Mexican miracle facts for kids
The Mexican Miracle (called Milagro mexicano in Spanish) is a name for a time when Mexico's economy grew a lot. This happened from about the 1940s to 1970. During this period, Mexico focused on making things for its own people instead of buying them from other countries.
It was like a "golden age" for Mexico's economy. The country's economy grew by about 6.8% every year. Factories made 8% more goods, and prices (inflation) stayed low, around 2.5%. This economic plan helped Mexico become much stronger.
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How Mexico's Economy Grew Strong
For Mexico's economy to grow steadily from 1940 to 1970, a few important things happened. One big change was that politics became more stable. There was one main political party, the Institutional Revolutionary Party (PRI). This party was formed in 1946.
After 1946, Mexico elected its first civilian president in a long time, Miguel Alemán Valdés. Then came Adolfo Ruiz Cortines, Adolfo López Mateos, and Gustavo Díaz Ordaz. These presidents helped carry out the economic plans without much political fighting.
Before this, President Lázaro Cárdenas made big changes. He took control of Mexico's oil industry in 1938. He also changed how land was owned and took control of the railways. These actions set the stage for future economic policies.
His successor, Manuel Ávila Camacho, started a plan to build up industries in 1941. This plan was called the Law of Manufacturing Industries. It was the start of Mexico making more of its own goods. Later, President Miguel Alemán Valdés passed another law in 1946 to help new industries grow.
World War II Helped Mexico
World War II (1939-1945) was very important for Mexico's economy. Mexico joined the Allies in the war. It sent workers to the U.S. through the Bracero Program. More importantly, Mexico supplied many materials needed for the war.
Mexico received cash payments for these materials. This meant that after the war, Mexico had a lot of money saved up. Unlike many countries, Mexico was not a battlefield, so it didn't need to rebuild damaged cities or roads. Instead, it used its savings for big projects like new roads and dams.
President Ávila Camacho used some of these savings to pay off old debts to other countries. This made other countries trust Mexico more, which was good for getting new investments. With more money, the government could help its people more. For example, it helped pay for food imports, which helped city workers.
Workers also earned more money during the war. But there weren't many things to buy. So, people saved their money. This meant they had money ready to spend after the war. A key organization that helped Mexico's industries grow was Nacional Financiera (NAFIN). It was a special bank that gave money to help factories expand.
Better Education, Stronger Economy
Mexico also invested a lot in education from the late 1920s to the 1940s. More young people went to school. When this generation started working in the 1940s, they were more skilled and productive.
Mexico also built new universities and technical schools. These schools trained scientists, engineers, and other experts. They helped Mexico create new inventions and improve its industries.
For example, the Instituto Politécnico Nacional (IPN) was founded in Mexico City in 1936. It was a government school that trained many new Mexican professionals. In northern Mexico, the Monterrey Institute of Technology and Higher Education (Tec de Monterrey) was started in 1942 by business leaders. It was modeled after a famous American university and became a top school for students from all over Latin America.
Making Things at Home: Import-Substitution
After World War II, President Miguel Alemán Valdés (1946-1952) started a big plan called "import-substitution." This meant Mexico wanted to make things for its own people instead of buying them from other countries.
The government made it harder to import finished goods like clothes or toys. But it made it easier to import machines that Mexican factories needed to make these goods. Mexico used the money saved during the war to buy these machines.
The government also spent a lot on big projects. They built large dams to create hydroelectric power (electricity from water). These dams also provided drinking water for cities, water for farms, and helped control floods. By 1950, Mexico had built 21,000 kilometers of roads, with over half of them paved.
Mexico's economy was stable, and it had good credit, so it could borrow money easily. Its workers were becoming more educated, and people had savings to buy new products. These were perfect conditions for the import-substitution plan.
Factories in Mexico started making goods that used to be bought from other countries. For example, textile (cloth) production grew a lot. Big international companies like Coca-Cola, Pepsi-Cola, and Sears (Mexico) also opened branches in Mexico, following Mexican laws.
The automotive industry in Mexico was already there. Companies like Buick and Ford Motor Company started making cars in Mexico in the 1920s. As more Mexicans joined the middle class, they could afford cars and other expensive goods. This helped Mexico's industrial base grow even more.
The government helped these industries by putting high taxes on imported goods. This made foreign goods more expensive and encouraged people to buy Mexican-made products. By 1970, industries made up 29% of Mexico's total economic output, compared to 22% in 1950. Farming became a smaller part of the economy, while services stayed about the same.
Cities grew very fast during these years. Many people moved from farms to cities to work in factories and service jobs.
How Well Did the Economy Do?
Mexico's economy kept growing strong into the 1960s. The total value of goods and services produced (called GDP) grew by about 7% each year. Prices only went up by about 3% annually.
Manufacturing (making goods in factories) was the biggest growth area. It grew by 7% each year and attracted a lot of money from foreign companies.
Other parts of the economy also grew. Mining grew by almost 4% each year, trade by 6%, and farming by 3%. By 1970, Mexico was making many different products to sell to other countries. It could also produce enough food, steel, and most consumer goods for itself. Even though Mexico still imported many things, most of these were machines and tools needed to make more goods at home.
See also
In Spanish: Milagro mexicano para niños
- Economic history of Mexico
- Economy of Mexico
- Tourism in Mexico
