Mexico has fundamentally transformed and privatized its external sector. This paper compares and contrasts the adjustment of Mexico's external sector to the economic crisis of 1982-1983 and 1994-1995. While the two crises bear similarities in their causes, the response of the external sector to them is strikingly different. In the early crisis, exports responded anemically and were almost totally controlled by the state. In contrast, now exports have grown at a brisk pace, are diversified, and, more importantly, are largely produced by the private sector. The structural changes that the Mexican economy has undergone since 1981 bode well for Mexico's recovery from its current balance of payment crisis. Moreover, the greater maturity and robustness of Mexico's importers and exporters may augur better years for Mexico's working classes.
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