We explain what the "Mexican Miracle" was, the economic model of stabilizing development that made it possible and its objectives.
What was the "Mexican Miracle"?
An economic model used in Mexico between 1954 and 1970 is known as "Mexican Miracle" or as stabilizing development. It aspired to achieve an economic stability that would allow a developing sustainable and continuous. It was carried out during the presidencies of Adolfo Ruiz Cortines (1952-1958), Adolfo López Mateos (1958-1964) and Gustavo Díaz Ordaz (1964-1970).
They were measures of character liberal under the premise that generating greater wealth would be more beneficial for the population than state welfare. It coincided with the transit of the society mexican rural towards a more modern and industrialized one.
The economic philosophy of the "Mexican Miracle" consisted in the elimination of economic limits such as inflation, devaluations or the deficit in the balance of payments. Thus, a stability was achieved macroeconomic and continued economic growth, at the expense of investment in social welfare.
Thus, the 18 years of stabilizing development were characterized by sustained economic growth of 6.6% per year, with an inflation of 2.2%. This in part due to the replacement of the agricultural production traditional by modern industrial production, as a result of the expansion of the domestic market, urban and agrarian reform.
Investment in the infrastructure communications and in the energy sector: the company of electricity and a state company was created, awarding the employee a part of the Profits to present the business.
The interesting thing about the Mexican Miracle was that it involved vast sectors of society in a common development project: the government guaranteed bankers, workers, businessmen and peasants high rates of cost effectiveness if they pledged to invest heavily in the country.
To do this, reducing the taxes and the promise of rescue of the bankrupt companies by the Condition were key measures.
Objectives of the Mexican Miracle
Stabilizing Development set out from the beginning to comply with:
- Raise the standard of living of the population, especially of the bottom of the pyramid: workers, peasants and the lower middle class.
- Sustainably increase national income and GDP.
- Diversify the economy as much as possible and as quickly as possible.
- Industrialize the country, emphasizing the industries basic.
- Promote protectionist policies of the economy, together with the liberalization of the domestic market.
End of the Mexican Miracle
The "Mexican Miracle" ended in 1970, despite advances during this historic period. Mexican society began to suffer high inflationary levels (with a ceiling of 18%), and industrial production reached a limit with the policy of import substitution.
When the existence of a social deficit was revealed, the State increased public spending and stagnated revenues. Thus the foundations were laid for the crisis 1976: a huge external debt, a contraction of the investment private and a devalued currency.