is instead an alliance of middle-class intellectuals and radi-
calized indigenous groups dating from the early 1980s. The
EZLN began as an offshoot of the National Liberation Forces
(Fuerzas de Liberacion Nacional — FLN), a Maoist guerrilla
group that had been largely dormant since the 1970s. At the
start of the Zapatista rebellion, command of the Zapatista army
was jointly held by FLN veterans from Mexico City and a “clan-
destine committee” of Chiapas Indians representing the vari-
ous ethnic groups residing in the area.

In February 1995, on the eve of a new offensive against rebel
strongholds, the government identified Subcommander Mar-
cos as Rafael Sebastian Guillen, a white, middle-class graduate
in graphics design from the National Autonomous University
of Mexico (Universidad Nacional Autonoma de Mexico—
UNAM). In the initial January 1994 Zapatista raids, the charis-
matic guerrilla leader had become an international media star,
quickly assuming the status of a folk hero among many Mexi-
cans. Capitalizing on his newfound fame and his proximity to
the rebel army, Marcos is believed to have wrested control of
the EZLN from its Mexico City leadership.

Despite a formidable government offensive involving
approximately 20,000 army troops venturing into Zapatista-
held territory, Subcommander Marcos and his rebel force
eluded capture. By late February 1995, a second cease-fire had
been declared. Soon thereafter, the government and the rebels
embarked on a second major round of peace talks. In early
1996, the Zapatistas declared their willingness in principle to
lay down their arms and become a legal political party pending
major reforms of the political system. Despite their ability to
grab headlines and attract international support, the Zapatistas
remain a marginal political force and are not considered a seri-
ous military threat outside of Chiapas.

Police and Law Enforcement Organizations

A number of federal, state, and local police and law enforce-


National Security

ment organizations exist to provide for internal security. Their
responsibilities and jurisdictions frequently overlap, a factor
acknowledged in 1984 when the government created a
national consulting board designed to “coordinate and advise
police forces” throughout the country. The senior law enforce-
ment organization in Mexico is the Federal Judicial Police,
which is controlled by the attorney general. The plainclothes
force acts as an investigative agency with arrest power for the
Office of the Attorney General. The foremost activity of the
Federal Judicial Police is carrying out investigations and mak-
ing apprehensions related to drug trafficking. Espionage, arms
trafficking, and bank robberies also fall under its purview. The
Federal Judicial Police serves as the government’s liaison with
the International Criminal Police Organization (Interpol). Its
role can be compared to a combination of the United States
Federal Bureau of Investigation (FBI) and the United States
Drug Enforcement Administration (DEA).

The jurisdiction of the Federal Judicial Police encompasses
the entire nation. For control purposes, its jurisdiction is
divided into thirteen zones with fifty-two smaller detachment
headquarters. Under the coordination of the local federal
prosecutor, each zone is headed by a second commandant of
the Federal Judicial Police, who in turn directs the group chiefs
in the outlying detachments. Individuals arrested by the Fed-
eral Judicial Police are placed at the disposition of the local
federal prosecutor, who appoints subordinate attorneys to
assess each case.

Although it remains one of the smaller law enforcement
agencies, the Federal Judicial Police tripled in size between
1982 and 1984, from 500 personnel to an estimated 1,500. In
1988 an assistant attorney general’s office for investigating and
combating drug trafficking was formed with an additional
1,500 Federal Judicial Police agents. In 1990 the office was
expanded and given interagency coordinating functions in the
battle against narcotics.

The principal Mexico City police force, the Protection and
Transit Directorate, also known as the Traffic Police, consists of
some 29,000 officers organized into thirty-three precincts. It is
the largest law enforcement organization in Mexico. More than
100 serious crimes are reported each day in Mexico City, and
on average in the Federal District in the first quarter of 1997
one police officer was killed and one injured weekly. A sense of
insecurity prevails among many citizens because of the lack of


Mexico: A Country Study

confidence in the police and the fear of police misbehavior
and crime.

The Federal District police are poorly paid; in 1992 they
earned between US$285 and US$400 a month. Double shifts
are common, although no extra pay for overtime is provided.
Incomes can be supplemented in various ways, including from
petty bribes (mordidas) from motorists seeking to park in
restricted zones. Police are said to be obliged to pay for more
desirable assignments where the possibilities of extorting pay-
ments from drivers in lieu of fines is greater. However, junior
officers are forced to pass along a daily quota of bribes to more
senior officers. In one case, a tow truck driver admitted that he
had paid more than US$1,000 for his lucrative job and said that
he had to contribute US$32 daily to his superior. In 1992 after
a number of officers expressed their objections to the system,
the mayor of Mexico City set up offices to receive and investi-
gate citizen complaints.

A number of smaller law enforcement bodies exist at the
state and local level. Each of the country’s thirty-one states and
the Federal District has its own judicial police — the State Judi-
cial Police and the Federal District Judicial Police. State police
are under the direction of the state’s governor; the Federal Dis-
trict Judicial Police fall under the control of the Federal Dis-
trict attorney general. The distinction between crimes
investigated by State and Federal Judicial Police is not always
clear. Most offenses come under the state authorities. Drug
dealing, crimes against the government, and offenses involving
several jurisdictions are the responsibility of the federal police.

Cities and municipalities have their own preventive and
municipal police forces, which are responsible for handling
minor civil disturbances and traffic infractions. The Federal
Highway Police patrols federally designated highways and
investigates traffic accidents. Highway police are assisted by
military personnel on national holidays.

Both state and municipal forces operate from precinct sta-
tions, called delegaciones. Each delegation has an average of 200
police officers attached to it. The ranking officer is known as a
comandante, equivalent to a first captain in the military. Most of
the remaining personnel hold the ranks of first sergeant, sec-
ond sergeant, and corporal.

Immigration officers, directed by the Mexican Immigration
Service under the Secretariat of Government (Secretaria de
Gobernacion), have the right to detain suspected undocu-


National Security

merited aliens and, under certain conditions, to deport them
without formal deportation proceedings. Customs officers,
controlled by the Secretariat of Finance and Public Credit
(Secretaria de Hacienda y Credito Publico), Credito are
deployed at borders and at international airports to interdict
contraband entering Mexico. The Bank of Mexico also oper-
ates its own security division, which is charged with enforcing
banking and monetary laws, including cases of counterfeiting,
fraud, and money laundering.

A number of unofficial paramilitary groups incorporating
various police officials have existed in the past to deal with
rural and urban guerrillas and illegal groups. The most notori-
ous paramilitary group was the White Brigade (Brigada
Blanca) whose existence was officially denied, although it was
known to be active from 1977 until 1980, when the government
dismantled it. The White Brigade consisted of a group of offi-
cers from the army and the police forces that used illegal tac-
tics to destroy guerrilla movements. Published reports held
that the White Brigade was responsible for the “disappearance”
of several hundred leftists, most of whom the government
claimed were killed in fights between rival leftist groups. Politi-
cally motivated “disappearances” tapered off sharply during the
1980s, but were once again being reported in the mid-1990s in
connection with the unrest in Chiapas.

The government has repeatedly denounced abuses and cor-
ruption by the Federal Judicial Police and other police forces.
Numerous reforms have been announced, personnel shifted,
and codes of procedures adopted. Allegations of police brutal-
ity have declined, but torture, wrongful arrests, and involve-
ment in drug trafficking have not been eliminated because
abuses are so deeply rooted in the police agencies, and viola-
tors for the most part have been able to act with impunity (see
Human Rights Concerns, this ch.).

In 1991 Attorney General Enrique Alvarez del Castillo, who
was reported to have impeded several human rights investiga-
tions against the police, was abruptly removed from office and
replaced by Ignacio Morales Lechuga. Morales quickly
announced a crackdown on corruption, including a reorgani-
zation of the Federal Judicial Police, the creation of special
anticorruption and internal affairs units, as well as a unit to
protect citizens against crimes committed by the police. In
addition, all federal police units were placed under the control
of a civilian deputy attorney general. New high-level officials


Mexico: A Country Study

supervised police activities in sensitive border areas. These
reform measures were announced soon after a jailed drug lord
took over a prison in Matamoros, claiming that agents of the
Federal Judicial Police aligned with another drug lord were
threatening his life.

Despite Morales’s reputation as an upright official prepared
to dismiss police agents and government prosecutors suspected
of ties with drug traffickers, he was replaced in early 1993.
Later reports accused some of Morales’s subordinates of drug-
related corruption. The new attorney general, Jorge Carpizo
MacGregor, was a respected human rights activist. Carpizo
acknowledged in a detailed report the close relations between
criminals and law enforcement agencies and produced his own
program to eliminate deficiencies and corruption among the
police. His reforms brought some progress; some members of
the security forces were charged and sentenced, and human
rights violations declined, but the so-called “culture of impu-
nity” still prevailed. Carpizo resigned as attorney general in
early 1994 and was replaced by Diego Valadez.

The 1994 assassinations of PRI presidential candidate Luis
Donaldo Colosio Murrieta and PRI Secretary General Jose
Francisco Ruiz Massieu shook the highest levels of federal law
enforcement. After failing to make significant progress in
investigating the Colosio case, Attornev General Valadez was
replaced in Mav 1994 by Humberto Bemtez Trevino. Initially
declaring that the Colosio assassination was the work of a lone
gunman, the Attorney General’s office later revised its theory
based on videotape evidence that suggested a conspiracy of up
to six individuals working in concert to allow the alleged gun-
man to approach the candidate during a crowded campaign
rally. The post of attorney general underwent yet another
change in early 1996 when incoming President Zedillo
replaced Bemtez with an opposition congressman, Fernando
Antonio Lozano Gracia. Lozano’s tenure was significant
because it was the first time a non-PRI official held the post.

Late in 1994, the assassination of Jose Francisco Ruiz Mas-
sieu prompted a special investigation headed by Deputy Attor-
nev General Mario Ruiz Massieu, brother of the slain
politician. After calling dozens of PRI officials to testify, Ruiz
resigned abruptly in November, accusing high-level PRI func-
tionaries of complicity in the killing and of impeding further
progress in the investigation. In early 1996, the investigation
still had produced no results.


National Security

National Intelligence Agencies

From the 1940s until it was disbanded in 1985, the Federal
Directorate of Security, which was under the control of the Sec-
retariat of Government, was the primary agency assigned to
preserve internal stability against subversion and terrorist
threats. The directorate was responsible for investigating
national security matters and performed other special duties as
directed by the president. It acted as the equivalent of the
United States DEA in the Mexican government. A plainclothes
force, the directorate had no legal arrest powers nor formal
authority to gather evidence, although it could call upon the
assistance of other government agencies and could use other
surveillance techniques.

By the final years of its existence, the directorate had more
than doubled in size to some 2,000 personnel. The agency’s
demise came after it became evident that many of its personnel
were in league with major drug traffickers. Its successor was the
Center for Investigation and National Security (Centro de
Investigacion y Seguridad Nacional — CISN). Although for-
mally under the Secretariat of Government, CISN is said to
operate under direct presidential control. Still primarily con-
cerned with gathering intelligence, CISN also has expanded
activities to include opinion polling and analysis of domestic
political and social conditions. In 1992 illegal wiretaps were
found in a meeting room to be used by the central committee
of the opposition National Action Party (Partido de Accion
Nacional — PAN). Although the government denied any official
involvement, the local representative of CISN was forced to

Human Rights Concerns

Brutality and systematic abuses of human rights by elements
of the Mexican internal security forces are pervasive and have
largely gone unpunished. Practices cited by human rights
groups include the use of torture, extrajudicial killings, disap-
pearances, arbitrary detention, and other cruelties perpetrated
against private persons and prisoners. According to several
sources, the number and seriousness of such offenses has
declined somewhat in the early 1990s. The improvement has
been attributed to the greater determination of the national
government to prosecute offenders and to the work of national
and local human rights agencies in exposing instances of


Mexico: A Country Study

police violations of human rights and in pressing for punish-

In 1990 the Mexican government established the National
Human Rights Commission (Comision Nacional de Derechos
Humanos — CNDH). Initially under the Secretariat of Govern-
ment, the CNDH was granted constitutional status and full
autonomy under a law enacted in 1992. By the following year,
similar offices to investigate abuses had been established in all
states of Mexico. The CNDH has the power to compel officials
to grant access and give evidence. Its recommendations are
nonbinding on government agencies, however. As of 1993, 268
of 624 CNDH recommendations had been followed fully.
These resulted in eighty-two people being arrested and twenty
sentenced to prison terms averaging more than five years for
human rights violations.

According to the private human rights organization,
Amnesty International, state judicial police and other law
enforcement agencies frequently use torture in the form of
beatings, near-asphyxiation, electric shock, burning with ciga-
rettes, and psychological torture. Most victims are criminal sus-
pects, but others, such as leaders of indigenous groups or civil
rights activists engaged in demonstrations or other peaceful
activities, have been targeted as well. According to the CNDH,
complaints of torture declined from 446 in its first year of oper-
ation to 141 cases in its fourth.

New laws enacted in 1991 permit courts to accept confes-
sions only when made before a judge or court official in the
presence of defense counsel. Similar rules were adopted by sev-
eral states. Formerly, confessions obtained under duress were
admitted as evidence in court. Some defendants have claimed
that even with the change, they still fear torture if they fail to

Although in the 1990s fewer new cases of human rights viola-
tions were reported each year, numerous charges of extrajudi-
cial killings continue to be made against the police. Police
linked to drug rings have been accused of narcotics-related
executions. In several well publicized instances, civil-rights
workers were slain, as were peasant activists involved in disputes
over land titles. Police often assist local landowners in evicting
peasant and urban squatters in conflicts over land and in
employing violence without appropriate judicial orders.

Police officers seldom are prosecuted or dismissed for
abuses. In 1992, however, the attorney general removed sixty-


National Security

seven Federal Judicial Police agents and federal prosecutors
and referred 270 cases of alleged corruption or human rights
violations for prosecution. Acceptance of the CNDH has grown
steadily, and its investigations have resulted in a reduction of
reported police misconduct, especially at the federal level.

According to the CNDH, illegal deprivation of liberty is the
most common human rights complaint among its human
rights cases. Between 1990 and 1992, there were 826 allegations
of arbitrary detentions. Torture complaints numbered 446 in
the commission’s first year but fell to 290 during its second.
Nearly 100 nongovernmental human rights monitoring groups
also have formed, making it increasingly difficult for law
enforcement bodies to remain indifferent to public opinion.
Nevertheless, the United States Department of State, in its
Country Reports on Human Rights Practices for 1995, reported a
continuing failure to try, convict, and sentence prison and
police officials guilty of abuse.

Criminal Justice System

The judiciary is divided into federal and state systems. Fed-
eral courts have jurisdiction over major felonies, including
drug trafficking. In the federal system, judicial power is exer-
cised by the Supreme Court of Justice, circuit courts, and dis-
trict courts (see Judicial, ch. 4). The first chamber of the
Supreme Court, composed of a president and four other
judges, deals with penal affairs. Twelve collegiate circuit courts,
each with three magistrates, deal with the right of amparo (con-
stitutional rights of an individual, similar to habeas corpus).
Nine unitary circuit courts, of one magistrate each, deal with
appeals. There are sixty-eight one-magistrate district courts.
State judiciary systems following a similar pattern are com-
posed of state supreme courts, courts of first instance, and jus-
tices of the peace or police judges.

In most instances, arrests can be made only on authority of a
judicial warrant, with the exception of suspects caught in the
act of committing crimes. Suspects often are arrested without
warrants, but judges tend to overlook this irregularity. Those
arrested are required to be brought before an officer of the
court as soon as possible, generally within forty-eight hours
(ninety-six hours when organized crime is alleged), whereupon
their statements are taken and they are informed of the
charges against them. Within seventy-two hours of arraign-


Mexico: A Country Study

ment, the judge must remand the arrested person to prison or
release him or her.

Criminal trials in nearly all cases are tried by a judge without
a jury. The judge acting alone bases his or her verdict on writ-
ten statements, depositions, and expert opinion, although in
some instances oral testimony is presented. Defendants have
access to counsel, and those unable to afford legal fees can be
assigned public defenders. The quality of pro bono counsel is
often inferior. The accused and his or her lawyer do not always
meet before trial, and the lawyer may not appear at the impor-
tant sentencing stage. The right to a public trial is guaranteed,
as is the right to confront one’s accusers and to be provided
with a translator if the accused’s native language is not Spanish.
Under the constitution, the court must hand down a sentence
within four months of arrest for crimes carrying a maximum
sentence of two years or less, and within one year for crimes
with longer sentences.

The entire process — the time for a trial, sentencing, and
appeals — often requires a year or more. According to Amnesty
International, a large number of persons charged with crimes
have been held far beyond the constitutional limits for their
detention. The long trial process and the detention of those
who cannot qualify for or make bail are major causes of
crowded prison conditions.

The penal code stipulates a range of sentences for each
offense. Sentences tend to be short, in most cases not longer
than seven years. The actual time of incarceration is usually
three-fifths of the sentence, assuming good behavior. Those
sentenced for less than five years may avoid further time in jail
by payment of a bond.

Prison Conditions

The penal system consists of both federal and state correc-
tional institutions. The largest federal prison is the peniten-
tiary for the Federal District. The Federal District also sends
prisoners to four detention centers, sixteen smaller jails, and a
women’s jail. Each state has its own penitentiary. There are, in
addition, more than 2,000 municipal jails. As of the end of
1993, nearly 95,000 inmates were in Mexican prisons; almost
half were persons still awaiting trial or sentencing.

Overcrowding of prisons is chronic. Mistreatment of prison-
ers, the lack of trained guards, and inadequate sanitary facili-
ties compound the problem. The United States Department of


National Security

State’s country reports on human rights practices for 1992 and
1993 state that an entrenched system of corruption under-
mines prison authority and contributes to abuses. Authority
frequently is exercised by prisoners, displacing prison officials.
Violent confrontations, often linked to drug trafficking, are
common between rival prison groups.

Mexican prisons also exhibit some humane qualities. In
1971 conjugal visiting rights were established for male prison-
ers and later extended to females. Prisoners held at the penal
colony on the Islas Tres Marias off the coast of Nayarit are per-
mitted to bring their entire families to live temporarily. Women
are permitted to keep children under five years of age with

Based on interviews at a smaller state prison, United States
penologist William V. Wilkinson found in 1990 that serious
overcrowding, lack of privacy, and poor prison diets were the
most common complaints. Wilkinson found no deliberate mis-
treatment of inmates. The prison fare generally was supple-
mented by food supplied by prisoners’ families or purchased
from outside. Prisoners with money could buy items such as
television sets and sports equipment. Through bribery, prison-
ers could be assigned to highly prized individual cells, where
even air conditioners were permitted.

A major building program by the CNDH added 800 prison
spaces in 1993 and 1994. In 1991 Mexico’s only maximum secu-
rity facility, Almoloya de Juarez, was completed. Major drug
traffickers were transferred to it from other prisons. The
prison’s 408 individual cells are watched by closed-circuit televi-
sion and the most modern technical and physical security
equipment. Violence in prisons is a constant problem as a
result of overcrowding, lack of security, and the mixing of male
and female prisoners and of accused and sentenced criminals.

Imprisonment of peasants, often for growing marijuana,
puts a heavy demand on the system. Through the efforts of
CNDH, a program of early release and parole benefited 1,000
people incarcerated on charges of growing marijuana in 1993.

Under the terms of the 1977 Prisoner Transfer Treaty
between the United States and Mexico, United States prisoners
in Mexican jails and Mexican prisoners in United States jails
may choose to serve their sentences in their home countries.
An extradition treaty between the United States and Mexico
took effect in January 1980. It requires the mutual recognition
of a crime as defined by the laws of each nation. Because of the


Mexico: A Country Study

extensive processing required under extradition requests, how-
ever, informal cooperation has developed among police on
both sides of the border. Suspected criminals who flee to the
neighboring country to escape apprehension routinely are
turned over without formal proceedings to police in the coun-
try where the crime was committed.

Noncompliance with the Prisoner Transfer Treaty has occa-
sionally created friction between the United States and Mexico.
The United States strongly criticized Mexico’s decision in 1988
to release William Morales, a leader of the Puerto Rican Armed
National Liberation Front, who was wanted for a series of
bombings in New York in 1978. Mexico rejected a United States
extradition request even though a Mexican court had found
Morales extraditable. Washington objected particularly to the
initial Mexican characterization of Morales as a “political

The death penalty has not been applied in Mexico since
1929, when the assassin of president-elect Obregon was exe-
cuted. The federal death penalty was abolished under the Fed-
eral Penal Code of 1930, and by 1975 all state codes also had
eliminated the death penalty. The military, however, still holds
certain offenses as punishable by death, including insubordina-
tion with violence causing the death of a superior officer, cer-
tain kinds of looting, offenses against military honor, and

Narcotics Trafficking

Mexico is a major source of heroin and marijuana destined
for the United States, as well as the principal route of transit for
South American cocaine. In 1994 Mexico supplied 60 to 80
percent of marijuana imported into the United States, and
Mexican heroin accounted for 20 percent of the United States
market. The United States government estimates that 50 to 70
percent of cocaine smuggled into the United States comes by
way of Mexico, most of it entering Mexico from Colombia by
private aircraft or ship, then transported by land across the
United States-Mexican border.

Drug abuse among Mexicans has remained relatively low,
although cocaine use is on the rise, particularly along the bor-
der area, in major tourist centers, in large universities, and
among street children in Mexico City. The Mexican attorney
general has said that Mexico is fast becoming a drug-consum-
ing nation. He cited economic hardship, urbanization, and the


National Security

collapse of traditional family life as primary causes. A national
drug control campaign, instituted in 1992, introduced drug
education in schools, gave extensive publicity to prevention
measures, and created a program to assist hospitalized drug

Coordination of United States and Mexican efforts to com-
bat drug trafficking increased greatly during the terms of presi-
dents Salinas (1988-94) and Zedillo (1994- ). Mexico widened
the scope and intensity of its counternarcotics effort, increas-
ing personnel and budgets threefold between 1989 and 1993.
As in the past, corruption among the police at both low and
higher levels, lax enforcement, and weak legal constraints have
continued to hinder the effectiveness of Mexico’s interdiction

Cooperation between the two countries on narcotic crop
eradication dates from 1961. For two decades until Mexico
assumed all of the costs of the programs in 1993, the United
States gave financial support of as much as US$20 million a
year to the antidrug campaign. DEA agents continue to serve
in Mexico, and the United States supplies leased helicopters to
aid Mexico’s efforts.

In 1992 the United States estimated that about 6,600 hec-
tares of opium poppies used in the production of heroin had
been eradicated, representing 50 percent of the opium poppy
crop. The potential amount of heroin that could be produced
increased to 6 tons in 1994 from 4.9 tons in 1993. Some 8,500
hectares of marijuana under cultivation, or 44 percent of the
crop, were destroyed in 1994. In many areas, marijuana is diffi-
cult to detect because it is planted with corn or in small plots
concealed by trees or shrubs.

Cocaine shipments generally reach Mexico from Central
America by plane or are shipped to Mexican ports on the
Pacific. They are then trucked to locations throughout Mexico
for later transshipment over land to the Mexican-United States
border. In 1990 a joint United States-Mexico air interception
program was launched. The Mexican/United States unit
responsible is the Northern Border Response Force. It consists
of 1,800 members, overwhelmingly Mexican. Their equipment
includes UH-1H transport helicopters leased from the United
States and Citation II tracker aircraft. The DEA and the United
States military supply radar intelligence. The success of the air
interdiction operation has forced traffickers to depend more
on drugs delivered by sea or hidden in vehicles. In 1994 the


Mexico: A Country Study

Northern Border Response Force seized 22 tons of cocaine,
about half of the amount seized in 1993.

Suffer drug trafficking penalties have been introduced in
the Federal Penal Code, a Law covering asset seizures has been
passed, and laundering operations through domestic or for-
eign banks have been made more difficult. Few major traffick-
ers have been arrested, however. Although corruption remains
a persistent problem, some limited success has been achieved
in prosecuting public officials — who face twenty-five- to forty-
vear sentences — for drug-related crimes. The murder of Cardi-
nal Juan Jesus Posadas Ocampo in a shoot-out among drug traf-
fickers near the Guadalajara airport in 1993 brought public
outrage. Whether Cardinal Posadas was a target of the attack or
was shot accidentally was not clear. Many were arrested, includ-
ing a number of federal and state police. Other gunmen, how-
ever, were able to escape aboard a departing scheduled aircraft,
and the failure of police to capture the gunmen suggested col-

Although laws on money transfers have been tightened, it
remains relatively simple to disguise the source of drug money
bv making cash transactions in currency exchange houses
along the United States border. Mexican drug cartels have little
difficulty converting their profits into legitimate business oper-
ations and real estate. Mexico also plays a critical role in the
supply of precursor chemicals needed bv South American pro-
ducers of cocaine and heroin. Most chemicals can be pur-
chased in Mexico and can transit Mexican ports without
detection bv Mexican customs.

Sensitivities over what Mexico views as United States pres-
sures on its sovereignty have hampered cooperation over drug
interdiction. The 19S5 kidnapping and murder of DEA agent
Enrique Camarena caused lingering tension, in part because of
evidence of complicity bv Mexican security forces linked with
the drug trade. In 1990 bounty hunters hired by the DEA cap-
tured a Mexican doctor believed to have participated in the
torture of Camarena. He was spirited to the United States for
trial, and his conviction in a United States court was upheld by
the United States Supreme Court despite Mexican protests
over what it viewed as violations of Mexican sovereignty and
international law. Mexico’s indignation over the United States
action resulted in a revision of the rules under which the DEA
operates in Mexico.


National Security

Security Concerns for the 1 990s and Beyond

Since the EZLN uprising in Chiapas began in 1994, the Mex-
ican armed forces have assumed a much higher profile. The
reluctance of the armed forces and Zapatistas to engage in full-
scale hostilities, the relatively low number of casualties in the
uprising, and the idiosyncrasies of Mexico’s “revolutionary”
political culture suggest, however, that the Chiapas conflict will
not necessarily replicate the violent pattern of the Central
American guerrilla wars of the 1970s and 1980s.

Analysts predict that the Mexican armed forces will continue
a prominent role in narcotics interdiction efforts, as the Mexi-
can drug cartels, bolstered by their links to international orga-
nized crime, attempt to consolidate their territorial power and
undermine state authority. Observers also expect that the Mex-
ican navy will assume a more prominent role in protecting
Mexico’s EEZ and combatting illegal immigration and smug-
gling. For the foreseeable future, Mexico will continue to rely
on the United States hemispheric defense umbrella for its
external security needs.

* * *

A concise history of the Mexican armed forces and an over-
view of the service branches as of the mid-1980s can be found
in the section on Mexico by Adrian J. English in Armed Forces of
Latin America. Edwin Lieuwen’s Mexican Militarism is a full study
of the modern military during its formative period. The Modern
Mexican Military, edited by David Ronfeldt, includes contribu-
tions by several authorities on the national defense system.
Georges Fauriol’s article, “Mexico: In a Superpower’s Shadow,”
treats what Mexico considers as its security threats and weighs
its military capabilities.

Adolfo Aguilar Zinser appraises the attitude of Mexican mili-
tary officers toward civilian society and politics as of 1990 in
“Civil-Military Relations in Mexico.” Generals in the Palacio by
Roderic A. Camp and an article by William S. Ackroyd, “Mili-
tary Professionalism, Education, and Political Behavior in
Mexico,” examine the important role of the military training
and education system.

Little up-to-date material has been published on the organi-
zational structure and operational capabilities of the Mexican
armed forces. Rene Luria’s brief survey in 1992, “Defense Pol-


Mexico: A Country Study

icy and the Armed Forces of Mexico,” summarizes some
aspects, although more recent developments are not included.
Discussion in this chapter of military units, personnel
strengths, and weapons systems is based in part on The Military
Balance, produced annually by the International Institute for
Strategic Studies in London. (For further information and
complete citations, see Bibliography.)




1 Metric Conversion Coefficients and Factors

2 Total Population and Population Density by State, 1990

3 Crude Death Rate, Selected Years, 1900-90

4 School Enrollment by Education Level, 1970-71, 1980-81,

and 1990-91

5 Vital Demographic Statistics, Selected Years, 1980-92

6 Infant Mortality Rate, Selected Years, 1930-90

7 Selected Economic Indicators, 1988-95

8 Production of Selected Crops, 1988-90

9 Selected Statistics for Hydrocarbon Production, 1996

10 Production of Selected Minerals, 1989-91

11 Selected Trade Indicators, 1991-95

12 Major Trading Partners, 1993 and 1994

13 Major Army Equipment, 1996

14 Major Air Force Equipment, 1996

15 Major Naval Equipment, 1996



Table 1. Metric Conversion Coefficients and Factors

When you know Multiply by To find
















Square kilometers


square miles

Cubic meters


cubic feet






Metric tons


long tons


short tons



Degrees Celsius (Centigrade)


degrees Fahrenheit

and add 32


Mexico: A Country Study

Table 2. Total Population and Population Density by State, 1990


Total Population

Inhabitants per

(in thousands)

Square Kilometer



Baja California Norte



Baja California Sur












































Nuevo Leon











Quintana Roo



San Luis Potosi







1, 822





















These figures differ somewhat from those in the Mexican government’s 1990 census.

Source: Based on information from Germany, Statistisches Bundesamt, Ldnderbericht
Mexiko, 1992, Wiesbaden, 1992, 31.



Table 3. Crude Death Rate, Selected Years, 1900-90


Crude Death Rate

1900-04 34.5

1905-10 33.2

1911-23 2 n.a. 3

1930-34 25.6

1940 23.4

1950 16.1

1960 11.5

1970 10.1

1980 7.5

1990 5.2

1 Number per thousand residents.

2 Statistics not available for 191 1-23 because of Mexican Revolution.

3 n.a. — not available.

Source: Based on information from Vicente Sanchez, Margarita Castillejos, and Lenora
Rojas Bracho, Poblacion, recursos y medio ambiente en Mexico, Mexico City, 1989,

36; and Mexico, National Institute of Statistics, Geography, and Informatics,
Mexico Today, Aguascalientes, 1992, 23.

Table 4. School Enrollment by Education Level, 1970-71, 1980-81,

and 1990-91
(in thousands)

Education Level




Primary schools 9,248 14,666 14,622

Middle schools and high schools 1,108 4,042 6,034

Vocational high schools 182 492 1,018

Teachers’ high schools 53 208 121

Universities and colleges 248 930 1.314 1

1 Figure for 1989-90 school year.

Source: Based on information from Germany, Statistisches Bundesamt, Ldnderbericht
Mexiko, 1992, Wiesbaden, 1992, 44.


Mexico: A Country Study

Table 5. Vital Demographic Statistics, Selected Years, 1980-92

1980 1984 1988 1992

Life expectancy 1 66 68 69 70

Males 1 63 65 66 67

Females 1 69 71 73 74

Births 2 2,428 2,512 2,622 2,726

Deaths 2 434 411 413 421

In years.

2 Registered, in thousands.

Source: Based on information from Germany, Statistisches Bundesamt, Ldnderbericht
Mexiko, 1992, Wiesbaden, 1992, 38.

Table 6. Infant Mortality Rate, Selected Years, 1930-90

Year Infant Mortality Rate

1930 145.6

1940 125.7

1950 96.2

1960 74.2

1970 68.5

1980 38.8

1990 40.0

Number per thousand registered live births.

Source: Based on information from Octavio Mojarro, Juan Garcia, and Jose Garcia,
“Mortality,” in Jorge Martinez Manautou, ed., The Demographic Revolution in
Mexico, 1970-1980, Mexico City, 1982, 378; and XI Censo General dePoblaciony
Vivienda, 1990, “Mortalidad Infantil en Mexico, 1990. Estimaciones Por
Entidad Federativa y Municipio” (
distica/documentos/censos/ censos.html #OCHO).



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Mexico: A Country Study

Table 8. Production of Selected Crops, 1988-90

Crop 1988 1989 1990


Cocoa 57 50 36

Coffee 300 343 296


Apples 507 499 310

Avocados 335 320 320

Bananas 1,566 1,185 1,165

Coconuts 1,159 1,057 1,002

Grapefruit 105 100 118

Grapes 563 489 506

Lemons 660 727 463

Mangoes 780 790 800

Melons 826 875 880

Oranges 2,099 1,166 1,558

Papayas 630 640 650

Peaches 265 265 265

Pineapples 248 324 328

Tangerines 151 169 198

Barley 350 433 521

Corn 10,600 10,945 14,639

Oats 100 105 105

Rice 456 637 357

Wheat 3,665 4,374 3,880


Beans 857 586 1,247

Chickpeas 150 120 170

Soybeans 226 992 512

Vege tables

Peppers 654 570 590

Tomatoes 1,980 1,889 1,646

Source: Based on information from Germany, Statistisches Bundesamt, Landerbericht
Mexiko, 1992, Wiesbaden, 1992, 81.



Table 9. Selected Statistics for Hydrocarbon Production, 1996


Natural Gas 2

Proven reserves 49,775,000 68,413

Production (per day) 2,686 s 1,358

Refining (per day) 1,520 3.7

1 In thousands of barrels.

2 In billions of cubic feet.

3 1995 (estimated) .

Source: Based on information from Jim West, ed., International Petroleum Encyclopedia,
1996, Tulsa, 1996, 241, 280, 281, 312.

Table 10. Production of Selected Minerals, 1989-91






Metallic minerals







Iron ore






Nonmetallic minerals







Source: Based on information from Germany, Statistisches Bundesamt, Landerbericht
Mexiko, 1992, Wiesbaden, 1992, 84.

thousands of tons
















thousands of tons








thousands of tons




thousands of tons




thousands of tons








thousands of tons




thousands of tons




thousands of tons




millions of tons




thousands of tons




thousands of tons




thousands of tons




thousands of tons





Mexico: A Country Study

Table 11. Selected Trade Indicators, 1991-95
(in billions of United States dollars)

Trade Indicator






Exports 1






Imports 1






Current account balance 2 ….






Free on board.

Includes transfers of emigre worker remittances and nonmerchandise transfers (services).

Source: Based on information from Economist Intelligence Unit, Country Report: Mexico [London], No. 1, 1996, 3.

Table 12. Major Trading Partners, 1993 and 1994
(in millions of United States dollars)

Country 1993 1994


Brazil : . v*- . 291 380

Canada 1,558 1,534

France 446 519

Germany 426 406

Japan 704 997

Spain 877 858

United States 42,838 52,787


Brazil 1,201 1,207

Canada 1,175 1,627

France 1,106 1,530

Germany 2,852 3,210

Japan 3,929 4,805

Spain 1,115 1,389

United States 45,317 55,468

Source: Based on information from Economist Intelligence Unit, Country Report: Mexico
[London], No. 1, 1996, Appendix 3.



Table 13. Major Army Equipment, 1996

Type and Description

Country of Origin Number in Inventory

Armored reconnaissance vehicles

M-8 United States 50

ERC-90 Lynx France 120

VBLM-11 France 40

DN-3/-5 Caballo Mexico 70

MOWAG Germany 30

Mex-1 Mexico 20

Mac-1 n.a. 1 15

Armored personnel carriers

HWK-11 Germany 40

M-3 halftrack United States 30

VCR-TT France 40

DN-4 Caballo Mexico 40

AMX-VCI United States 40

BDX n.a. 18

LAV-150 ST Belgium 26

Towed artillery

M-l 16 pack, 75mm United States 18

M-2A1/M-3, 105mm United States 16

M-101, 105mm United States 60

M-56, 105mm United States 24

Self-propelled artillery

M-8, 75mm United States 5


81mm United States 1,500

Brandt 120mm France 20

Antitank guided weapons

Milan (eight mounted on VBL M-ll) France n.a.

Antitank guns

M-30, 37mm United States 30

Air defense guns

M-55, 12.7mm United States 40

Surface-to-air missiles

RBS-70 Sweden n.a.

1 n.a. — not available.

Source: Based on information from International Institute for Strategic Studies, The

Military Balance, 1996-1997, London, 1996, 226.


Mexico: A Country Study

Table 14. Major Air Force Equipment, 1996

Type and Description

Country of Origin Number in Inventory

Fighter aircraft

F-5 (8 F-5E, 2 F-5F) United States


PG-7 Pilatus Switzerland

AT-33 Lockheed Shooting Star United States


Rockwell Commander 500C United States

SA2-37A France

Search-and-air rescue

1A1-201 Arava Israel

Armed helicopters

Bell 205 (5); 206 (5); 212 (15) United States

Utility helicopters

Bell 205 (4); 206 (12); 212 (15);UH-60 (2);

5-70A (4) United States

SA-330 Puma France


Various, including C-47 (12); C-118 (10);
C-130A (9); DC-6 (5); BN-2 (2); C-54
(l);F-27 (2) various




Note: Presidential transport fleet and training aircraft not included.

Source: Based on information from International Institute for Strategic Studies, Tht
Military Balance, 1996-1997, London, 1996, 227.



Table 15. Major Naval Equipment, 1996

Type and Description

Country of

Commissioned or

Number in


Gearing-class, ASROC launcher,

4 127mm (5in) guns United States 1982 2

Fletcher-class, 5 127mm guns,

Bofors 400mm air defense United States 1970 1



Br onste in-class, ASROC launcher,

ASRR, 76mm guns n.a. 1 n.a. 2

Offshore patrol vessels

Holzinger-class with Bo-105

helicopters Mexico 1991-93 4

Uribe-class (Spanish Halcon) with

Bo-105 helicopters Spain 1982-83 6

Guanajuato, 2 102mm guns Spain 1926 1

Auk-class 3in gun, 4 Bofors 40mm

air defense guns United States 1973 16

Admirable-class, 3in gun, 2 Bofors

40mm air defense guns United States 1943^14 12

Inshore patrol boats

Azteca-class, 1 Bofors 40mm air Britain/ 1974-77;

defense gun Mexico modernized 1987 31

Cape-class United States 1990-91 3

Point-class United States 1991 2

Polimar-class Mexico 1962-68 8


511-class United States n.a. 2

Naval aircraft

Bo-105 helicopter Germany n.a. 12

Casa C-212Aviocar (maritime

reconnaissance) Spain n.a. 9

HU-16 helicopter (search-and-

air rescue) United States n.a. 6

1 n.a. — not available.

Source: Based on information from Richard Sharpe, ed. , Jane’s Fighting Ships, 1993-94,
Alexandria, Virginia, 1993, 415-23, and International Institute for Strategic
Studies, The Military Balance, 1996-97, London, 1996, 226.



Chapter 1

Aguilar Zinser, A. “Mexico: The Presidential Problem,” Foreign

Policy, 69, Winter 1987-88, 40-60.
Aiton, Arthur S. Antonio de Mendoza, First Viceroy of New Spain.

Durham: Duke University Press, 1927.
Alba, Victor. The Mexicans: The Making of a Nation. New York:

Praeger, 1967.

Aldrich, Daniel G., Jr., and Lorenzo Meyer, eds. Mexico and the

United States: Neighbors in Crisis. San Bernardino, California:

Borgo Press, 1993.
Anna, Timothy. “The Last Viceroys of New Spain and Peru: An

Appraisal,” American Historical Review, 81, No. 1, February

1976, 38-65.

Arredondo Muhozledo, Benjamin. Breve historia de la revolucion
mexicana. 8th ed. Mexico City: Porrua Grupo Editorial, 1970.

Arredondo Muriozledo, Benjamin. Historia de la revolucion mexi-
cana. Mexico City: Porrua Grupo Editorial, 1971.

Bailey, John J. Governing Mexico: The Statecraft of Crisis Manage-
ment. New York: St. Martin’s Press, 1988.

Baird, Joseph H. The Churches of Mexico, 1530-1810. Berkeley:
University of California Press, 1962.

Bakewell, Peter J. Silver Mining and Society in Colonial Mexico:
Zacatecas, 1546-1700. Cambridge: Cambridge University
Press, 1971.

Bancroft, Hubert H. History of Mexico. 6 vols. San Francisco:
Bancroft, 1883.

Barth, Pius J. Franciscan Education and the Social Order in Spanish
North America, 1502-1821. Chicago: University of Chicago
Press, 1945.

Bazant, Jan S. A Concise History of Mexico: From Hidalgo to Carde-
nas, 1805-1940. Cambridge: Cambridge University Press,

Beals, Carleton. Porfirio Diaz. Philadelphia: Lippincott, 1932.
Benitez, Fernando. The Century after Cortes. Trans., Joan
McLean. Chicago: University of Chicago Press, 1965.


Mexico: A Country Study

Bemtez, Fernando. Ldzaro Cardenas y la revolution mexicana: El
cardenismo, 3. Mexico City: Fondo de Cultura Economica,

Bemtez, Fernando. Ldzaro Cardenas y la revolution mexicana: El
caudillismo, 2. Mexico City: Fondo de Cultura Economica,

Bemtez, Fernando. Ldzaro Cardenas y la revolution mexicana: El
porfirismo, 1. Mexico City: Fondo de Cultura Economica,

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