Abstract
The Mexican economy underwent an expansive long wave of rapid capital accumulation from the mid-1930s until the beginning of the 1980s. The structural foundation of this long wave was the elevated levels of profitability that emerged from the structural transformations of the world and Mexican economy that took place during the interwar period and that were reinforced during World War II (WWII). The strong process of capital accumulation came with a constant tendency of the rate of profit to fall, which manifested in Mexico since the second half of the 1960s and endured until the mid-1980s. The consequent structural crisis gave way to the neoliberal restructuring that led to a contractive long wave of capital accumulation that still persists. This chapter analyses the transformations of the Mexican manufacturing sector during the neoliberal period. The general characteristics of the neoliberal restructuring of the manufacturing sector are examined, with particularly, it is emphasized the central role played in this process by the precarization of labor as a precursor and result of the external opening. The articulation of the manufacturing sector to the world market and the effects of international competition in the performance of its various subsectors, distinguishing among the different stages of the external opening, are analyzed. An evaluation is made of the main structural changes experimented by the manufacturing sector through the analysis of the effects of the performance of GDP, Foreign Direct Investment (FDI), investment, productivity, employment, and real wages on the relative dynamics of its different subsectors. A critical evaluation of the manufacturing export-led accumulation model that has emerged from the neoliberal restructuring processes is presented.
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Notes
- 1.
- 2.
This program emerged in 1965 to compensate the negative effects on employment of the cancelation of the Mexican Farm Labor (Bracero) Program, but also as an early attempt to develop a manufacturing export industry based on the swelling strategy of the transnational corporations to allocate some of their assembly lines of production in low-wage countries (Douglas and Hansen 2003: 1050–1055).
- 3.
“Thus, separate from the formal reform of federal labor laws, labor and working conditions have already changed de facto” (Dussel Peters 2000: 148).
- 4.
Mariña Flores (2005) provides an additional insight of the changing role of the manufacturing sector during the period 1970–1981 and the early stage of the external opening. In the period 1970–1981, the value of exports in relation to the gross value of production of the manufacturing sector averaged 6.1%, just above the 6.0% for the overall economy. In fact, the export share of the gross value of production of the nonmaquila component of manufacturing averaged only 3.7% in the same period, implying that the transformation industry produced almost exclusively for the domestic market.
- 5.
During these early years of external opening, the expansion of manufacturing exports rested foremost on the maquila subsector; the participation of the maquila in exports grew from 42.1% in 1982 to 50.4% in 1993. Nonetheless, the (nonmaquila) transformation industry also increased its export share of the gross value of production from 4.5% in 1982 to 11.9% in 1986, remaining stable afterward (Mariña Flores 2005).
- 6.
To a great extent, the expansion in imports is the consequence of the increment in the imported component of the supply of manufacturing intermediate goods that took place also since 1986, increasing from 17.9% in 1985 to 27.5% in 1993. Consequently, the imported component of the intermediate goods employed in the manufacturing sector increased from 18.2% in 1985 to 27.4% in 1993. Part of this increase is attributable to the growing relative weight of the maquila, which imported steadily around 90% of the intermediate inputs in the period (Mariña Flores 2005).
- 7.
Miscellaneous manufacturing is omitted of the analysis of the manufacturing subsectors in the chapter. It is a very heterogeneous sector whose composition has changed significantly over time.
- 8.
Mariña Flores (2001) provides data on imports of intermediate goods of the manufacturing subsectors in 1980 and 1993 based on the input-output tables, which increased on average 5.7% annually for the manufacturing sector. Except for primary metals (−0.6%), the most dynamic export sectors in 1982–1993 had also high increases in the imports of intermediate goods: wood (8.6%), fabricated metal products and machinery (8.4%), and nonmetallic mineral products (7.3%). On the contrary, the less dynamic export sectors experienced lower increases in imports of intermediate goods, except for textile, apparel, and leather (13.0%): food, beverages, and tobacco (2.2%); paper, printing, and related support activities (4.4%); and chemical and petroleum products (5.57%). The manufacturing subsector with a higher proportion of imported intermediate goods in 1993 were fabricated metal products and machinery, paper, printing, and related support activities, and chemical and petroleum products.
- 9.
Adding to this description, 50% of the gross value of production of the manufacturing sector was exported in 2016.
- 10.
In the aftermath of the Great Recession in the United States, its manufacturing sector gained GDP share, boosted by the durable goods segment, between 2009 and 2013, reversing a long-lasting declining trend.
- 11.
Unlike Mexico, the United States, the main destination of Mexican manufacturing exports, has relatively specialized in corporate management and financial services. The data on the United States presented in this chapter come from various sources of the Bureau of Economic Analysis.
- 12.
Data on the fixed investment by sector are only available in the Mexican System of National Accounts from 2003 on.
- 13.
The omission of the two manufacturing subsectors that appropriate a considerable amount of ground rent (Petroleum and coal products and primary metals) does not change significantly the productivity growth in any of the three stages.
- 14.
If Petroleum and coal products and Primary metals are removed, productivity growth was still a meager average annual 0.6%.
- 15.
The correlation of both variables is actually negative for all the different stages of the NAFTA period: 1994–2000, 2001–2007, and 2008–2016. In contrast, the growth of exports was positively correlated with productivity growth in the early stage of the external opening (1982–1993).
- 16.
In contrast, there is a positive correlation in the early stage of the external opening (1982–1993).
- 17.
Similarly, the positive correlation of the growth of exports with productivity growth in the early stage of the external opening (1982–1993) is mirrored as a negative correlation with employment growth.
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Mariña Flores, A., Cámara Izquierdo, S. (2019). The Manufacturing Sector in Mexico During the Neoliberal Period. In: Santarcángelo, J. (eds) The Manufacturing Sector in Argentina, Brazil, and Mexico. Palgrave Studies in Latin American Heterodox Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-04705-4_4
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