WHAT WAS THE MEXICAN STABILIZING DEVELOPMENT? - HISTORY - 2025

The Mexican stabilizing development refers to the development strategy created in Mexico that produced the sustained growth of the Mexican economy since the late 40s to late 70s.

The Mexican stabilizing development strategy produced economic growth of 3 to 4% and 3% annual inflation in all the years it was implemented.

Mexico City, 1948.

In fact, from 1940 to 1981, Mexico's Gross Domestic Product grew at an average rate of 61% per year.

The reduction of the political crisis that accompanied the national elections during and immediately after the Mexican Revolution was an important factor in laying the foundations for economic growth.

During the presidency of Lázaro Cárdenas, significant policies were established in the social and political spheres that had great impacts on the economic police throughout the country.

The Mexican government promoted industrial expansion through public investment in infrastructure, agriculture, energy, and transportation.

Growth was sustained by Mexico's growing commitment to provide quality education options for its general population.

Mexico benefited substantially from World War II, thanks to its participation in providing materials and labor to the Allies.

In the years following World War II, President Miguel Alemán Valdés imposed a large-scale import substitution program that boosted performance by increasing domestic demand.

Historical background

President Lázaro Cárdenas began a policy process to improve the economy, including land distribution and national modernization.

Some reforms carried out during this period include the nationalization of oil in 1938 and the nationalization of the Mexican railways. But probably his most important reform was the Land Reform.

In the Land Reform, farmers received more than 100 million hectares of land. Here, more than 30,000 ejidos (communal land properties) and communities with more than 3 million heads of households were established.

The automotive manufacturing industry was, and continues to be, one of the fastest growing sectors of the Mexican economy.

From 1925 to 1938, major automobile companies such as Ford, General Motors, and Chrysler opened factories in Mexico. The country became the first Latin American country capable of attracting investment from large car makers by the 1930s.

This situation, along with new infrastructure, economic stability and national reconstruction were key to increasing the growth of the Mexican economy; beginning with the Mexican stabilizing development under President Ávila Camacho in 1940.

Camacho started an industrialization program famous for beginning the import substitution process within Mexico.

Then in 1946, President Miguel Alemán Valdés imposed the Law for the development of new and necessary industries, continuing the trend of "inward" development strategies.

Growth was sustained by increased commitment to primary education for its general population. Enrollment in primary education increased significantly from the 1920s to the 1940s, making economic performance more productive in the 1940s.

Mexico also made investments in high degrees of education during this period; This sparked a generation of scientists and engineers who could enable new levels of industrial innovation.

For example, the National Polytechnic Institute and the Monterrey Institute of Technology and Higher Education were founded.

Mexican stabilizing development

Mexico benefited substantially from the Second World War as it supplied human labor and materials to the allied countries.

By the end of the war, many changes were occurring within Mexico, all aspects were growing: the economy, the industries, the cities, the jobs, and the quality of life.

Stabilizing development goals

They wanted to increase the standard of living of the population, especially those of farmers, workers and special sections of the middle class. At the same time, they wanted to continue increasing national growth.

Another of the main objectives was to accelerate the diversification of productive activities in the economy; and advance the industrialization process giving preference to basic industries. Generally, they also sought to achieve a more balanced regional development.

Measures taken by Mexico

To achieve its objectives, various measures were taken. The peso was devalued in 1954, with a new parity of 12.50 pesos per dollar. Credits to the private sector were also increased and protectionist policies were promoted.

Policies were implemented that demanded little or no foreign investment; in other words, the "Mexicanization" of the industry.

The production of intermediate goods and the increase in the production of capital goods were strongly promoted. The development of companies without external competitiveness was a condition that contributed to the social development of the post-revolutionary period in Mexico.

The Bracero Program

It was a series of laws and diplomatic agreements executed in 1942. The idea was that human rights and a minimum wage of at least $ 0.30 an hour were guaranteed for temporary workers who worked in the United States.

The braceros (manual worker) were expected to fill the human capital gap in agriculture given their conscription.

This program lasted even after the war and offered employment contracts to some 5 million people. It became the largest foreign worker program in American history.

Mexico also received payments for their contributions of materials used in the war effort, which they injected into their Treasury with reserves. With these robust resources, Mexico was able to embark on large infrastructure projects after the war.

Import substitution industrialization

This economic and trade policy promoted the replacement of foreign imports with domestic production.

President Alemán Valdés imposed a full-scale import substitution program that boosted performance by increasing domestic demand.

The country's economic stability, the increasingly educated workforce, and the savings from the war, provided excellent conditions to begin an import-substitution industrialization program.

The government increased import controls on consumer goods, but relaxed them on capital goods such as machinery.

Capital goods were then bought using international reserves accumulated during the war and used to produce goods domestically.

The textile production industry became incredibly successful. Mexico became a desirable location for foreign transnationals such as Coca-Cola, Pepsi Cola, and Sears.

Industrial expansion was promoted through public investment in agriculture, energy and transportation.

The great economic growth continued in the 1960s. Manufacturing continued to be the dominant sector; by 1970 Mexico diversified its export base and became highly self-sufficient in food crops, iron, and most goods.

References

1. The mexican enonomic miracle. Recovered from boundless.com
2. The mexican miracle (2015). Recovered from prezi.com
3. Bracero program. Recovered from boundless.com
4. Mexican miracle. Recovered from wikipedia.org.