Globalization and its influences upon the southern states of Mexico

The purpose of this study was to add to the extensive literature about economic globalization, but with a focus on a regional localized area of a state. Regional analysis of globalization influence on a region is necessary in order to adjust economic development according to local needs. This case study analyzed how globalization influenced the southern states of Mexico--Guerrero, Oaxaca, and Chiapas, considered the poorest region of Mexico by the World Bank. I hypothesized that economic globalization, which I define as the spread of liberal economics, helps the poor by increasing employment levels. However, this positive situation is diminished by increased vulnerability to fluctuations in the world market, thereby negatively influencing wealth generation.

The analysis focused on the Gross Domestic Product (GDP) as the primary indicator for the generation of wealth in Mexico's southern states from 1993 to 2006. Specifically, I analyzed the manufacturing industry and divisions in which the southern states should have a comparative advantage---the wood and paper industries. The liberal reforms under review were those surrounding the trade liberalization policy of the North American Free Trade Agreement (NAFTA) and its influence on wealth development in Mexico's southern region. The conclusion of the study found that the southern state's GDP percentage declined in manufacturing divisions in which the southern states should have had a comparative advantage. Instead, the southern states are shifting to low-skill and low-wage jobs as the maquiladora industry shifts garment production to the south.