Despite President Miguel de la Madrid’s laudable efforts to diversify exports, petroleum remains—and is likely to continue as—a vital source of foreign exchange for Mexico as its leaders attempt to replace a growth model keyed to import substitution in a state-dominated economy with one that emphasizes market forces. The daunting challenge posed by this transition accentuates the need for a book conceived to (1) address the “implications” of the oil sector for Mexico’s future, (2) examine whether the “political system show[s] signs of strain,” and (3) discuss how “this U.S. trading partner and neighbor [will] fare in the future?”

Regretfully, Petroleum and Mexico’s Future fails to accomplish the goals that Falk sets forth. To begin with, only three of the seven chapters (those by Mario Ramón Beteta, Edward L. Morse, and René Villarreal) focus on oil. Beteta’s contribution is a rehash of his 1985 annual report as director-general of Petróleos Mexicanos (PEMEX), the state oil monopoly. He does offer insights into oil’s unique place in his country’s revolutionary tradition. “In present-day Mexico,” Beteta writes, “PEMEX safeguards one of the most precious of our natural resources, because … it also lies at the heart of our independence.” However, he dwells on extraction levels, refinery expansions, and numbers of exploration rigs, rather than zeroing in on questions critical to the industry’s well-being, namely: Have budget cuts impaired exploration and PEMEX’s production potential? Why did de la Madrid, who ran on an anticorruption program, capitulate to the venal Oil Workers Union? Does Mexico plan to launch downstream activities in Europe, the United States, or Japan?

The most provocative chapter is that written by former State Department official Edward L. Morse. He criticizes Mexico’s cooperation with OPEC as providing “neither the advantages of membership nor those of true independence.” In lieu of a “follow-the-leader” strategy, Morse urges Mexico to emulate the United Kingdom and Norway and gradually boost output. Such a “Mexico-first” demarche, which would maximize earnings, depends on capital investments in new exploration and production projects. This approach also hinges on a willingness to break ranks with other exporters—a move for which there is little support, as evidenced by Mexico’s active participation in the April 1988 OPEC-non-OPEC parlays in Geneva.

By far the most rigorous contribution to the volume is Alan J. Stoga’s chapter, “Mexico: Is There Life After Debt?” Although little concerned with oil, Stoga compellingly argues that, in attempting to change dramatically the orientation of Mexico’s economy, “fiscal policy remains far too lax, shifting too much of the adjustment burden to the monetary and exchange rate side and forcing the private sector once again to bear a disproportionate share of the costs of stabilization.” In addition, Stoga laments the absence of a U.S. -Mexican political framework in which trade, debt, growth, migration, investment, drugs, etc. could be “addressed as part of an integrated whole.” Still, the U.S. Congress’s Mexico-bashing over narcotics in the spring of 1988 raises doubts about linkage arrangements, for tensions in one area (drugs) could hugely impede progress in other fields (trade, energy, debt).