Global Production Networking and Technological Change in East Asia or Mexico

Global Production Networking and Technological Change in East Asia

Author: Shahid Yusuf

In the coming decades, East Asian economies must face the challenges of an increasingly globalized marketplace. This book explores the changing parameters of competition in East Asia, and argues that success ultimately will depend on the ability of the regions firms to harness the potential of global production networks and to build their own innovative capability. Presenting the latest findings on global production networks and the evolution of technological capabilities, it provides researchers, students, and policymakers with in-depth information and analysis on key issues related to growth and development in East Asia.

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Mexico: The Remaking of an Economy

Author: Nora Lustig

Today Mexico is viewed as a success story in the management of economic adjustment and structural reform. Inflation is under control, capital and foreign investment are returning, and output growth has increased. Mexico's recovery, however, has been neither fast nor smooth, and the social costs the country has borne for the past several years have been very large. In 1982, Mexico faced a severe balance-of-payments crisis. Rampant inflation, capital flight, and a collapse of economic activity were the consequences of an overexpansionist fiscal policy and adverse external conditions. For the next five years, the Mexican government struggled to restore stability and growth without success. Falling oil prices and lack of adequate external financing made these goals extremely difficult to achieve. With the implementation of the Economic Solidarity Pact, inflation was finally brought down in 1988. However, fiscal discipline and far-reaching reforms notwithstanding, growth did not follow. To convince investors to put their capital in Mexico required something more. Initiatives such as the reprivatization of the banking system and the pursuit of a free trade agreement with the United States finally produced the observed turnaround starting in 1990. In this book, Nora Lustig tells the story of adjustment and reform in Mexico from the onset of the debt crisis in 1982 through the early 1990s when the sweeping reforms began to bear fruit. The author looks closely at the social costs of adjustment and who bore the greatest share. In addition, she explores the characteristics of the new development strategy and analyzes the motivations and potential consequences of Mexico's search for greater economic integration with the United States.

Table of Contents:

	Abbreviations and Acronyms
	Introduction	1
	Mexico's Adjustment and Recovery: A Summary	2
	A Note on Method	12
1	The Genesis of the 1982 Crisis	14
	The Golden Years of "Stabilizing Development"	14
	Macroeconomic Imbalances and the 1976 Balance-of-Payments Crisis	17
	The Oil Boom and the Onset of the 1982 Crisis	20
	Concluding Remarks	26
2	From Crisis to Recovery	28
	The First Attempt at Stabilization, 1983-85	29
	The Failure of the First Stabilization Program	34
	From the 1986 Oil Shock to the 1987 Run on the Peso	39
	The Implementation of the Economic Solidarity Pact	50
	The Pursuit of Economic Recovery	55
	Concluding Remarks	59
3	The Social Costs of Adjustment	61
	Adjustment, Living Standards, and Income Distribution	61
	Living Conditions before the Crisis	65
	Trends in Earned Real Incomes since 1982	66
	Unemployment and Employment Patterns	75
	Social Income: The Evolution of Public Spending on Social Sectors	78
	Resource Availability in Education and Health	83
	Food Subsidies: From General to Targeted	86
	Social Indicators: Nutrition and Health, Education, and Incidence of Crime	87
	Household Survival Strategies	89
	Who Bore the Costs and to What Extent?	92
	Concluding Remarks	94
4	Public Sector Reforms	96
	Fiscal Policy Reform	98
	Divestiture of Public Enterprises	103
	Deregulation	107
	Concluding Remarks	112
5	Looking Outward: Reforms in the Foreign Trade and Investment Regimes	114
	Trade Liberalization	117
	Impact of Trade Liberalization on Economic Performance	120
	Industrial Programs	122
	The Changing Foreign Investment Regime	125
	Intellectual Property Rights	129
	Joining the General Agreement on Tariffs and Trade	130
	Seeking Closer Ties with the United States	132
	Concluding Remarks	137
	Epilogue	140
	Appendix: Agreement Signed by Mexico and Its Commercial Banks on Debt and Debt Service Reduction	141
	Notes	145
	Index	181