MEXICO HAS THE POTENTIAL FOR A MORE equitable and beneficial type of economic growth.
Economist Ren6 Villareal, for example, has recently argued
that “the most viable Mexican industrialization strategy in-
volves (1) an expansion of manufacturing exports and (2)
endogenous industrial growth centering on basic goods and
inputs. In turn, this external orientation should be supported
by (3) a process of selective import-substitution industrial-
ization in which links in the productive chain are created that
promote intra-industrial and inter-sectoral articulation, and
competitive and efficient production.”‘ Such a strategy draws
upon the experience of the Southeast Asian “tigers”: South
Korea, Taiwan, Singapore and Hong Kong.
Indeed, some lessons can be learned from these tigers
since every facet of the new Mexican industrialization strat-
egy differs markedly from their export-led success. South
Korea, for example, never adopted indiscriminate economic
liberalization, but rather a mix of active export promotion and
efficient import substitution. Moreover, industrialization was
preceded by a massive redistribution of wealth and income
through land reform. These reforms increased employment
and reduced poverty in the countryside, slowing emigration
to the cities. A more equitable distribution of income created
the foundation for an expanding domestic market, so that
growth was both outward- and inward-oriented.
Strong state intervention in South Korea had a key role in
turning private-sector activities into a coherent industrializa-
tion strategy. An efficient state bureaucracy had the institu-
tional capacity and independence to run such a strategy.
Foreign and domestic private investment was directed and
controlled to avoid the creation of “enclave” economies.
Export-processing zones quickly became a source of forward
and backward linkages-forward through rising real wages
that created demand for other industrial and agricultural
goods; backward by encouraging the use of intermediate
inputs made by domestic industry. 2 Unfortunately, NAFTA
conditionality precludes Mexico from engaging in these
types of policies. Mexico must first free itself from such
external constraints before it can engage in a different type of
developmental policy.
1. Ren6 Villareal, “The Latin American Strategy of Import
Substitution: Failure or Paradigm For the Region?” in Gary
Gereffi and Donald L. Wyman, eds., Manufacturing Miracles:
Paths of Industrialization in Latin America and East Asia
(Princeton: Princeton University Press, 1990), p. 316.
2.These issues are discussed at length in different chapters of
Gereffi and Wyman, Manufacturing Miracles.
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