Chapter 931: Encountering a Boss by Occasion

Chapter 931: Encountering a Boss by Occasion

In 1988, Mexican President Carlos Salinas de Gotari introduced a major economic reform program aimed at modernizing the Mexican economy.

This plan is one of the templates adopted two years later for the establishment of the "Washington Consensus", which mainly includes the following four major aspects: opening up the domestic economy and participating in international competition by substantially reducing import tariffs and finally signing a free trade agreement with the United States .

Privatization and deregulation of most sectors of the economy, with the exception of the oil, gas, and energy industries; and a stabilization program aimed at controlling inflation, based on maintaining a tight peso-dollar peg.

Specifically, the peso's exchange rate against the dollar can only fluctuate within a small, pre-set range each day. The range is so narrow that all Mexican exchange rate policy must take into account this very rigid exchange rate relationship between the peso and the dollar.

A broad social and economic consensus among the government, the private sector and trade unions, known as the Economic Stabilization Program, aimed to control the pace of wage and price increases. This consensus is underpinned by prudent fiscal and monetary policies to keep inflationary pressures generally manageable.

The key feature of Mexico's reform program is based on the economic stabilization plan, which makes it distinct from the subsequent reform programs of Chile, Argentina and other countries.

The annual adjustment of the Economic Stabilization Program has become an important political event in Mexico, and the people are full of expectations, but sometimes expressed anxiety.

The main purpose of the economic stabilization plan is to secure the political support of the Mexican public for the reforms.

The annual participation of Fidel Velazquez, the legendary leader who led the UTM, in deliberations and decision-making has brought a level of political legitimacy to the Mexican reforms that has not been found in reforms in other Latin American countries.

The use of exchange rates as a hedge against inflation deserves special attention.

Since 1976, the Mexican public has linked exchange rate changes to inflation. Whenever the peso depreciates, the price of imported goods rises. In response, unions would demand higher wages, which would put additional pressure on prices to rise. It in turn led to further depreciation of the peso, higher inflation expectations and further increases in wages and prices.

To break this vicious cycle, Mexican authorities decided in 1988 to peg the peso to the dollar. The idea behind this policy is that if the extent of peso depreciation can be limited, inflation expectations will fall, bringing Mexico's inflation closer to that of the United States.

Despite the reforms of the Salinas government, the Mexican economy has not performed well from 1988 to the present. The average real economic growth rate is only 2.8%, which is significantly lower than Chile’s 7.1% and Colombia’s 4.1%. Productivity has hardly increased. Although exports have increased but not particularly outstanding, real wages are hovering at the level of 1980. There has been a marked decline, poverty rates remain high, and income distribution remains as skewed as it has been in the past.

On the positive side, the budget was balanced in 1992, inflation fell to the high single digits, and protectionism was abolished at all levels.

Even without significant economic effects, Mexico's reforms have been praised by financial experts, academics, the World Bank, and the International Monetary Fund as a major success story.

In a way, the term "Mexican Miracle" was coined by these institutions. This enthusiasm and optimism stems from a number of factors, including the confidence that many analysts have in the reforms themselves and the belief that, if not immediately, they will pay off in the near future.

The popular notion that the "Mexican miracle" is being realized has received another boost thanks to the Clinton administration's efforts to preach to the public and Congress the various benefits of NAFTA.

After the passage of NAFTA, a large number of observers believed that the free trade agreement would significantly accelerate the growth of investment and exports, and that the effects of Mexico's reforms would become visible to everyone.

Moreover, proponents of reform often cite the Mexican experience as a success story for the feasibility of successfully pursuing structural reforms under a democratic regime.

Indeed, Mexico is often compared to Chile, where many successful reforms were driven by an authoritarian military junta.

Presumably, the desire to find a case of successful market reforms in a democratic system, especially among U.S. officials, also contributes to the perception that Mexico has excelled.

In mid-1992, months before the peso collapsed, Finance Minister Pedro Aspe gave a speech at the prestigious Lionel Robbins Lecture at the London School of Economics.

The published version of the lecture offers the most comprehensive explanation of the logic behind Mexico's anti-inflation program. According to the prevailing view in the Mexican government at the time, a fixed peso value would quickly remove the inertia of inflation and put a cap on price increases.

Mexico's economic stabilization program succeeded in reducing inflationary inertia, but not eradicating it.

This kept Mexico's inflation rate down slowly, while local prices and costs rose faster than international prices in the early 1990s. With its currency almost completely pegged to the U.S. dollar, Mexico’s international competitiveness has gradually declined—the amount of pesos Mexican exporters receive per dollar of goods remains constant, but domestic costs such as wages, rent, taxes, and insurance continue to rise, compressing the profit margins for exporters.

The Brady Plan of 1989 restructured the debt accumulated by Latin American countries in the "lost decade", and the scale of Mexico's external debt was significantly reduced. Since then, Mexico has opened its financial markets to foreign investors and started privatizing state-owned banks.

As a result of these policies and the perception that Mexico was about to experience some kind of economic miracle, international capital markets turned their attention back to Mexico, investing heavily in securities issued by the Mexican government and government corporations.

The resulting surge in capital inflows has allowed the country to finance a large and growing "current account" deficit.

The "current account" balance is the most comprehensive indicator of a country's foreign economic exchanges. From 1992 to the present, this deficit has reached an average of almost 7% of Mexico's GDP. Many economists believe that such a high deficit is extremely dangerous.

Because government spending is under control and the inflows are mainly private, many analysts, especially senior Mexican government officials, believe that despite the size of the capital inflows, there is nothing to worry about.

For a long time, economists have debated the correct steps in economic reform, asking which markets should be liberalized first and which should be deregulated later or more slowly. Most experts agree that the optimal sequence of liberalization should be to gradually remove controls on international capital flows, so as to avoid sudden increases in liquidity due to huge capital inflows, which will lead to artificial appreciation of the domestic currency.

Contrary to this conventional wisdom, Mexico chose to lift restrictions on international capital flows in 1989, when reforms were just beginning.

Such a reform step was taken in response to factors such as Mexico's long tradition of allowing the free movement of capital; the country's strong desire to join the Organization for Economic Co-operation and Development (OECD), a club of rich countries that requires members to give up Flow barriers.

Mexico's strategy contrasted sharply with other Latin American reformers who followed, and Chile adopted some restrictions on the free flow of capital to avoid endangering export competitiveness.

With no restrictions, international financiers were able to move large sums of money freely in and out of Mexico. In less than half a year in 1993 alone, Mexico's net capital inflow exceeded 8% of its GDP (half a year). Compared with the capital inflows of other countries and Mexico's historical data, this is an astonishing figure.

Most of the funds are short-term speculative, invested in the stock market, private sector financial instruments and government bonds.

By 1992, a number of observers were debating whether a stronger inflation-adjusted currency, or what economists called the "real exchange rate," would threaten the sustainability of Mexico's reforms.

Rudy Dornbush, a professor at the Massachusetts Institute of Technology and an expert on Latin America, pointed out: "The immediate problem of the Mexican economy is that the exchange rate is overvalued."

A World Bank document released in November 1992 mentioned with ominous foreboding that "opening the capital account would also expose Mexico to violent fluctuations in short-term capital flows, even if domestic economic policies are correct. It will also transmit unstable external shocks to the country."

The document also mentioned that Mexico could "address these dangers by raising interest rates or devaluing the peso."

In response to these concerns, Mexican authorities reiterated that capital inflows are largely private and that the government's fiscal balance is balanced, so there is nothing to worry about.

Its position is based on three reasons: First, Mexican officials point out that the economic system itself is flexible enough to deal with unexpected conditions and shocks, such as elastic interest rates and a limited range of exchange rate fluctuations.

Second, a rapid increase in productivity will soon occur, which will lead to a substantial increase in exports, eliminating the "current account" deficit and the trade deficit.

Third, the fundamentals of long-term economic growth remain healthy, all the more so given the signing of NAFTA.

Miguel Mancira, president of Mexico's central bank, has told The Economist that the trade imbalance is not a problem because it is related to inflows of foreign funds rather than being caused by expansionary fiscal or monetary policies.

Moreover, Mexican authorities have calculated that, properly measured, the inflation-adjusted overvaluation is not as severe as independent observers believe.

What these analyzes fail to recognize, however, is that capital inflows into Mexico at rates exceeding 8 percent of gross national output are unsustainable in the long run and that at a certain point the inflows slow or even stop abruptly .

While the jury is still out on how large capital inflows can sustain this over long periods of time, there are some useful guidelines that analysts can follow to explore whether capital inflows deviate from sustainability.

Generally speaking, most guidelines call for keeping the “current account” deficit below 4% of GDP, a level Mexico has far exceeded since 1992.

After reading the analysis report, Nan Yi tapped the keyboard a few times to call up the major events and conference statistics that will affect the world's political or economic structure this year, and consult the parts related to Mexico.

As part of preparations for the World Conference on Human Rights to be held in Vienna, Austria, in June, representatives of Latin American and Caribbean countries gathered in San Jose, Costa Rica, from 18 to 22 January to adopt the San Jose Declaration.

The declaration reaffirms the commitment of Latin American and Caribbean countries to promote and guarantee full compliance with the human rights enshrined in the Universal Declaration of Human Rights and universal and regional human rights instruments through their own efforts and broad, non-selective and discriminatory international cooperation.

The Declaration believes that civil, political, economic, social and cultural rights are interdependent and indivisible. The Declaration emphasizes the relationship between human rights, democracy and development, and believes that defending and strengthening representative democracy is the best guarantee for the effective enjoyment of all human rights.

The right to development is an inalienable human right, and the international community must take steps as soon as possible to realize this right through appropriate mechanisms that take into account that the right to development in a healthy and ecologically balanced environment is a universal right .

The Declaration expresses particular concern for the situation of children, women, indigenous peoples, vulnerable groups, persons with disabilities, migrant workers and their families, and the elderly, calling on the international community to cooperate in protecting their rights.

Nan Yi quickly browsed through the 31 texts of the declaration, and screened out the content related to the aborigines and drugs. According to the statement in the declaration, the countries participating in the drafting of the "San Joseph Declaration" have the obligation to improve the current situation of drug rampage, and also have the obligation to Acknowledging the enormous contribution of Indigenous peoples to social development and diversity;

Reaffirm the commitment to the economic, social and cultural well-being of Indigenous peoples and the obligation to respect the initiative and participation of Indigenous peoples; recognize the value and diversity of Indigenous cultures and forms of social organization without compromising national unity.

Having seen the "World Conference on Human Rights", Nan Yi continued to look down. The major events that will take place this year are directly related to Mexico's "American Conference" organized by the "Wall Street Journal" in late October; and Clinton's proposal, Its main purpose is to promote the "Summit of the Americas" in the process of economic integration in the Americas.

The "Summit of the Americas" has only been proposed, and it is still in preparation. Information such as whether it will be held, when it will be held, and where it will be held is still unclear.

Nanyi just felt that the name of this meeting sounded familiar, but he had no memory of its situation at all. He made a call to ask about the theme of the Americas meeting. memory of words, he came to a conclusion:

It is necessary to figure out when the Zapatistas will make a fuss, and the investment cost of the Mexican layout, and even the first-phase profits will fall on them.

Nanyi subjectively believes that there is a certain connection between the Mexican financial crisis and the Zapatistas. The existence of the Zapatistas shows that Mexico is still a country with serious social problems, that is, there is political uncertainty in Mexico. It will directly cause the confidence of the international financial community to invest in Mexico to be shaken.

If the Zapatistas make any movement, the international financial community's confidence in Mexico's investment will plummet, and then a chain reaction will occur. The most intuitive reaction will be in the exchange rate, and the Mexican peso will definitely plummet.

Crackling, Nanyi quickly tapped the keyboard, sent an email to the ghosts of the intelligence policy committee and the intelligence team, and copied them to Scarlett. She has a specialization in technology, and Scarlett should worry about financial strategies Better.

After sending the email, Nanyi's work came to an end. He lay down on the bed and turned on the TV. Televisa Group's Mexicali TV station was broadcasting an old drama "Trap".

This drama is adapted from the novel "No Survival". It is a reasoning drama. It was introduced into China two years ago. Nanyi has watched a few episodes of the dubbed version, and the episode that is currently being broadcast happened to be watched. After watching it for a few minutes, Nanyi's eyes began to narrow, and suddenly, he subconsciously pressed the remote control and fell asleep.

...

"Bang bang bang bang bang bang bang bang bang!"

Before Nanyi's biological clock woke him up, something knocked on the outer wall of the room. Before he opened his eyes, Nanyi heard cursing mixed with the noise, "Who is on duty?"

"I."

The angel's voice came from the sofa.

"Is that girl?"

"yes."

Nan Yi turned over and took a look at his watch from the bedside table. He wanted to scold his mother for a moment. It was only four o'clock in the morning. When he woke up at this time, he would inevitably have to take a lunch break at noon.

Getting up very unhappy, went to the bathroom to wash up, Nanyi took out a rolling bearing sleeve and put a steel nail on it to act as an abdominal wheel, lay down on the ground and did a set, took a short rest and started sit-ups, push-ups, push-ups, etc. kind of fitness exercise.

After doing this, Nan Yi hung a white towel around his neck, opened the door, and prepared to run on the roof of the hotel.

As soon as the door was opened, Angelina Jolie, who was still kicking the wall, heard the movement. Her bare feet kicked on the floor and rushed towards Nanyi.

Angelina Jolie's right leg was raised, and when she was about to kick Nanyi, Nanyi moved to the right, raised her left foot, the toe was a little bit in her crotch, and then quickly pulled away.

"Ah...boom..."

There was a scream, the sound of falling on the back, and then the scream continued. Angelina Jolie bowed like a shrimp and kicked like a frog, which was funny and cute.

"Twelve miles northeast, it's the dealer's land, if you're really tired, you can go there, ten, maybe twenty, thirty drug dealers fucked on you, you can beg them to give You have a good time."

After Nan Yi finished speaking, he withdrew his gaze from looking at Angelina Jolie, and walked straight to the top of the building. When he turned and was about to go up the stairs, he suddenly felt something was wrong with Angelina Jolie's cry of pain. He took a step back and listened intently, his brows were furrowed, this is not crying for pain, it is obviously pain and happiness.

"Masochist?"

Suspicious, Nanyi went up to the platform on the top of the building, and started running back and forth along the east and west lines of the building. When he finished running and went downstairs, Angelina Jolie was no longer in the corridor.

After washing up again, after Edith Gonzalez got up and had breakfast together, Nanyi and his party started the boring Mexicali Valley, that is, the investigation tour of Mexicali's agricultural planting area.

Mexicali was originally a water-scarce land. Thanks to the introduction of the Colorado River into Mexicali decades ago, this has created the prosperity of the city and the prosperity of the Mexicali Valley planting area.

Standing on a high ground beside the Colorado River, Nan Yi held a hydrographic map of the Colorado River in his hand, studying the direction of the Colorado River.

The Colorado River is a major river in the southwestern United States and northwestern Mexico. The river is 2,330 kilometers long, and the entire basin covers 7 states in the United States and 2 states in Mexico, passing through the vast desert climate region of the southwestern United States.

The main stream of the Colorado River starts from the Lapudle Pass in Colorado, the main tributaries come from Wyoming, Nevada, New Mexico and other places, a small part comes from Sonora, Mexico, and most of the entire river system is located in the United States;

The river flows from the source to the southwest through the Colorado Plateau, through Utah, Arizona, and the Grand Canyon, into Lake Mead, then flows south to Mexico, and finally passes through the dry Colorado River Delta, and flows into the ocean from the top of the Gulf of California.

The middle and lower reaches of the river are currently the boundary rivers of several administrative regions, including the state border of Arizona and Nevada, the state border of Arizona and California, the state border of Arizona and Baja California, the border of the United States and Mexico, Baja California, Sonora State borders.

Since the flow of the Colorado River is mostly supplemented by meltwater from the mountains, dams have been built on many small tributaries upstream, close to their sources at high altitudes, so that a large part of the water can be intercepted and electricity can be generated.

Downstream dams rely heavily on upstream dams to release water. If Utah decides to increase the capacity of the Glen Canyon Dam, there will be a knock-on effect. Downstream, Nevada will have a cascade of reservoirs in the Hoover Dam and Arizona in the Gila River system. Cut off a certain storage capacity.

If things go on like this, the most downstream Parker Dam and Empire Dam reservoirs will gradually dry up, and Southern California will inevitably have no water to drink.

Therefore, in order to solve these problems, from the end of the 19th century to the 1940s, the western states signed various "water rights treaties", which stipulated in detail which state, which city, which county and even which farmer could get water from the canal. How much water is taken.

Since then, the Colorado River Basin has been able to eat up every drop of water and leave no drop to the sea. Relying on a river whose annual runoff is only as high as that of the Jialing River, it has supported more than 30 million people in backyard swimming pools and front lawns. Life in the distance water park, golf course.

It has lasted for decades, and it can be called a miracle that has never been seen in hydraulic engineering.

Looking at the direction of the Colorado River on the map, Nan Yi frowned. The population of the Colorado River Basin has increased several times compared to when the right to enter the water was initially determined, and the population distribution has also undergone major changes. The most prominent ones are Phoenix and Two super metropolitan areas in Los Angeles.

However, the water resources allocation treaty remains the same. Most of the initially signed clauses first guarantee the downstream water use. Now it has developed into a situation that is actually very beneficial to California. No matter how much water is available upstream, all the dams from Colorado and Wyoming all the way down , both have obligations to flow into the Parker Dam and Empire Dam aqueducts in Southern California.

According to this situation, the Los Angeles metropolitan area and the Inland Empire (Riverside City, San Bernardino County) will consume at least most of the water in the Colorado River, leaving little for Arizona and Nevada. Less, and as for Baja California, it's just waiting to eat sand.

States in the United States have great administrative power. Once the states start arguing about revising the previous "Water Resources Treaty", the federal government will be very clever and invisible. After all, in theory, such matters are not under the control of Washington.

Looking at the American cities on the map that use the water resources of the Colorado River, Nanyi's head began to grow. There is no central coordination in the United States. It is simply unrealistic to ask any state to make sacrifices to benefit other states.

What's more, the states involved are still divided into the traditional spheres of influence of the two parties. It is simply a dream to let the Donkey Party give water to the Elephant Party, and vice versa.

Since California's north-to-south water diversion, Nanyi doesn't remember any large-scale water conservancy projects in the United States, and he doesn't know whether the treaty has been re-signed, let alone whether the future water use in Mexicali has reached a very tight point.

"It is necessary to find out the water use of the Colorado River, and to survey the groundwater resources in the Mexicali Valley, otherwise the purchase is not land, it may be a time bomb."

Touching his chin, Nanyi considered how to change his itinerary. He had planned to spend a few days to go through the entire Mexicali Valley, but now it seems necessary to postpone it. The water problem is not clear. Too much can easily be futile.

Greeting Eddie Gonzalez who was hiding in the cracks of the mountain wall to enjoy the cool, Nanyi and his party went to the Dragon House Restaurant again. It was just after the peak dining time, and there were not many people in the restaurant, so there was no need to queue up to get a seat.

As soon as Nanyi sat down, he found a gentle-looking man of yellow race walking towards him. The man stopped a meter away from Nanyi, took the business card he was already holding in both hands, and headed south. Yi Shen handed it over, "Hi, I'm Ye Zhenli from Xinmin Pharmaceutical Co., Ltd. If you need medicine, you can contact me."

"Hello, hello." Nanyi stood up and took the business card with both hands, looked at it formulaically, and then put it away, "Mr. Ye, you wasted a business card, I don't make medicine."

Ye Zhen was not disappointed when he heard that Nanyi said that he did not make medicines, but he was a little annoyed when he heard the Beijing movies in Nanyi's mouth. He wanted to meet powerful people in Mexico, not tourists from China.

However, he still maintained a formulaic smile, and said modestly and peacefully: "It's okay, I see that Mr. is in big business, and he may enter the pharmaceutical industry in the future. You can still find me if you need it."

"Okay, okay, my surname is Bu, Bu Fandu. If I really make medicine in the future, I will definitely contact Mr. Ye. Sorry, I don't have a business card."

"It's okay, don't disturb Mr. Bu's meal." Ye Zhenli said, nodded slightly, turned and walked to his seat.

Nanyi waited for Ye Zhenzhen to look away from him, so he glanced at other tables and found another table where someone was sitting with business cards casually placed on it, and instantly understood that Ye Zhenzhen was casting a wide net, not going straight to him .

Taking the business card in his hand and looking at it again, Nan Yi was very emotional, "I actually met this great god here, should I say Sansheng is lucky?"