Date: Tue, 27 Aug 1996 17:33:57 CDT
Sender: Activists Mailing List <ACTIV-L@MIZZOU1.MISSOURI.EDU>
From: Nicaragua Solidarity Network of NY <>
Subject: Weekly News Update #343, 8/25/96

Mexican Economic Growth: Maquiladoras and Emigres

Nicaragua Solidarity Network, Weekly News Update, #343
25 August, 1996

On Aug. 18 the Mexican government announced that the nation's Gross Domestic Product (GDP) had grown by 7.2% during the second quarter, in comparison with the same period in 1995. This was well above predictions of 5.8% growth by market analysts. [New York Times 8/20/96] The industrial sector grew by an impressive 11.9%. However, the period used for comparison, April through June 1995, experienced a 9.8% decline in GDP. Paradoxically, federal tax revenues fell 10% in the first six months of 1996 compared to the same period the year before. The biggest decline was in income tax, which plunged by 18.1%; value-added tax (IVA) rose by 0.6%. The government attributes the decline to the fact that income tax paid this year was based on income from last year, the worst period of the crisis. [Mexico Update #86, 8/21/96 from Reforma 8/17/96, 8/19/96]

Much of the GDP growth comes from the maquiladoras (assembly plants) along the US border. From January to May this sector employed 737,386 people, a 16.3% increase over the year before. The sector's export income was $2.386 billion during that period, representing 29.6% of the country's export income. (The sector contributes little to the Mexican economy, however, since investment in the maquiladoras is dominated by US corporations, and 98% of the materials used in the plants are imported.) [Inter Press Service 8/5/96] The sector was the second main source of revenue from abroad in 1995, with $4.924 billion for the year; petroleum exports remained the largest source of export income, with $8.423 billion in sales. But the real growth sector, according to academic researcher Jorge Santibanez, is the undocumented Mexicans living in the US. He estimates that the total hard currency they sent home was more than $3.6 billion, making the emigres Mexico's third largest source of income from abroad. [Diario Las Americas 5/29/96 from AFP]