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Authored by Dr. Donald E. Schulz.
This is the first of a two-part report on the causes and nature of the crisis in Mexico, the prospects for the future, and the implications for the United States. In this initial study, the author analyzes the crisis as it has developed over the past decade-and-a-half, with the primary focus being on the 6-year term of President Carlos Salinas de Gortari and the first few months of his successor, President Ernesto Zedillo Ponce de Leon. Contrasting the euphoric hopes generated by the North American Free Trade Agreement (NAFTA) with the explosive events of 1994 and early 1995, he explains how a country with such seemingly bright prospects went so wrong. He argues that the United States has few foreign policy concerns more profoundly consequential for its national interests including its security interests than the political stability and general welfare of Mexico. For that reason, it is especially important that we understand what has happened and why. Dr. Schulz s preliminary findings are sobering. Despite some promising moves by the new administration with regard to judicial and police reform and a more cooperative approach to the political opposition, he questions President Zedillo's willingness to challenge the Partido Revolucionario Institutional (PRI) elite and the narcotraffickers. The fundamental problem, he suggests, is that Mexico s political economy is dominated by an oligarchy that has grown accustomed to borrowing from foreigners to enrich itself. If he is correct, then there is likely to be trouble ahead, for the current bailout will only perpetuate the system, virtually assuring that there will be another crisis down the road.
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