The Mexican Peso Crisis

Given its approximation to the United States of America, and its consequential interaction with some of the most highly ranked economies in the world, the Mexican economy is ranked fifteenth in the world in formalized terms and eleventh in purchasing power. Since its low point when the government devalued the peso in relation to the American dollar during the Mexican peso crisis in 1994, the economy has improved fundamentally and reached an unprecedented era of stability (The Heritage Foundation). Since the crisis, the economy has maintained low, but positive rates of growth, externally indicating strength, but hiding the true injustices and problems facing the people and the country economically. The government finds itself challenged with

At $1.26 trillion, it is known as a middle economy, a shade shy of being a G7 economy. Based off of GDP per capita, Mexico’s $16,000 ranks it in similar ranges of Brazil, Turkey, and Romania (Vanham 1). Though this still falls far short of the larger and better economies like the United States of America, there is still hope as Mexico’s economy continues to steadily rise at a rate of about 3.3-3.6% every year, having its last major economic disaster in 1994 during the aforementioned Peso crisis (The Heritage Foundation). Pena Nieto’s cycle of power has done its best to complete wat many have called an “ambitious reform agenda” in an attempt to liberalize many aspects of tax, electric, and telecommunication sectors. Interestingly enough, the country seen as a manufacturing giant has the largest silver resources in the world and is tenth in oil reserves. PEMEX, the national oil company is one of the largest in the world, competing with other oil giants such as those in the Middle East. But as manufacturing goes, Mexico still finds itself in the middle of many very profitable trades. Recently large car companies like Ford and GM have increased production there, building a strong relationship with United States trade (Vanham 2). This relationship, thanks to the NAFTA, mostly comprises of manufactured and industrial goods, but more importantly has led to the Mexican holding of

Moves like NAFTA, privatization, and the continued nationalization of PEMEX have greatly helped Mexico. The citizen response has been a bit different. There has been a great initiative for business, which could be the people putting the disparity issue into their own hands and making themselves available for the business that Mexico has recently attracted. From the Chiapas movement in Oaxaca to the election of a more pro-business government, the people have had a relatively positive response to one of the biggest driving forces in the world today (Flannery