Summary of 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 1995).

• 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 closed down.

• 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.