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Dictatorship and the Neoliberal Markets - Essay Example

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The process eliminates any barriers to trade, which include tariffs. This leads to the creation of a market economy that favors businesspersons and investors. Many advantages can be drawn from neoliberalism,…
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Dictatorship and the Neoliberal Markets
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Dictatorship and the Neoliberal Markets

Download file to see previous pages... More to this, social programs in the country have been abandoned, and most of the industries run by government previously have been privatized. The ejido lands in Mexico, which refer to land given to the community, or a group of people, under the agrarian reform have also been taken over.
Neoliberalism in Mexico can be traced back to the Mexican crisis of 1982. The country, under the leadership of President Jose Luis Portillo (1976-1982) borrowed heavily from external sources, with an intention of investing in railways, nuclear power, oil pipelines, freeways, and the steel industry. The borrowings were done against the oil revenues of the country, given that previous years had shown a constant increase in the oil prices. However, the prices of oil began to deteriorate in 1982, due to overproduction, and OPEC price cuts. More to these, world interest rates increased, followed by devaluation in the Mexican peso, leading to a financial crisis in Mexico. Following these events, a debt moratorium was declared in 1982. These compelled the country to accept worldwide support from the World Bank, International Monetary Fund, the US Federal reserve, and the US department of the treasury. However, they offered conditional support, which required Mexico to adopt neoliberal policies (Thomas, James, William, & Browning-Akien, 4).
Adoption of neoliberal policies required the Mexican government to cut on its spending. This led to a reduction in the subsidies given to members of the country to promote production. Consequently, the farmers faced difficulties in production, which worsened their economic ability. More to this, reduced government spending decreased the resources allocated to important sectors of the economy. These include the health sector, education, and welfare sectors. Consequently, the rates of unemployment increased, thus making Mexicans poorer. Accessing health and education services became problematic, hence ...Download file to see next pagesRead More
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