History, Economic Crisis
Jose Lopez Portillo, Lopez Portillo, Pemex, immediate successor, independent foreign policy
In 1976 widespread voter apathy resulted in the PRI candidate, Jose Lopez Portillo, being elected without opposition. A former finance minister, Lopez Portillo followed a program of economic austerity after taking office. He called on workers to reduce wage demands and asked businesspeople to hold down prices and to increase investment expenditures. In foreign affairs, Lopez Portillo improved ties with the United States. A brief period of euphoria occurred when Mexico discovered vast oil reserves in 1974 and 1975 in the states of Campeche, Chiapas, Tabasco, and Veracruz. Oil production more than doubled during the latter half of the 1970s, and this economic strength allowed Mexico to adopt a more independent foreign policy, especially regarding the United States. But the promise of wealth from oil revenues led to reckless government spending, corruption, and a staggering foreign debt. Mexico borrowed billions of dollars at high interest rates in anticipation of increased oil revenues. When oil prices dropped sharply in the early 1980s, Mexico’s income from petroleum production dropped as well. The nation soon faced a severe economic recession and an enormous foreign debt. Mexico announced that it was postponing payments on its foreign debt, causing international banks to rethink their policy of providing large loans to developing countries. The United States government alleviated the situation somewhat by agreeing to buy oil and gas at a price that was higher than what Mexico would have been able to get on the world market.
Both Lopez Portillo and his immediate successor, Miguel de la Madrid Hurtado (1982-1988), favored technocrats (technical experts) over politicians when filling political appointments. Graduates from Yale, Harvard, and other foreign universities staffed the Mexican government. Under de la Madrid, the nation tried to stabilize its economy by renegotiating its large foreign debt. Mexico accepted a bailout loan of $4 billion from the International Monetary Fund (IMF), on the condition that the Mexican government raise taxes, cut public spending, and limit imports. De la Madrid also launched another campaign against government corruption, which was often linked to drug traffickers. Narcotics generated vast amounts of money, which drug traffickers used to bribe police, the army, and government officials. Several high-ranking government officials—including a senator who was the former head of the state-owned oil company, Pemex—were jailed and charged with fraud during this campaign.
Perceived mismanagement and corruption strengthened the appeal of opposition political parties in Mexico. The inability of the state to deal with significant problems, including the aftermath of a major earthquake in Mexico City in 1985, angered the country’s citizens and increased criticism of the PRI government. Many Mexicans were increasingly skeptical of a political process they believed was rigged and elections they felt were fixed. Although opposition parties were allowed to function and participate in national elections, the PRI’s control of the government and its vast resources ensured that the party was always able to mobilize enough voters to win. In many instances, citizens were paid to go to the ballots and vote for the PRI, or local PRI officials threatened small business owners with harassment and retaliation of they did not vote for the PRI.
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