After five decades of political turmoil after independence from Mexico, the four consecutive administrations of President Porfirio D az, during the last quarter of the nineteenth century produced an unprecedented economic growth accompanied foreign investment and immigration, and the development of an efficient rail system and the exploitation of natural resources of the country.The gross domestic product (GDP) per capita in the early 1900s was on a par with Argentina and Uruguay, almost three times more than Brazil and Venezuela. The average annual economic growth between 1876 and 1910 was 3.3 . However, political repression and fraud, and the enormous income inequality exacerbated by the system of land distribution in large estates and farms where they worked million farmers in poor conditions were the main causes that motivated the Mexican Revolution (1910-1917) an armed conflict that radically transformed the political, economic, social and cultural development during the twentieth century, under a premise of social democracy. The period from 1930 to 1970 was called by economic historians as the "Economic Miracle", a stage of rapid economic growth spurred by the industrialization model of import substitution (ISI), which protected and promoted the development of national industry.Through the ISI, the country experienced an economic boom in which industries rapidly expanded their production. Important changes in economic structures included the free distribution of land to peasants under the concept of the ejido, the nationalization of oil and railroad industries, the incorporation of social rights in the constitution, the birth of large labor unions and modernization of infrastructure. The GDP in 1970 was six times higher than in 1940, while the population only doubled during the same period of time. To protect the balance of payments the government exercised protectionist policies in addition to increased private cr industry through Nacional Financiera (NAFINSA). The ISI model reached its latest expansion in the late 1960s, culminating in the recognition of Mexican development in the selection of Mexico City to host the summer Olympics.Faced with a possible economic recession, and trying to respond to social demands of the population during the 1970s, the administrations of Echeverria and Lopez Portillo tried to revive the economy while introducing social development policies which required increased public spending. In the 1970s formed the government financial institutions to support workers, such as INFONAVIT and FONACOT. With the discovery of new oil fields when oil prices were at record highs and low interest rates, even negative, the government agreed to loans from international markets to invest in the state oil company, which seemed to provide an income long term to finance social welfare in a plan named shared development plan.In fact, this method produced a significant increase in social spending, and President Lopez Portillo announced that it was now time to "manage prosperity." The plan, however, was very inefficient and its administration was accompanied by the mismanagement of resources and inflation. Comparison of nominal GDP per capita of Spain, Portugal and Mexico during the twentieth century, based on World Population, GDP and Per Capita GDP, 1-2003 AD. In 1981 the international scene changed abruptly oil prices plunged and interest rates rose. In 1982, President Lopez Portillo, before ending his administration defaulted on foreign debt, devalued the peso and nationalized the banking system along with other industries affected by the crisis.Although the ISI model industrial growth had occurred in previous decades, had overprotected the industry, making it uncompetitive, unprofitable and unproductive. The president of Madrid was the first to implement a series of neo-liberal reforms. After the 1982 crisis, few international organizations were willing to lend to Mexico, so that to maintain the adjusted current account balance, the government resorted to currency devaluations, which led to high inflation rates, that reached the 159.7 annually in 1987. Some effects of the policies of his administration were an increase in the deficit and domestic cr. The first step towards trade liberalization was the admission of Mexico to the GATT in 1986.
