In 2006, the Economist newspaper declared in a survey of Mexico that it was “time to wake up”, meaning that reforms in the energy sector (oil and electricity) must resume to set the economy free by making the most of the North American Free Trade Agreement (NAFTA) [see November 18, 2006]. Further, as the old political model had died with the defeat of the Partido Revolucionario Institucional (PRI) it was time for a new one to be born and time, also, for the real president in Felipe Calderón of the Partido Acción Nacional (PAN), to stand up. That was 2006. In 2012, the Economist offers us its latest survey of Mexico. Now the country is on the rise and “going up” in the world following the election of Enrique Peña Nieto of the PRI with the agenda to be set by further economic restructuring in, yes, the energy sector [see November 24, 2012]. So what has changed and how can one assess the major transformations shaping Latin America’s second largest economy?
The 2006 report included in its analysis a focus on ‘Mexico’s mezzogiorno’, or the gaping north-south divide shaping inequality and poverty in the country. This refers to the nine states of the south and south-east of the country (Chiapas, Campeche, Yucatán, Quintana Roo, Tabasco, Oaxaca, Guerrero, Veracruz, Puebla), which account for almost a quarter of Mexico’s total area and population that are still more rural, indigenous, and poorer than the rest of the country. According to the Economist, almost 45 per cent of the population in these southern states live in settlements of less than 2,500 people, compared with 20 per cent elsewhere across the country, twice as many people lack electricity, and half as many can read and write. These circumstances of uneven development are in stark contrast to the presence of urban growth in regional clusters in the northern border-states (Baja California Norte, Sonora, Chihuahua, Coahuila, Nuevo León, Tamaulipas). As the survey concludes:
In Ciudad Juárez, across the border from El Paso, industrial parks, shopping malls and brand-new housing estates in faux-colonial style stretch out endlessly into the Chihuahua desert. Monterrey, the industrial hub of north-east Mexico, has become a handsome North American city of swirling freeways and glass office blocks, just the place to hold international conferences . . . It is time for the government to sweep away the remnants of crony capitalism, set the economy free and liberate the south from backwardness.
However, since the Economist’s demand that it was “time for the real president to stand up” and for Calderón to embrace boldness, the latter unleashed the ‘war on drugs’ in Mexico. This has led to some estimated 60,000 deaths, the deployment of 50,000 Mexican troops and federal police in the field and 10,000 troops alone in Ciudad Juárez, known as ‘Mexico’s murder capital’, with the violence reaching cities such as Torreón, Michoacán, Monterrey (that ‘handsome city’) and Cuernavaca (see ‘The War on Drugs in Mexico’). In 2008 the passage of the Mérida Initiative led to the announced funnelling of $1.4 billion in US aid over three years to quell the rise in drug-related violence.
All in all, that is one form of boldness.
Uncommented on in this report is the electoral fraud that led to Calderón’s victory by an official margin of 0.56 per cent, or no more than 238,000 votes, against the candidacy of Andrés Manuel López Obrador of the Partido de la Revolución Democratica (PRD). Widespread accord on the evidence of electoral fraud has highlighted the double-counting of pro-Calderón precincts, collusion between PRI and PAN governors, and highly suspect processes of political corruption charged against the Federal Electoral Institute (IFE) and suspect processes of electoral review conducted by the Federal Electoral Tribunal (TRIFE) as the supreme electoral authority.
The 2012 report now hails the PRI’s Enrique Peña Nieto as the figure who ‘won a clear electoral victory’ by 6.8 per cent against, again, Andrés Manuel López Obrador. Although scant attention is given in the report to the claims of electoral fraud, there has been clear evidence of vote-buying arranged by the PRI through the distribution of chainstore ‘Soriana’ debit cards to the sum of £33.3 million and evidence of PRI expenditures exceeding legal limits. Then there is Peña Nieto’s dependency on the favourable coverage granted him by mass media groups such as Televisa, which is a relationship he forged in his days as governor of the State of Mexico. Very little is also made by the Economist of the student movement #YoSoy132 that rose up to contest Peña Nieto’s electoral campaign and demand democratisation of the media, as detailed in a recent issue of NACLA Report on the Americas and covered frequently throughout this blog. An unfamiliar path of resistance is being charted by the movement, including the holding of a National Convention Against the Imposition of the election as well as planned protests and strikes to block the inauguration of Peña Nieto on 1 December.
Despite all this, reading like some sort of advertisement, Mexico is regarded by the Economist to be on “the rise”, especially as it’s labour costs have shifted closer to China. In 2000 it cost just $0.32 an hour to employ a Chinese manufacturing worker, compared to $1.51 in Mexico. By 2011, the cost of Chinese labour had quintupled to $1.63, compared to $2.10 in Mexico. This means that the minimum wage in Shanghai and Qingdao is now higher than in Mexico City and Monterrey with cheaper transportation costs, favourable tariffs, opening financial credit, and a looming oil boom adding to Mexico’s attraction for foreign capital. With plants in Cuernavaca and Aguascalientes, the Japanese car giant Nissan will soon be producing a car nearly every 30 seconds in Mexico. Meanwhile, in nearby Guanajuato, Mazda and Honda are building factories and in Puebla Audi is constructing a $1.3 billion plant. Mexico is the world’s fourth-biggest auto exporter soon to be producing some 4 million vehicles.
Lurking behind this glitzy façade, though, is the approval of radical labour law reforms that enables firms to hire and fire workers more easily, that aims to shorten labour disputes, and converts the minimum wage from an hourly to a daily rate. Productivity and competitiveness might increase but even though a full attack on unions was offset, labour will be exploited to the full in order to fulfil such “modernisation”. As detailed in The New York Times, there is ‘a strong push to “modernise” trade deals, speed up or add new crossings at the border for commerce, court foreign investment to take advantage of vast, newly discovered shale gas fields near the United States border and generate more quality jobs’.
Yet the bigger picture here is linked to the earlier moves by Calderón to privatise the electrical system and energy sectors in Mexico as an extension of neoliberalisation, which gained increased opposition from the Mexican Electricians’ Union (SME) and factions within the General Union of Mexican Electrical Workers (SUTERM). Such labour activism was at the centre of forming the Front Against Privatisation of the petroleum and electric power industries in order to articulate a more significant demonstration of wider democratic struggle in Mexico. This focus became highly significant following Calderón’s decree to coercively liquidate the state-owned Compañía Luz y Fuerza del Centro (LyFC), in October 2009, seize its facilities with federal police, and sack 44,000 workers of the militant SME in an attempt to weaken the power of organised labour and establish a new round of investor growth in the energy sector, while leading to general strike mobilisations by the SME facing a struggle for its survival. Further energy reform is now on the agenda in Mexico with Pemex, the state-run oil and gas company, targeted for privatisation in order to unleash exploration of the 30 billion barrels of oil under the Gulf of Mexico and compete with Brazil’s Petrobras.
The sanguine view of the Economist – once dismissed quite nicely by Nikolai Bukharin as ‘the organ of the English financiers’ – is that Mexico is “going up” as its economy grows faster than Brazil’s in both 2011 and 2012.
Meanwhile, the price will be paid by ever more super-exploited Mexican labour backed up by the armour of coercion in terms of vote rigging, authoritarianism, and corruption. Whether the #YoSoy132 democratising movement and wider labour struggles can challenge this and reclaim spaces for anti-capitalist struggle and “unite the contingent” remains to be seen.