ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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A Tale of Two Countries

A Tale of Two Countries WHAT has gone wrong in Mexico is the question that people, not just in that country, but all over have been asking. Here is a country which until the other day was held up as a model of successful economic reform, including both liberalisation and privatisation, and was admitted to OECD, the club of the developed countries, in recognition of not just its fast economic growth over the past five years but also its high ranking with the international commercial banks through whom external credit flowed into the country directly and indirectly. Today Mexico's foreign exchange reserves stand drastically reduced from $ 30 billion to $ 5 billion, i e, to a level less than one month's imports. The rate of exchange of the Mexican peso has declined sharply from three pesos to one US dollar to six pesos within days. The domestic inflation rate which was supposed to have been brought under control (it was hovering below 10 per cent per annum in 1994) is once again ihreatening to escalate to typically Latin American levels.

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