Wasted Potential: The Underdevelopment of Extractive and Labour Industries in Mexico and South Africa
International development strategies have been highly contested by policymakers and scholars alike. To this day, governments around the world are faced with the task of choosing policies that will ensure their countries economic development needs are met. In this paper, I give an overview of an economic policy that was popularized in the 1990's by International Financial Institutions based in the United States, Neoliberalism. In particular, I examine how neoliberal economic policies have impacted Mexico and South Africa, two countries whose abundance in natural resources give them the potential for economic prosperity. However, I find that this is not the case. Neoliberal trade and fiscal policies in both countries resulted in stagnant economic development alongside an increase in wealth inequalities rather than an increase in economic growth and employment. I find that many factors shaped this outcome, such as problematic trade dependency, weak state institutions and a lack of economic policies that directly targeted industries whose productive capacity decreased due to liberalization. Therefore, I present the argument that neoliberalism harmed the sustainable development of both Mexico and South Africa's economy. To this day, the two states have yet to reach the growth rate neoliberal economic policy promised them.
