The Economy

printer iconPrintemail iconEmailfavorites iconSave to Favorites

Postrevolutionary National Gains

By many measures, Mexico’s 20th-century revolution appears to have succeeded. Since 1910, illiteracy has plunged from 80 percent to 10 percent; life expectancy has risen from 30 years to nearly 70; infant mortality has dropped from a whopping 40 percent to about 2 percent; and, in terms of caloric intake, most Mexicans are eating about twice as much as their turn-of-the-century forebears.

Decades of near-continuous economic growth account for rising Mexican living standards. The Mexican economy rebounded from its 1982 and 1995 recessions and has recovered, although only modestly, from its 2001–2002 recession, because of its plentiful natural resources; diversified manufacturing, such as cars, steel, and petrochemicals; steadily increasing tourism; exports of fruits, vegetables, and cattle; and its large, willing, low-wage workforce.

Mexican governments during the 1970s and 1980s skillfully exploited Mexico’s economic strengths. The Border Industrialization Program has led to millions of jobs in thousands of border maquiladora factories, from Tijuana to the mouth of the Río Grande. Foreign trade, a strong source for new Mexican jobs, has burgeoned since the 1980s, due to liberalized tariffs as Mexico joined the General Agreement on Tariffs and Trade (GATT) in 1986 and NAFTA in 1994. As a result, Mexico has become a net exporter of goods and services to the United States, its largest trading partner. Although Mexico suffered a peso collapse of about 50 percent (in relation to the U.S. dollar) in 1995, the Zedillo administration acted quickly. Belt-tightening measures brought foreign investment flowing back to Mexico by 1997 and annual inflation, which had initially surged, cooled down to around 6 or 7 percent during 2003.

But, during 2004 and 2005, despite high prices for its oil, rock-bottom inflation, large payments of money from Mexicans working in the United States, and a balanced budget, the Mexican economy still didn’t produce the million jobs a year it needed to keep up with population increase. Although some of the sluggishness could be blamed on the hurricane that devastated Cancún in fall 2005, most experts agree that Mexico’s largest economic problem is lack of ability to compete, especially with respect to Asian countries, especially China, which floods Mexico with low-cost goods, while Mexico sells very little to China in return. A serious marker of all this appeared in 2004, when China replaced Mexico as the United States’ second-largest import source, jumping to about 14 percent of U.S. imports, compared to Mexico, at around 10 percent.

Many economists suggest that Mexico, in order to breathe permanent new life into its economy, needs fundamental structural reforms, such as more flexible labor rules, more effective tax collection (hardly anyone pays any income tax), and the possibility of private investment to modernize the energy and oil industries.

The Oaxacan Economy

Despite huge gains, Mexico’s Revolution of 1910 is incomplete. In Oaxaca, it remains especially so. Oaxaca lags behind the rest of Mexico by many measures of economic success. Median income, for example, hovers at about half the national average. The year 2000 national census figures indicate that median daily earnings per active worker stood at about $3 for Oaxacans and about $6 for Mexicans in general. Such numbers demonstrate the difficult reality confronting the poorest Oaxacan families. When asked by 2000 census takers to categorize their incomes, a whopping 28 percent of Oaxacan active wage earners said they received no income. The next two higher categories, totaling about 20 percent (one in five) reported incomes of between zero and $2 and between $2 and $4 per day, respectively.

A look at more government figures provides clues as to who most of Oaxaca’s poor are. According to recent figures, agriculture—overwhelmingly corn farming, but also cattle, fruit, and fish—occupies about half of Oaxaca’s active workers, but accounts for only one-fifth of the value of Oaxaca’s yearly economic output. The remaining four-fifths is generated by the other half of Oaxaca’s workers who are, consequently, responsible for approximately four times as much production value as the farmers.

At the human level, the typical Oaxacan lives on a farm and is poor, even by Mexican standards. The typically six-member family, dad José, 36; mom María, 31; three kids, 2, 6, and 11; and grandma, 56; earn next to no cash income and must subsist on what they can produce and gather. This generally is limited to corn, squash, beans, eggs, garden vegetables, an occasional chicken or turkey, and maybe a little wild game. Staples that they don’t produce must be bought or bartered for at the village market. So once a week María bundles up some tomatoes, carrots, and potatoes from her garden and maybe one of her half dozen young roosters. With her middle child in tow, she walks the six miles uphill to the village. With luck, María will return by early evening, having sold or traded everything for perhaps a liter of cooking oil, a kilo of sugar, a spool of thread, and a yard or two of bright ribbon.

While María is at the market, José pulls weeds for a few hours in his milpa (cornfield). Although his acreage is small, perhaps no more than two or three acres, he usually manages two harvests of corn a year. In a good season, this might amount to two tons, as long as he keeps the mice and rats away from it. Every year he stores about a ton of corn for home consumption and sells the other ton for about $100 to Conasupo, the government commodity agency. If all goes well, he reckons, in three years he’ll save enough to replace his family’s present stick-and-adobe, dirt-floor house with a new, sturdy two-room concrete house with an interior water tap and a toilet.

Solving the Problems

Like José, many thousands of Oaxacan farmers must struggle to better their lot. The government is generally sympathetic to their efforts and recognizes that Oaxaca, with its plentiful sun and adequate (but sharply seasonal) rainfall, is a potential trove of grain, fruit, fiber, meat, and fish for the rest of the country and maybe even for export. But the problems are manifold. Although Oaxaca has expanses of rich land, especially in the Isthmus, the Papaloapan, and the central valley, about a fifth of Oaxaca’s land, especially in the Mixteca, is useless because of severe erosion. Another third is partly so. Before the conquest, much of Oaxaca’s farmland was terraced and irrigated, not unlike the millet terraces of Nepal and the rice terraces of Bali. Although Oaxacans largely lost that precious knowledge, it could be relearned, and the old water channels and hillside terraces (which are still visible at many locations) could be restored.

Meanwhile, on the present land, productivity could be greatly increased. To raise corn production from the current half ton per acre to the U.S. level of two tons per acre would require mechanization, fertilizer, an irrigation water supply, and the know-how to make everything come together. At present, however, only about one-fifth of Oaxaca’s farmers have access to a tractor (compared to 38 percent nationwide); very few have the money for fertilizer; only about 15 percent have access to irrigation water; and most have completed five years or less of schooling. Nevertheless, a focused, long-term government-to-people partnership, not unlike the Tennessee Valley Authority in the United States, could restore prosperity in the Oaxacan countryside.

One route to a better life for many Oaxacans has been to get out. Census figures indicate that about 40 percent of people born in Oaxaca are living and working in other parts of Mexico, the United States, or Canada. While Oaxacan people don’t want to leave home, lack of local jobs forces them to. Unlike northern Mexican states close to U.S. cities filled with people who want to buy Mexican-made shoes, telephones, mops, lamp fixtures, and bicycles, Oaxaca, in the far south, is surrounded by other equally disadvantaged Mexican states. Oaxaca, with few nearby markets, attracts only a dribble of new factories and consequently generates scant new jobs. If Oaxaca had oil or gold, the story would be much different.

Although emigration has slowed Oaxaca’s population growth in general, Oaxaca City is an exception. Country people seeking a better life started arriving in Oaxaca City in the 1940s when the population was about 40,000, and they’re still coming. Most estimates put Oaxaca City’s rising population at around 375,000. All the new neighbors make life more crowded for the average Oaxaca City family—parents with two or three children—who typically must manage on about $10 per day. The survival mode for many such city families has been enterprise: Mom takes in laundry or starts a neighborhood store on the front porch; Dad works one or two jobs; and both Mom and Dad sell taquitos out front on Saturday and Sunday nights. Oaxacans, like everyone, do what they must to get by.

Tourism

Partly because of their isolation and difficult economic circumstances, Oaxaca folks are in many ways like people of yesteryear. Unlike richer people in some parts of Mexico and much of the United States, Canada, and Europe, most Oaxacans have yet to join the headlong race into the future. And therein lies Oaxaca’s charm. The native women’s bright traditional costumes, the venerable, monumental buildings, the stick-and-adobe thatched houses, the vaqueros on horseback, the oxcarts, all of which symbolize backwardness and poverty in some eyes, are a sentimentally picturesque sight to increasing numbers of visitors, both domestic and foreign.

But as a visitor, please remember the reality behind Oaxaca’s charm. Please be tolerant, generous in your gratuities, and bargain gently. If you do, Oaxacans will welcome your presence and try even harder to make your visit worthwhile.

State and federal government planners years ago recognized Oaxaca tourism’s potential benefits. Their strategy, formulated in the late 1980s, is yielding results. While tourist visitations have burgeoned, Oaxaca City’s proud old monuments have been restored, the central plaza blooms with old Mexico charm, village-run tourist accommodations have sprouted in the countryside, and the coastal Bahías de Huatulco resort continues to grow gradually while retaining its precious tropical forest hinterland.

This is all good news if Oaxaca’s increasing tide of visitors doesn’t ruin the charm that they came to enjoy in the first place. Instead, let’s hope that Oaxaca’s culture and natural assets will be enriched because of their tourist value. If so, campesinos will preserve, rather than wipe out, the local wildlife because they realize that visitors come because of the wildlife. For the same reason, artisans will fashion more enticing handicrafts, people will continue to dress up and dance in their bright costumes, towns will build museums and conserve their old monuments, and archaeologists will restore crumbled cities to their original glory.

Buy Moon Travel Guides

Loading books
loading
For more Moon travel information, sign up for our monthly e-newsletter for updates on new travel guide releases, travel tips and trip ideas for those seeking adventure or relaxation, and expert advice from our on-the-go Moon travel authors.

Find Activities>>

Moon Travel Guides make independent travel and outdoor exploration fun and accessible. With expert and adventurous travel writers delivering a mix of honest insight, first-rate strategic travel advice, insider travel tips and an essential dose of humor, Moon Travel Guides ensure that travelers have an uncommon and entirely satisfying experience. Each travel book is filled with unique trip ideas, easy-to-use maps, and detailed information on sights, restaurants, and accommodations. Moon Travel Guides not only point you in the right direction, they inspire new ideas and adventure. Whether you are seeking a relaxing beach trip to Hawaii, or an adventure travel trip to the rainforests of Costa Rica, Moon guidebooks—and Moon.com—are with you every step of the way. Founded in 1973, the Moon Travel Guides series includes Moon Handbooks, Moon Outdoors, Moon Metro, Moon Living Abroad and Moon Spotlight travel books. Moon is based in Berkeley, California and is a proud member of the Perseus Books Group.