384 UNIT 3 MODERN MESOAMERICA
commodity in the New World, and that they were many thousands of miles closer to
the world’s biggest market, the United States, than any of the African, Russian, or
Middle Eastern producers. With this trump card, and with the encouragement of
IMF, Mexico borrowed in the early 1980s many billions of dollars against its petro-
leum collateral. The oil price bubble burst in a few years, and Mexico was faced with
a massive debt crisis, which led to a U.S.-sponsored emergency bailout loan in 1995.
Both the impetus to get into debt and the hardship of getting out of debt were ex-
acerbated by foreign financial and political intervention.
Second, in response to the initial conditions for massive foreign investment in
the 1970s and 1980s, and as a condition for getting the North American Free Trade
Agreement (NAFTA) approved by the U.S. Congress (pre-1994), and yet again as a
condition for the bailout loan from the United States in 1995, Mexico was forced to
privatize many of its state-owned industries, utilities, and financial institutions. Most
important as a background to the Mayan Zapatista Movement, Mexico was forced to
abandon its highly successful agrarian reform program—begun in the 1930s—
whereby hundreds of thousands of landless peasants received state-subsidized grants
of surplus and expropriated land (given and administered as ejidos) for their own
subsistence (on the ejidos, see Chapter 8). These grants were inalienable (i.e., they
could not be sold) and could be passed only to family heirs. Not only was this pro-
gram cancelled as a condition for United States Congress’s approval of NAFTA, but
also waiting lists for land grants were annulled, and existing ejidoswere authorized,
even encouraged, to sell their land on the private market. The result? Some windfall
profits from land sale, but, mostly, despair and out-migration.
A third parallel with the process that we have observed in South America in-
volved the elimination of state-sponsored subsidies, credits, and market price controls
for the production of agricultural commodities. This policy was of course aimed at
opening up Mexican markets to the sale of U.S. commodities. It had the “rational”
effect of driving out marginal peasant producers, who no longer had either guaran-
teed market prices for their own products or subsidized cheap prices for staples that
they did not produce. The result of this rural impoverishment was social instability
and out-migration to marginal areas (such as the Lacandon jungle, cradle of Za-
patismo), cities, and, by the millions, to the United States, in search of what Mexico
could no longer provide.
Fourth, even as “new wealth” was being created by these policies, it was not re-
distributed to the urban and rural poor via state-sponsored social and economic ser-
vices; rather, it was invested in industry, transportation, infrastructure, and
agribusiness, all of which tended to be in the hands of elites who lived in urban areas
or in the developed intensive agricultural production areas of central and northern
Mexico. The trickle-down effect generally did not reach the poor, rural south, which
is home to the majority of Mexico’s indigenous communities. In the decades that
we are considering, these policies led to massive unemployment, impoverishment,
and population displacement.
Finally, as commodities such as coffee and corn reached their “natural” export
price in the world market, small producers could not compete, and they either sold