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What was the effect of the discovery of oil on the Mexican economy?
Wiki User
∙ 12y ago
It became a victim of the "oil curse": each and every developing country that has discovered petroleum in its soil has had less economic growth and development than those countries with fewer reserves.
In the case of Mexico, British and American interests played a part in such curse: these countries exploited such natural resource at the expense of the environment and the working class. In 1938 Mexican president Lazaro Cardenas nationalized the industry but was spared from the usual "regime change" driven by the US and England thanks to World War 2.
Later on, when the 1973 Oil Crisis hit the developed world, Mexican Presidents Luis Echeverria and Jose Lopez Portillo began to rely heavily on oil exports to support the financial needs of the country, taking advantage of the high oil prices. When the market eventually stabilized, the little diversification of exports resulted in an economic slump and a devaluation of the Peso by 500%. This is often called the Lost Decade or Decada Perdida (1973-1982).
Wiki User
∙ 12y ago
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