the Impact on Mexico of NAFTA and the Structural Adjustment/Austerity
Measures Intensified after the December, 1994 Crash
of the Peso
- Between 1994 and 1995 sales of
major wholesalers dropped by 75%.
- Food production fell by 80%.
- Basic food prices rose faster than
overall prices (by 43% in the first 7 months of
- While cutting back on services
and subsidies for the poor and taxing them more,
the government increased subsidies for the rich.
In 1995 it spent 13 billion (5% of the GDP) to bail
out commercial banks, and 2 billion to assist private
road-building contractors (who put tolls so high
that few can afford to use the highways they built).
- Over 60% of all Mexican businesses
reduced their workers, and 1/3 of businesses have
- In the first 9 months of 1995,
over 2 million people fell into extreme poverty.
Today over 40% of population lives in poverty.
- Mexico's foreign debt has swollen
to suffocating size. Interest payments in the first
half of 1996 were almost $18 billion, nearly double
that in the first half of 1994.
- Since December, 1994 the average
wage lost 54% of its purchasing power.
- During 1995, between 1 and 2 million
more workers became unemployed, raising total unemployment
to 10 million (26% of the active workforce).
- In 1996, the President's "secret
budget item" (a discretionary fund for which he
does not have to account) was raised to US$85 million
-- 30% higher than the year before.
- In response to growing poverty,
crime has escalated. In response, Congress legalized
gun ownership by private citizens. Gun-related violence,
already extremely high, is predicted to increase.