Mexican Economy

Linkages with the National Economy A persuasive argument can be made that the foreign-owned assembly services have not extended their benefits sufficiently to the rest of the Mexican economy. First, only a trivial percentage of the materials used in these operations is of Mexican origin. That percentage has hovered around 1.5 percent of the total use of components and supplies during the period from 1975 to 1983. In the plants in the interior... the use of domestic materials has been considerably greater, ranging from 4 to 15 percent of total materials used. Next, most of the jobs created are for unskilled workers. The labor force, therefore, receives little training.

Of course, the Mexican economy relies on the billions of dollars sent home by Mexicans who are, legally or illegally, in the U.S. But the Mexican government relies on it even more. Most Mexican illegals entering the U.S. are male. Most of them have families that they have left behind. In every case, they must pay steep and constant bribes to the mayor of their pueblo, as well as to the police chief, before they leave and while they are gone. If they do not, no one will protect their wives and children while they are gone from the universal government-approved plunder. So, in addition to the thousands of dollars the illegals must accumulate to pay the "coyotes" who bring them across the desert frontier, they must find additional thousands to pay the "officials" back home.

[W]ith the collapse of the Mexican economy in late 1994, just after Carlos Salinas left office, the brothers' world came crashing down. The peso crisis destroyed Carlos Salinas's economic reputation -- and he now lives in Ireland, which has no extradition treaty with Mexico.

The Mexican economy was expected to experience the greatest adjustments under the NAFTA, due to the small relative size of its economy and higher levels of protectionism. Lopez-Cordova (2001) reports Mexican