Debt trap: the internal one. The fiscal deficit is said to be as high as 10% of the GDP ! Many provincial governments are facing financial crunch. This has had adverse impact on the public investment which would slow down or half economic growth. There are other risks like the threat to secularism, or war with Pakistan.
-That is really a big risk. How is public spending as % of GDP in India? -And how much of this 10% deficit is result of interest payment (in Brazil -the state spends 9% of GDP and 25% of the budget to pay interests)
What about Marxist theory of economic crises?
-I´m uncertain if it can explain the long term growth rates. Those would -be the results of how each country react to the cyclical crisis, who -are usually systemic (ie., hit all the capitalist world), and how each -country takes advantage of the good times. I don´t know if marxist -ecomicts explained this well, but I´m somewhat weak in marxist theory.
What is Mexican society like in terms of inequality? What is your take on the impact of NAFTA on Mexico?
-Is a highly inequal society (I will try to get its Ginni index). Inequality -increased in the NAFTA years, while economic growth has been very unequal. -There was a devastating crisis in 1995, followed by a very fast recovery, -whith moderate growth rates from 1996-98, robust GDP growth until 2000 and -then poor growth again. However, they are doing better than the rest of Latin -America. Critics of NAFTA argue to the fact that Mexico become virtually -a US colony, while the majority of people got no benefit from the high growth -rates. I´ve been somewhat laizy on Mexico. I will study this better and send -the results to you.