Mexico

SINCE THE 1940s, Mexico's overall economy has grown, in large part, because of significant oil reserves. Economists often referred to the period from the mid1950s to the mid-1970s as the “Mexican Miracle.” The country enjoyed sustained economic growth at between six and seven percent annually and inflation was generally low. Mexico reached the upper end of the World Bank's list of semi-industrialized, or middle-developed, countries. The nation has witnessed improvements in areas such as infant mortality, literacy rates, and life expectancy. There has also been growth of a large, urban middle class with relatively steady incomes and access to services such as healthcare and education. Overall, poverty in Mexico fell between 1950 and 1980.

Despite Mexico's overall economic growth, in terms of economic inequalities the country has fallen behind other Latin American countries that have paid more attention to equitable distribution of wealth. In the second half of the 20th century, there was a growing gap between rich and poor in Mexico. In 1950 the richest 30 percent of the population earned 60 percent of the country's total income, while the poorest 40 percent of Mexicans earned just 14 percent. By 1995 this income inequality had become more extreme, with the wealthiest 30 percent earning 77 percent of the country's income and the poorest 40 percent taking in a mere 11 percent.

Poverty and income inequality in Mexico became particularly acute during the so-called lost decade of the 1980s. Especially after the 1982 debt crisis, the gap between rich and poor widened in Mexico, as it did throughout Latin America. The neoliberal reforms of the Mexican government that began in the mid-1980s intensified the country's inequalities. Despite the promise of President Carlos Salinas, who was elected in 1988, to eradicate extreme poverty in Mexico, the unequal distribution of wealth proved difficult to alleviate.

In 1989, the Salinas government created the National Solidarity Program, known as Pronosal, to fight poverty. Pronosal claimed that without an effective income redistribution program, even with a sustained economic growth rate of three percent, it would still take 64 years to eliminate poverty for the poorest 10 percent of the Mexican population. Despite this awareness, uneven economic growth after the mid-1980s has prevented Mexico from reducing its poverty and inequality.

In addition to economic disparities between rich and poor, there are great regional inequalities between northern and southern Mexico and between the country's urban and rural areas. The north is generally much more prosperous than the south. Northern Mexico possesses large, modern farms that produce commercial crops for export. The geographic proximity of the United States greatly contributes to the economic success of the north. An extensive and well-maintained transportation network, the presence of large industrial cities such as Monterrey and Tijuana that provide jobs, and assembly plants called maquiladoras along the border all allow the north to enjoy a more prosperous economy.

In contrast, southern Mexico is home to many of the country's poor citizens. More densely populated and possessing poorer-quality land, the south is inhabited by many subsistence farmers. Transportation in the south is generally poorer than in the north, and is made worse by heavy rains and flooding. Most of Mexico's indigenous population lives in the south, where the government largely has ignored their needs and local bosses have exploited them.

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