The Mexican financial collapse of late-1994, indeed, took the world by surprise. Mexico had attracted a "lot of acclaim for its economic reforms of the proceeding years, largely following the US-backed model for economic development. But Mexico's new economic system showed itself to be powerless in the face of external factors beyond its control" (Naim, 1995, p. 112).
The government of Mexican President Salinas renegotiated the country's huge foreign debt, initiated economic reforms that boosted the country's prestige with the OECD countries, and negotiated entry into the North American Free Trade Agreement (NAFTA) with Canada and the United States. Naim (1995) observed that: "Mexico soon became a main beneficiary of the unprecedented surge in private capital flow, a favorite son among the 'emerging markets.' Between 1990 and 1994, Mexico became the world's second-largest recipient of foreign private
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