Skip's Pages document
© 1998 by Skip Spitzer
Today, Mexico is in a state of crisis. Since the early 1980s, the economy has been highly unstable, almost collapsing in late 1994. Wealth from economic growth has gone mostly to a well off minority. Mexico's foreign debt remains among the largest in the world. Real wages have dropped by more than half their value. And un- and underemployment have soared.[1]
Not surprisingly, social conditions in Mexico are very severe. The majority of Mexicans live in poverty. Malnutrition, disease, and infant mortality are widespread. Public health and other social programs are rapidly disappearing.[2]
Meanwhile, avenues for popular change are cut off by Mexico's largely non-democratic political institutions. The ruling Institutional Revolutionary Party (PRI) retains its 68-year grip on power through a sophisticated system of carrots and sticks. The sticks include electoral fraud, and harassment, imprisonment, torture, and killing of members of opposition organizations and independent grassroots movements. Now armed resistance has appeared: The Zapatista Army of National Liberation (EZLN) and the Popular Revolutionary Army (EPR).[3]
What explains this crisis? As in most Third World nations, political and economic life in Mexico is dominated by a national and foreign elite pursuing their own, generally short-term, interests. Whether acting at odds or in concert, these interests generally end up creating glaring inequality and poverty, and thwarting real democracy.
Such elite and foreign domination in Mexico has existed for almost 500 years. The Spanish, despite resistance[4], decimated indigenous peoples and cultures through the spread of disease, slavery, forced resettlement, and intense exploitation. They imposed a caste system, dehumanizing people with African and indigenous features. The Spanish decreed land to Spanish settlers, and as labor was needed to work it, indigenous peoples were forced off their own land. Wealth was extracted for Spain, with little concern for the local majority.
After independence, the taking of land from the poor continued, enabling a small group of propertied elites, both inside and outside of government, to control political and economic life. New foreign powers, primarily the U.S., exerted tremendous influence, economically and militarily, for their own interests. Independence was a campaign by one elite against another, and its benefits hardly touched the poor.
Even the Mexican Revolution of 1910 failed to address elite domination. It did result in concessions to disenfranchised groups and a more nationalist posture toward foreign companies. But the national elite, under strong foreign influence, regrouped and never allowed for a fundamental redistribution of wealth and power.
Mexico has experienced periods of high growth, particularly during the 1960's and 70s. But with the wealthy able to orchestrate economic activity, they received most of the benefits of growth. By the early 1980's, changes in the global economy destabilized Mexico's short-sighted economy to the point of near default on its enormous foreign debt. Once again, the national and foreign elite sought to advance their own interests, fueling crisis rather than addressing it.[5]
To best understand Mexico's debt crisis and where Mexico stands today, it pays to take a quick look at a couple of terms you've probably heard: globalization and neoliberalism.
Globalization refers to the growth of large corporations that operate internationally. As companies become more international in scope, they are free to move operations quickly from country to country based on local conditions, greatly enhancing their power against local governments, businesses, and workers.[6] Globalization also refers to the aggressive support of global firms by the Western industrialized nations and the global institutions that they essentially control, such as the International Monetary Fund (IMF) and the World Bank.[7]
Most recently, this support of transnational corporations by Western power players has taken the form of neoliberal policies. Neoliberalism refers to an extreme reliance on the "free market" for creating prosperity, subordinating most other concerns to its demands. This means policies to:
Privatize publicly-owned resources and enterprises
Severely reduce government regulation of trade, investment, labor, health and safety, and the environment
Slash government spending, especially social services
Devalue the currency (to make exports more attractive)
Weaken labor and other popular movements (to make wages "competitive")
In practice, of course, neoliberal policy is not really about free markets, but about creating the conditions advantageous to large private interests.
Neoliberal policies are literally imposed on Third World governments. This is done through conditioning multi- and bi-lateral foreign aid, so-called free trade agreements (such as NAFTA and GATT[8]), diplomatic influence and deal-making, training programs, and by military support and intervention--all geared toward creating conditions highly favorable to private business.[9]
When Mexico found itself unable to make payments on its suffocating foreign debt, it found debt-restructuring loans available from the IMF only on condition that it adopt its neoliberal economic "restructuring" program. The technocrats within the PRI, already oriented toward neoliberal thinking, fully embraced that program, making Mexico the "poster-nation" of IMF structural adjustment.
Yet, although the carrots offered to large business have resulted in periods
of investment and growth, the overall affect of neoliberal adjustment has been
crisis. Privatization, deregulation, government cutbacks, devaluation, and the
assault on labor have created greater foreign debt, unprecedented foreign
ownership of the economy, tremendous economic instability, staggering inequality,
a domestic market too weak to sustain economic growth, widespread poverty, and
deep social unrest. Neoliberalism is just the latest case of national and global
elites controlling Mexico for their own benefit.[10]
|
We have nothing to lose, absolutely nothing, no decent roof over our
heads, no land, no work, poor health, no food, no education, no right
to freely and democratically choose our leaders, no independence from
foreign interests, and no justice for ourselves or our children. But
we say enough is enough! |
The crisis in Mexico touches the vast majority of Mexicans, but it also hits home in many ways. The same mobility of corporations that leads to sweatshops and poverty in Mexico, causes factory closings, unemployment, and depressed wages in the U.S. The slashing of government regulation in Mexico is very similar to the current rollback of laws regulating U.S. businesses. The greed and political corruption that lead to drug trafficking in Mexico lands crack and other devastating drugs on the streets of the U.S. Mexican poverty drives the growth of poor communities of Mexicans in the U.S. The rape of the environment in Mexico is part of the same system that is destroying land, water, and air at home. And the social conditions that lead to the Zapatista uprising and EPR campaigns propel a growing U.S. military involvement, further diverting your tax dollars from programs providing job training, regulating commerce, protecting the environment, and other vital needs in the U.S. A protracted guerrilla war in Mexico would likely involve dead soldiers on both sides of the border.
Despite the severity of the crisis in Mexico, there is much that we can do about it. In fact, the increasing connections between problems in Mexico and at home provide a growing basis for international solidarity and alliance-building.[11]
Mexicans are mobilizing: in neighborhood organizations, networks of debt-burdened small farm and business owners, independent unions, human rights and environmental groups, indigenous congresses, and campesino alliances.
There are also groups in the U.S. making a difference. Unions are forming alliances with Mexican labor. Other groups are raising awareness about Mexico, providing material and financial aid, agitating for human and civil rights, and lobbying for a foreign policy toward Mexico based on concern for social justice. Still others are placing people in Mexico to work directly with the popular movements.
This work is done by people like you! It's part of a joining of hands to work toward a future of justice, peace with dignity, and environmental sustainability throughout North America.
For more information, or to learn about specific ways you can help, please contact:
Santa Cruz Committee for Democracy in Mexico
(408) 426-2292
(408) 423-1626
[1] In 1992, the
richest 20% of the population received 54.2% of national income. The income
of the poorest 20 was 4.3%. ("Structural Adjustment and the Spreading Crisis
In Latin America", October 1995, The Development GAP, Washington, D.C.)
Mexico's foreign debt is conservatively calculated to be $110 - 120 billion. (Doug Henwood, June 1994, Left Business Observer #64.)
Official government figures show the minimum wage lost 53 percent of its purchasing power between 1982 and 1988, another 28 percent from 1988 to 1994, and an additional 13 percent during only the first four months of 1995. ("Structural Adjustment and the Spreading Crisis In Latin America", October 1995, The Development GAP, Washington, D.C.)
Estimates of real unemployment rates run between 25 to 50%. (Doug Henwood, June 1994, Left Business Observer #64.) The government only measures urban unemployment.
As in much of world, environmental considerations in Mexico are largely absent from public policy and business decisions. Visitors to Mexico City can see this by simply breathing the air.
[2] According to a 1992 study commissioned by the government's primary anti-poverty agency, Pronasol, about one half of all Mexicans lived in poverty in 1990 (42 million) and 18 million lived in conditions of extreme poverty. The study goes on to say that "... if the poverty figures are frightening, their consequences should be even more frightening... Malnutrition has become the normal condition of society..." In Mexico, 30,000 children under age one die each year. ("Structural Adjustment and the Spreading Crisis In Latin America", October 1995, The Development GAP, Washington, D.C.)
With Mexican interest rates over 80%, even those previously relatively well off are facing an explosion of foreclosures on homes, automobiles and small businesses. (Public Citizen's Global Trade Watch report, 1996, "NAFTA's Broken Promises: Real Life Evidence of NAFTA's Failure," Public Citizen, Washington, D.C.)
[3] A recent report on human rights in Mexico by Amnesty International said that "decades of pervasive human rights violations in Mexico are continuing today, fueled by the virtual impunity for the violators." Such violations include: torture, forced confession, extrajudicial executions, investigatory irregularities, and harassment against individuals and local non-governmental organizations working for change. (Amnesty International News Service, AI INDEX: AMR 41/31/95, International Secretariat of Amnesty International, London.)
The Zapatistas are a widely popular indigenous organization that burst on the scene in early 1994 by seizing 6 cities in the southern state of Chiapas. The EPR began visible guerrilla actions in June of 1996 throughout southern and central Mexico.
[4] The Spanish had to completely destroy Tenochtitlán, today Mexico City, to conquer the Aztecs there. Prominent cases of indigenous rebellion include those of the Huastecans, the Mayans, the Mixtons, the Indians of Tehuántepec and Hidalgo, and the Yaquis. (James D. Cockcroft, "Mexico" in Ronald Chilcote and Joel Edelstein, eds., Latin America: The struggle with Dependency and Beyond, 1983, Halsted Press.)
[5] The 1960's and 70's were a period of high, government-assisted growth throughout Latin America. The 1979 OPEC oil price increases and recession in industrial countries, however, lead to a drop in the prices of many Third World exports, shrinking Latin American nations' reserves of hard currencies and making it extremely difficult for them to service their foreign debts.
That debt has its origins in the 1970s, when billions of dollars of "petro-dollars" stemming from the OPEC cartel found its way into large banks. The banks, needing borrowers to cash in on their bulging reserves, aggressively pushed loans to Third World governments for grandiose infrastructure projects during a time of sustained, but soon-to-end growth.
Mexico was the first nation, in 1982, that couldn't service its debt, causing the "debt crisis" and the era of structural adjustment.
[6] More technically, globalization refers to the way in which transnationals, rather than simply having international business relationships, actually spread their production processes across borders. This means that capital becomes concentrated within corporations, but not necessarily nations. The global economy becomes more integrated. The role of the market in international economic relations is reduced because much of that activity is within parts of the same transnationals (between parent and subsidiary, for example). There is an homogenization of production techniques, products, and thus consumption patterns. In some ways, the state looses control of such corporations. Although this internationalization began in the middle of the 20th century, it is starting to characterize the global economy. See Rhys Jenkins, Transnational Corporations and Uneven Development: The Internationalization of Capital and the Third World, 1987, Methuen.
[7] Member nations' voting power on loans, leadership, and other pivotal decisions in these lending agencies is proportional to member contributions. This has enabled the U.S. to buy de facto control over them.
[8] NAFTA, the North American Free Trade Agreement, is a 1993 trade agreement between the U.S., Canada, and Mexico designed to reduce government restrictions on corporations. Although NAFTA's proponents promised more jobs, higher wages, better environmental and health conditions, and improved relations with Mexico, none of these have occurred. Citing NAFTA as their "death warrant," the Zapatista's timed their uprising to coincide precisely with its January 1, 1994 implementation date. See Public Citizen's Global Trade Watch report, 1996, "NAFTA's Broken Promises: Real Life Evidence of NAFTA's Failure," Public Citizen, Washington, D.C.
GATT, the General Agreement on Tariffs and Trade, is an international agency that provides the major framework for negotiating agreements on international trade. Like NAFTA, the recent GATT agreement removes restrictions on corporations. GATT is much more far-reaching, however, and impacts a larger range of non-trade policies through tenuous connections to trade.
[9] Prior to neoliberalism, international support of big capital took the form of the Cold War doctrine of Containment. The idea was to "contain" the spread of socialist and nationalist nations in the Third World. On the one hand, this was carried out by devastating campaigns of destabilization, terrorism and counterrevolution. On the other, it was pursued by encouraging half-hearted efforts at development in nations respecting the rules of international profit-making, regardless of their respect for democracy and human rights, in order to prevent socialist and nationalist social movements. The transition to neoliberalism's greater market purity came about as the Third World's periodic restricting of foreign businesses in favor or national industry became increasingly intolerable. In Mexico, this tightening up on foreign firms occurred primarily in the pharmaceutical industry.
The "liberalism" in the term "neoliberalism" has to do with loosening up economic decision-making, removing it from the domain of government planning, and leaving it primarily to market forces. Classic liberalism marks the policies of the 19th century colonial powers, who used the ideology of competition, free trade, and comparative advantage to justify their control of Third World societies. Neoliberalism refers to today's new liberalism.
[10] Grassroots activism in Mexico is often specifically focused against neoliberalism. In 1996, the Zapatistas held an international forum on neoliberalism, the Intercontinental Encounter for Humanity and against Neoliberalism, in La Realidad, Chiapas.
[11] Interestingly, one feature of globalization and neoliberalism is that governments, in shrinking their roles, are less able to respond to the crises they help to create. This could hasten the end of the PRI, creating an opening for popular rule in Mexico.
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