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Reducing Economic Vulnerability in Mexico. Natural Disasters, Foreign Trade and Agriculture

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Reducing Economic Vulnerability in Mexico. Natural Disasters, Foreign Trade and Agriculture ePubWU Institutional Repository Sergio Omar Saldaña-Zorrilla Reducing economic vulnerability in Mexico. Natural disasters, foreign trade and agriculture. Thesis Original Citation: Saldaña-Zorrilla, Sergio Omar (2006) Reducing economic vulnerability in Mexico. Natural disasters, foreign trade and agriculture. Doctoral thesis, WU Vienna University of Economics and Business. This version is available at: https://epub.wu.ac.at/1936/ Available in ePubWU: October 2006 ePubWU, the institutional repository of the WU Vienna University of Economics and Business, is provided by the University Library and the IT-Services. The aim is to enable open access to the scholarly output of the WU. http://epub.wu.ac.at/ Reducing Economic Vulnerability in Mexico: Natural Disasters, Foreign Trade and Agriculture Verringerung wirtschaftlicher Vulnerabilität in Mexiko: Naturkatastrophen, Außenhandel und Landwirtschaft Eingereicht von: Sergio Omar Saldaña-Zorrilla Dissertation zur Erlangung des akademischen Grades Doktor der Sozial- und Wirtschaftswissenschaften Doctor rerum socialium oeconomicarumque (Dr.rer.soc.oec.) Fachgebiet Volkswirtschaftslehre 1. Beurteiler: O.Univ.Prof.Dkfm.Dr. Leonhard Bauer, WU-Wien 2. Beurteiler: O.Univ.Prof. Dr. Uwe Schubert, WU-Wien Externe Gutachterin: Dr. Joanne Linerooth-Bayer, IIASA Wien, im Oktober 2006 Acknowledgements The author wishes to thank the following persons and institutions for contributing to the success of this dissertation. Above all, special thanks to Dr. Joanne Linerooth-Bayer, Program Leader of the Risk and Vulnerability Program at the International Institute for Applied Systems Analysis (IIASA), who has continually supported me with her confidence, advice, and supervision since the beginning of this process; Dr. Uwe Schubert for his confidence, feedback, and guidance in preparing the dissertation; Dr. Leonhard Bauer for his encouragement in focusing on a more needs-based scientific approach. Many thanks to Dr. Krister Sandberg for the modeling we have done during the last year, which ensured the specification and econometric consistency of the models. The valuable criticism and suggestions from the following colleagues at IIASA have been decisive in writing this dissertation: Dr. Reinhard Mechler for his overall suggestions; Dr. Larry Willmore for his precise remarks on economic theory; and Dr. Georg Pflug for his constructive criticism of the statistical methods. Particularly valuable was the encouragement obtained from the World Bank and the Provention Consortium, as well as from the START-IIASA Advanced Institute on Vulnerability to Global Environmental Change, which financed the country consultations. Finally, I wish to acknowledge the support of the Departmento de Economía of the Universidad Autónoma Metropolitana-Azcapotzalco (UAM), the Centro de Ciencias de la Atmósfera of the Universidad Nacional Autónoma de Mexico (UNAM), and the municipal authorities of Cacahoatan and Escuintla for providing facilities for this research’s field work. 2 TABLE OF CONTENTS CHAPTER 1: Introduction.........................................................................................12 1.1 Methodology........................................................................................................... 12 1.2. Outline....................................................................................................................13 CHAPTER 2: A conceptual framework of economic vulnerability.............................15 2.1 Vulnerability ........................................................................................................... 15 2.2 Economic Vulnerability.......................................................................................... 17 2.2.1 Coping and adaptive capacity .............................................................................. 19 2.2.2 The cycle of economic vulnerability.................................................................... 20 2.3. Drivers of economic vulnerability ......................................................................... 21 2.3.1 Assets accumulation............................................................................................. 23 The role of assets protection in reducing poverty......................................................... 23 2.3.2 Poverty and entitlements...................................................................................... 24 Poverty .......................................................................................................................... 24 2.3.2.1 Income and Consumption measurements ......................................................... 24 2.3.2.2 Rural Poverty .................................................................................................... 25 2.3.3 Entitlements behind rural poverty........................................................................ 26 2.3.3.1 Historic land tenure: from colonial times to the post-revolution...................... 26 2.3.3.2 The rural-urban disjunctive in economic policy after the 1950s ...................... 26 2.3.3.3 Urban capacity to absorb additional workforce................................................ 27 2.3.4 Emigration as response to rural poverty .............................................................. 28 2.4 Agriculture as livelihood......................................................................................... 28 2.4.1 Off-farm activities as response to economic vulnerability .................................. 29 2.4.2 Agricultural growth and poverty reduction.......................................................... 29 2.5 Final comments....................................................................................................... 30 Appendix 2.I: The dynamic of economic vulnerability................................................ 32 CHAPTER 3: Natural hazards and economic stressors ............................................38 3.1 Historical losses from natural hazards .................................................................... 39 3.1.1 Hurricane.............................................................................................................. 39 The 2005 hurricane season........................................................................................... 40 3.1.2 Floods................................................................................................................... 41 3.1.3 Earthquake ........................................................................................................... 41 Box 3.I: Political changes after 1985: triggered or catalyzed by the Michoacan Earthquake?................................................................................................................... 43 3.1.4 Volcanoes............................................................................................................. 44 3.1.5 Droughts............................................................................................................... 45 Weather dependence of agriculture.............................................................................. 45 3.2 Hazard exposure of agriculture............................................................................... 45 3.3 Relative vulnerability of the poor........................................................................... 47 3.3.1 Coping capacity of the poor................................................................................. 47 3.3.2 High losses-high adaptability regions versus high losses-low adaptability......... 48 3.3.3 Spatial distribution of agricultural losses............................................................. 48 3.3.4 Emigration as response to disasters vulnerability in rural areas.......................... 49 3.3.4.1 Domestic migratory flows................................................................................. 50 3 3.3.4.2 International migratory flows ........................................................................... 51 3.4 Trade liberalization ................................................................................................. 51 3.4.1 Globalization and regionalization........................................................................ 51 3.4.2 Growing share of foreign trade in the economy .................................................. 52 3.4.3 Negative terms of trade........................................................................................ 53 3.4.4 NAFTA and agriculture ....................................................................................... 54 3.4.5 Unfair trade .......................................................................................................... 54 3.4.5.1 High subsidies in trade partner countries.......................................................... 54 3.4.5.2 Domestic unfairness.......................................................................................... 55 3.4.6 Increasing imports, decreasing prices in the agricultural sector.......................... 55 3.5 Conclusions............................................................................................................. 57 CHAPTER 4: Assessment of vulnerability-related programs ....................................59 4.1 Social Programs assessment ................................................................................... 59 Governmental intervention to alleviate poverty ........................................................... 59
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