In the 1990s Mexico was one of the world's most successful countries in attracting FDI. This chapter examines the extent of this process and its effects on the Mexican economy. I provide an overview of Mexican FDI since the early 1990s, identify the factors that led to FDI inflows, and describe the effects of FDI in terms of output, employment, trade and R&D expenditures, among other variables. Specifically, I analyze these effects using newly available data on the industry level. Finally, I make several policy proposals aimed at improving both the quantity and quality of FDI in the future.

The chapter is divided into four sections. The first briefly outlines theories of FDI and development, including an overview of the literature on the impacts of FDI in Mexico. The second section highlights the main trends in Mexican FDI since the 1990s from an aggregate perspective, as well as some major sectoral tendencies. The third section analyzes the effects of FDI in Mexico's manufacturing sector at the industry level, considering more than 25 variables. The final section outlines the main conclusions and presents various policy proposals.

Brief Conceptual Background

The debate on the determinants of FDI and its effects is still unsettled. The current process of globalization—the opening of national economies, the growing role played by multinational corporations and the increasing transfer of segments of the production chain outside these corporations' home countries-has promoted the growth of global FDI flows (UNCTAD 2006).

‘This is the deal.’ ‘The deal?’ ‘The deal is this.’ I'm being offered something special in a garage, but since they have my car already and it has clunks and clicks it didn't have before I took it in to be serviced last week, I'm trapped. Dialogue in garages between mechanic and customer looks like ‘ideal speech’ (images of transparent open direct and genuine communication that are described by the German social theorist Jurgen Habermas), but I feel like I'm in a David Mamet play (tales of layers of contricks; think of the films The Water Engine or The Spanish Prisoner, for example). Suddenly I'm lacking something serious, and the person who makes this clear to me is the only one who can put it right. The guy behind the counter is telling me that he wouldn't be able to sleep at night if he let me take the car on the road unsafe. He seems to believe it. He looks at me, reaches for his pen and draws another diagram of ‘tracking levers’ and ‘rear bushes’. Of course, he's not sure if this bit is causing the problem, and he can't guarantee that a new one will stop the noise. He reminds me that I don't want to take my car away from them with noises it didn't have before and that I really don't want to spend my hard-earned money on the car and have things end up worse.

With the collapse of Nazi Germany, Kathe Kollwitz and Bertolt Brecht's country was divided into two, East and West. Partition, then, was either the outcome of a full war or it could also be caused by the war-like disposition of two groups and their animal brutality proceeding hand in hand with pernicious politics –; for example, the partition of Bengal and Punjab. Partition, again, could foment an exodus of two kinds. One, single or collective efforts, frantic and despairing, to cross over barbed wires as depicted by Margarethe von Trota in her film Alexzanderplatzor; massive, multitudinous transfers of population associated with trauma and terror as recorded by Ritwik Ghatak, S M Sathyu, Govind Nihalni and Nemai Ghosh in their films. Taken together, war and partition in this century prompted massive migrations, which dehumanized millions. Adil Mansuri singled out the individual, broken and battered, as the microcosmic victim of the entire process in his poem When the injured Sun opened his Eyes:

Federico Fellini's (born 1920) fantasy world, which has become more dreamlike over the years, shows us the spectacle of life. Yet, paradoxically, the most surreal of Italian directors invites us to reflect on reality.

What is this reality, which contains everything that happens? Where is it? In us? Outside of us? In our memory, which turns into myth? In the real events that seem like dreams or in dreams that materialize in an immense farce wherein existence is the tragicomic appearance? Like Pirandello before him, Fellini meditates on the ease with which we cross the borders that supposedly mark the difference between reality and appearance.

As in the 1987 film Intervista [The Interview], which he made for Italian television, Fellini identifies a film director with the demiurge of a Great Spectacle. “My films are not for understanding. They are for seeing,” Fellini reminds anyone who persists in undervaluing the aim of his aesthetic orientation.

I talked about this and other things with Fellini in his Rome studio sometime after his last film, La Voce della Luna [The Voice of the Moon] (1990). Courteous, cordial, gifted with a good sense of humor, Fellini, who is mistrustful of journalists–and who loves paradox and ambiguity–kindly tried not to talk about this mistrust. “Really, we should chat about other things,” he told me.

Interview

Art, whether in a gallery or recruited into advertising, provides another medium of representation through which we might be confronted, and confront ourselves, with the truth, even if we may never be able to put it into words. The shock of recognition, the uncanny sense that an image is familiar to us even if we cannot remember seeing it before, the experience of a sensation that we cannot even account for to ourselves, is something an artwork can produce. This art practice, so pervasive now in various sign systems designed to sell us something, sometimes sidesteps the ego, and something of the unconscious is made present; but then we need to ask ourselves, when we are in the presence of such images, whether we will put those impressions at a safe distance – assume that it is the unconscious of the artist that erupts in the work – or own up to what lies, and for a moment speaks the truth, within us as we view it.

So, what would it mean to turn around and think reflexively about ourselves so that we include the image we actually have of ourselves in the myriad of idealised images of ourselves in commodity culture, in a culture suffused with psychoanalysis? What would happen if we deliberately bought into the idealised images of self that surround us and agreed to ‘make love to our ego’? A first response to this could be that we would then be wallowing in the culture of narcissism, taking as our object this seat of illusions and feeding it.

I was in a small workgroup, the kind of group that in Lacanian jargon is known as a ‘cartel’, and our focus was upon what a group, what a ‘cartel’ was for Lacan. One of the texts we read was Lacan's only theoretical account of groups in which he describes the predicament of three prisoners, each of whom has to puzzle over whether the warden has placed a white or black disc on their backs. The prisoners have to reason out how they have been marked from what they see other two prisoners wearing, and how they see the other two respond to the disc they cannot see on their own back. Someone in our little group argued that there might be some connection between the concluding moment when each prisoner declares ‘I am white’ and the ‘othering’ of blacks that constitutes everyday racism in Western culture. No, surely not. That connection would be tendentious, but then again…

A woman at Manchester Piccadilly station was handing out life insurance advertisements; I dodged briskly around and behind her and through to the platforms, but not too quick to notice the movement of her arm, which had been thrusting leaflets at the passengers passing on the other side, waver for a moment as an orthodox Jewish man went by.

Introduction

This chapter examines the environmental impacts of FDI in the forestry sector in two of the region's major producing countries, Chile and Brazil. One of the characteristics of the world economy over the last two decades has been the strong growth in FDI flows. More and more companies, in an increasing number of economic sectors and countries, now invest beyond the borders of their home countries; meanwhile, the governments of receiving countries are competing more and more to attract foreign investment.

By 2005, about a third of the stock of global FDI has gone to developing countries. Latin America accounts for 10 percent of the global FDI stock. Three countries, Brazil, Argentina and Chile, attracted 82 percent of FDI flows into the region between 1990 and 2002.

The economic benefits of FDI include technological innovation, increases in competitiveness, improvements in efficiency and transfers of intangible resources such as new forms of organization, administration and marketing.

Expectations regarding the environmental impacts of FDI are rather mixed. On the one hand, some argue that FDI brings negative environmental impacts, especially in developing countries that have lower environmental standards and could constitute “pollution havens.” On the other hand, some claim that foreign firms help to improve environmental performance in developing countries by transferring both cleaner technology and management expertise in controlling environmental impacts.

The screaming engine is pushing the long-tailed boat against the powerful current and whirlpools of the Salween River. A few miles ahead, a Burmese military post is set on the heights of a grey sand beach. The boat slows down. […] Hardly 48 hours earlier the 39-year-old American had been kissing his wife Suzan and their three children goodbye as he prepared to set off on a long and boring 30 hour journey. Leaving his dental practice and his middle-class house in Mandeville, Louisiana behind, his first of several flights took him to San Francisco, en route to this remote corner of Asia. […]

When he arrived at Bangkok's Don Muang International Airport, intrigued customs officers spent three hours searching his aluminum cases and bags filled with medical equipment. ‘They asked me if I was doing business. I told them it was for a humanitarian mission, so they let me go’, he recalls. What Allison conveniently forgot to mention was that the mission would be organized in Burma after illegally crossing the Thai border. […] The next morning, after a night on the sand on the right bank of the Salween, the expedition including nurses, medics and guerrillas, as well as about 30 porters loaded with medical equipment and medicines entered a labyrinth of paths into the jungle.

Most directors at Cannes you can meet at their hotels lining the boardwalk for a Perrier and an interview. Not Lars von Trier (born 1956), the director of such disturbing films as Europa (1991), Dancer in the Dark (2000), and Dogville (2003). For the 2005 Cannes Film Festival, von Trier had sequestered himself in Antibes, far from the maddening crowds, at the exclusive Hotel Cap perched atop a nature reserve. As my taxi rounded the cliffs, the sky turned gray and mist floated on the waves, rather like the empty landscape of von Trier's own movie, Breaking the Waves (1996). A lone tornado ripped across the water. The taxi dropped me into total silence–except for the twittering of birds–and on the mowed slopes to von Trier's private cabana, there on a path rounding the sea, I came upon the director himself, walking calmly alone in his white suit and white beard, looking like the gentle proprietor of a great plantation. After all, his newest film at the time, Manderlay, a scathing critique of racism in the United States, takes place on one.

Von Trier is a lot more gentle than one might expect from a man with the reputation for terrorizing his actresses. A small man, with a twinkle in his eye, he is quick to tilt his head and mumble a response, no matter what you ask–and what usually comes out of his mouth seems to surprise both him and the journalist.

Introduction

During the third wave of democratization in the 1980s and 1990s, most of the countries in Latin America made transitions from military dictatorship to electoral democracies. Most of the newly elected governments were right wing–neoconservatives or neoliberals–and chose to develop or maintain elite democracy and the hegemony of neoliberal economic policies, and were less concerned with social reforms. The business elite and the dominant domestic and international actors, with a few exceptions, accepted the outcome of electoral democracy, mainly because the threat of the radical left had vanished, because of poor economic performances, and because the economic elite had been excluded from politics during the military dictatorships. Further, it would decrease the demand of people's expectation of deepening democracy and carrying out social reforms, and it would give economic prosperity and a peaceful future.

However, this global development of democracy and neoliberalism has some paradoxes in Latin America. On one hand, democracy has enlarged the right to vote to all adults in free and fair elections, including groups that were excluded from politics during military rule, such as radical leftist parties. On the other hand, democratically elected governments do not function in the same way as “normal” democratic governments are supposed to function. In the Latinobarómetro poll (2002), more than sixty percent of the people were discontented because of the failure of the governments, political leaders, political parties and the political institutions' ability to provide needs such as jobs, education and security.