Porfirio Diaz’s presidency has been criticized as an authoritarian president who brought the common Mexican people to its knees while his close associates enrich themselves with the wealth of the country sold to foreigner. This overshadowed the fact Mexico grew from the dark chaotic shadows of 18th century.
Mexico Before
Since
independence in 1821, Mexico descended to political chaos followed by economic
decline. Emperors, Presidents, and Generals dubbed as caudillos battled for
supremacy while society fragmented between different classes and race. The
great divide made Mexico vulnerable to aggressive foreign powers that entered
frays complicating the already chaotic situation.
Foreign
intervention resulted to the loss of Texas in 1837 followed by a French and
British strike in 1838 during the so-called Pastry War that truly focused on
Mexico’s heavy indebtedness. Finally, Mexico loss its vast territory to the
United States during the American-Mexican War. Few decades later, the French
invaded attempting to install their own Emperor to power.
In
this situation, Porfirio Diaz was born in 1830 to a poor mestizo peasant. He
decided to be a soldier in his teenage years and became prominent during the
French invasion. Eventually he became a force to be reckon with and in 1876 he
staged a coup that made him President of Mexico until 1880. He relinquished
power to give way to the first peaceful transfer of power in Mexican history to
his hand-picked successor Manuel Gonzales.
Gonzales’s
regime began the modernization of the country’s infrastructure, but corruption
and mismanagement of finance brought the country on the brink. This led
Porfirio Diaz to run for President in 1884 and won ruling Mexico until 1911.
Porfiriato
Finance and Foreign
Investment
Porfirio
Diaz served as President from 1876 until 1880 and again in 1884 until 1991.
Under his regime, he implemented fiscal and economic reforms that transformed
Mexico’s landscape.
During
his first presidency, he placed great importance in managing the country’s
finances. He reduced spending and tightened the budget to achieve a balance. He
reduced corruption and decrease the size of the bureaucracy. However, before he
could implement further needed reforms, his tenure ended and handed over power
to his “elected” successor Manuel Gonzales.
President Manuel Gonzales |
Then
in 1884, he came back to power after the country went back once again to dire
financial conditions. This time he stayed in power for a long time with the
slogan “Order and Progress.”
Mexico’s
tremendous foreign debt became President Diaz’s immediate concern. Not an
economist or financier in profession, he relied to his inner circle of technocrats
called the Cientificos. Among the Cientificos
his secretary of finances Matias Romero then Jose Yves Limantour helped in
reforming the budget and paying debts.
Mexico’s
debts amounted to $ 25 million in unpaid salaries of civil servants and soldiers
and another $ 200 million in foreign debt. Annual government revenue in 1877
was around $ 19 million and increased little over the next decade.
To
prevent the country from being vulnerable financially, he must solve the
country’s debt. He began by reducing the salary of government workers making an
example of himself by reducing his salary by 50% from $ 30,000 to only $
15,000. He also streamlined the government and reduced the number of civil
servants to save money. He also renegotiated some foreign debts with success
bringing it down to $ 146 million. He also prohibited the charging of penalties
to overdue debts to lessen debt from local sources. Then in the 1890’s he
switched Mexico’s standard from silver to gold to prevent sudden fluctuation in
the government’s debt. With much of his reforms in debt payment and finances,
confidence to Mexico and its ability to meet creadit payment rose gradually
until such time that interest rates charged to its loans stood lower than
Russia or Greece. Further confidence on the government’s finances skyrocketed
after it reported a surplus budget of $ 72 million in 1895. Its revenue also
rose from $ 19 million in 1877 to $ 100 million in 1909.
President Diaz in his private cabinet |
While
the government strictly managed its budget and spending, President Diaz knew
that the country needed to see developments if he wanted to remain in power.
But since money remained scarce for the government, he and the Cientificos
looked towards foreign funding or investments to finance much needed
development.
To
attract foreign investments, Diaz needed to secure order to bring a safe
atmosphere to foreign investors. He then combated widespread banditry by
sending troops to the countryside, especially to Northern Mexico to cease raids
by bandits to the United States. He also expanded the local police forces called
the Rurales who earned a notorious
reputation for brutality but effective in clamping down on bandits and
opposition alike. Determined to stop violence in the countryside, Diaz punished
bandits with death upon their capture.
The Rurales |
With
financial management, Diaz’s government also made it a priority to pay
government workers and soldiers in time to curtail corruption. They realized
that lack of better pay made officials susceptible to corruption to make ends
meet. Thus, under Diaz, pay to government workers came out regularly.
Confidence
of foreign investors gradually rose and furthered as Diaz threw his
government’s support in meeting their needs. He altered laws in land ownership
that gave them right to own and exploit especially sub-soil resources where
Mexico had abundance.
Diaz’s
administration met with influx of foreign investors from Great Britain and
United States. He also expanded sources by expanding the country’s foreign
affairs. He signed treaties of friendship with various European countries,
which led to additional investment and trade. Mexico’s trade expanded from $ 36
million in 1833 to $ 481 million in 1908. Commodities such as silver, gold, and
oil comprised the bulk of export while capital goods such as machinery and raw materials
became prime imports.
Viaduct of Metlac, between Mexico City and Vera Cruz. An example of
important engineering work which is to be seen throughout
modern Mexico
|
Foreign
and economic relations with the United States took center stage during Diaz’s
rule. Much of the country’s foreign direct investment came from the United
States, while 75% of its exports went to its powerful and rich northern
neighbor. The influx of American investment led to the development of Mexico’s
infrastructure and mining industry.
See also:
Bibliography:
Websites:
“Diaz and the Porfiriato 1876-1910.” In MexicanHistory.org. Accessed on April 29, 2018. URL: http://mexicanhistory.org/Diaz.htm
Evens,
Travis. “The Porfiriato: The Stability and Growth Mexico Needed.” In Studies by Undergraduate Researchers at
Guelph. Accessed on April 29, 2018. URL: https://journal.lib.uoguelph.ca/index.php/surg/index
Books:
Mallen,
Bernardo. Mexico Yesterday and To-day, 1876-1904. N.P., N.P.: N.P., 1904.
Creelman,
James. Diaz, Master of Mexico. New York, New York: D. Appleton and Company,
1911.
Kirkwood,
Burton. The History of Mexico. Westport, Connecticut: Greenwood Press, 2000.
Tweedie,
Alex. Porfirio Diaz, Seven Times President of Mexico. London: Hurst and Blackett
Limited, 1906.
No comments:
Post a Comment