[David Barkin is professor of economics at the Autonomous Metropolitan University, Mexico City, Irene Ortitz is the co- author of Asi es Pues: Trabajadors Domesticas de Cuernavaca. Fred Rosen is editor of NACLA Report on the Americas.]
"Deep down, we don't want to bankrupt the system," says Jose Maria Imaz to a small press conference in New York City, "but if it comes down to it, we will have to keep our word." Imaz, the dapper-looking director of a Mexican small-business group called the National Entrepreneurial Alliance, spent this past November in New York and Washington, meeting with officials of the leading brokerages doing business in Mexico, representatives of the International Monetary Fund (IMF), key anti-NAFTA congresspeople and members of a wide range of Washington think tanks. He had come to the seats of power to negotiate on behalf of Mexico's powerful debtor's movement, El Barzon, which has made itself so independent of the country's ruling Institutional Revolutionary Party (PRI), that it has become the first major opposition group since the days of the Mexican revolution to negotiate with foreign powers about Mexico's future.
A reporter asks Imaz why a middle-class, self-described middle-of-the-road businessman like himself would threaten to shut down his country's financial system? And why would his organization of debt-ridden property owners send him to another country to carry on negotiations? For the barzonista, these are not difficult questions to answer. He is angry because small and medium property owners like himself, despite their "natural" conservatism, have been decimated by the economic restructuring of the past 15 years. And his organization sent him abroad because real economic--and therefore political--power in the country has accrued to transnational corporations, U.S. portfolio investors, international financial institutions and the U.S. government- -all of whose representatives can most easily be found in New York and Washington.
His trip was motivated by a ruling handed down by the fifth circuit federal tribunal of Mexicali, Baja California. On October 30, the court ruled that Mexico's ten largest banks had been illegally constituted when privatized in 1990 by then-president Carlos Salinas and thus had no "legal existence." Salinas, in effect, had decreed the bank privatizations after the expiration of a 360-day limit established by the Mexican Congress, leading the court to declare that the privatization decrees were "extemporaneous." If the banks have no legal existence, then neither, of course, do the debts owed to them, and on the basis of the ruling, El Barzon is filing for the dismissal of all court proceedings initiated by the banks to enforce the collection of past-due debts. Imaz was in town with one big bargaining chip: Help us restructure the internal debt so that it is payable, and we won't close down the system by legally refusing to make payments on all bank debt.2
The court's ruling may be based on a technicality, but it highlights the overlay of neoliberal economic restructuring on the traditional corruption of the PRI. The airing of the issue will be somewhat uncomfortable for the Mexican government since the privatization process involved the substantial enrichment of still-powerful priistas. Barzon advisor Carlos Marichal, an economic historian at the Colegio de Mexico, says that technicality or no technicality, the banks and the government are taking the situation very seriously. "They are terrified," says Marichal. "The banks have hired some big legal guns, and knowing the Mexican legal system, they will probably get some favorable ruling, but only after hard political negotiations."3 El Barzon's international-level negotiations seek to convince the brokerages and lending agencies to opt for social and financial stability--and to pressure the Mexican banks to do the same.
Nearly half the bank debt in Mexico is overdue, and much of it is unpayable. The government has kept the banks afloat with a series of "debtor-aid" plans, but the deeply indebted small farmers and entrepreneurs who make up El Barzon claim that these plans have used public money to bail out the banks--and their well-connected owners--while doing nothing to alleviate the burden on the debtors. "Now we want the banks to get us back on our feet," Imaz told Salomon Brothers. "We want them to let us pay what we can afford." El Barzon wants the government to nationalize some 300,000 mortgages which, explains advisor Marichal, would be held by a state housing agency. "That way the government would get points for the 1997 local elections and also resolve part of the problem of the money advanced to the banks to save them. The banks would simply keep the money and the government would keep the mortgages and charge at a lower rate. But the banks are stupid and avaricious, and the fight will be tremendous."4
The brokerages and lenders were dubious when Imaz called, but none refused the soft-spoken businessman a meeting. Such is the power of Mexico's large popular-cooperative movement.. It is also a sign of the delicacy of the issue. The privatized banks--and the semi-autonomous central bank--are meant to efficiently manage the flows of private international capital that are the driving forces of the new Mexican economy. Yet the faltering national banking system has never been up to the task. Indeed, the Latin American banking systems have been called the "Achilles' heel of the global economy today" by IMF Managing Director, Michel Camdessus, whose institution is clearly worried about the disruptive power of the Mexican debtors.5 The savvy Barzonistas, fighting for their own survival, had found their opponents' weak point.
A hundred miles and cultural light years removed from Jose Imaz's offices in the comfortable Tlalpan district of Mexico City, at an agricultural training center in Mexico's rugged Eastern Sierra Madre, another sign of political transformation--and another fight for survival--can be found. Professor Benjamin Berlanga, a middle-aged veteran of three decades of radical struggles, teaches his young campesino students why communities like the one in which they live-- communities in which perhaps 20 million Mexicans earn their living and make their homes--have become unlivable. In 1982, Berlanga, along with several colleagues--many from a feminist umbrella group that works with poor women in the countryside- -founded a school called the Center for Rural Training and Development (Cesder). Cesder, with the expressed aim of allowing campesinos to remain on the land, teaches techniques of land management and small-scale craft production and marketing. This goal--rebuilding an independent campesino economy and community--runs directly counter to the IMF, World Bank and Mexican government policies which call for the development of larger, more profitable enterprises on the land. Successive local governments, who see the modest endeavors of Cesder graduates as threatening, have tried to shut the center down.6
"The relations that campesinos in a community like this have with nature is precarious," the professor tells his students, "because of the fragile conditions of the ecosystems--poor hillside lands, little rain, accelerated processes of erosion and deforestation. The Tmodern' propositions and technologies are useless for this kind of land, and the campesinos have lost the technologies that had served them for centuries. This leads to precarious productivity--a little corn, a little beans, and it all stays in the community. And it's like the lottery. One year there's plenty, the next year nothing. There's not enough land or capital to produce even for self sufficiency. The relationship with nature is jodido [screwed]."
Berlanga, lecturing to a class of entering students in a sprawling adobe building built by a previous generation of students, explains that this precariousness means that very little of the campesinos' output can be sold outside the community. The only thing campesinos can now sell, he says, is "their ability to work--their labor power." Campesinos face the market as sellers of labor power and buyers of just about everything else. "They face double exploitation: jodido on the labor market and jodido in the markets for the goods imported into the village. This all leads to a loss of dignity and identity, and to increased rates of alcoholism, family dissolution, feelings of impotence and fights among communities. There is a loss of social organization, a degradation of the conditions of life."
Of course, the lack of access to land and capital has long been a problem in Mexico. For decades, rural workers have been streaming into the cities to sell their ability to work, both as permanent migrants and as weekday workers who return to their villages on weekends and holidays. Men have typically sought work in the construction industry, while women have found work as live-in domestics. But with the 1995 collapse of Mexico's domestic market and the consequent shrinking of the demand for labor, there has been a downward displacement of workers, and both sources of work are drying up for migrant campesinos. This is happening just as Mexico's small-scale farmers face a sharp deterioration of their living standards and the unraveling of their communities.
"Every year we realize that these campesino regions fall outside the scope of government plans," says Cesder's Berlanga. "What is necessary is a different type of policy that takes these regions into account. Our vision is a country in which campesinos continue to exist, but in a different kind of society from the one that's developing now. The campesinos don't fit into the government's project--not as producers and not as citizens. They are told to stop being campesinos and to adapt to another mode of life, but there is no room for them in the cities, and there is no policy to incorporate them elsewhere."
Berlanga and his colleagues arrived in the Sierra in the early 1980s, veterans of the radical struggles of the 1960s, whose defining moment was the 1968 massacre of hundreds of protesting students in Mexico City's Tlatelolco Plaza. By the late 1970s, the old radicals had dispersed but by no means disappeared. In addition to being a teacher of alternative agricultural techniques, Berlanga is one of a few hundred "advisors" to the Zapatista Army of National Liberation (EZLN).
"Marcos and I are of the same generation," he says. "At the same time that he went with his people to the guerrilla movement in Chiapas, we came here with a very different perspective having nothing to do with armed struggle. When the Zapatistas emerged in Chiapas, for a moment we wondered whether we should have been armed revolutionaries and fought here, for example, in the Sierra. Marcos did it, why didn't we? Maybe we've been mistaken for the last ten years. But the possibility of this armed group--this new discourse--only appeared after years of working from below with local organizations who gave no thought to armed struggle. Marcos couldn't have existed if we hadn't existed. And all of our forces were strengthened when the armed struggle broke out in Chiapas. If the Zapatista uprising had never taken place, the emergence of civil society would have been a much slower process." Berlanga becomes momentarily pensive, his thoughts drifting to a group of students assisting in the difficult birthing of a goat. "The work is very slow," he muses, "but we have all been preparing the ground for each other."
Similar stories are told in places as dissimilar as working class colonias in the center of Mexico City and impoverished indigenous communities in rural Chiapas. The movements bubbling up from below are sometimes the result of spontaneous reactions to unbearable situations--as in the case of El Barzon. More often they represent a resistance that has been gestating for years, the result of the carefully laid groundwork of social activists. The socially corrosive forces of globalizing neoliberalism have helped give these movements a more unified shape.
Mexico City's working class Colonia Guerrero, for example, has given life to one of the city's most militant--and still independent--neighborhood organizations, the Assembly of Barrios. It is also home to one of the city's oldest and most socially active Catholic parishes, the Parish of Los Angeles. The parish is the key to the colonia's long and continuing role in the social struggle, says Francisco Saucedo, a colonia resident and official of the center-left Party of the Democratic Revolution (PRD). Just a few years ago, he says, "on the one hundredth anniversary of the parish, the Padre invited all the colonia's social and civic organizations to participate in the celebration. Suddenly we were all in the same space; the idea of sharing who we were and where we came from led to a process of rediscovery." Saucedo's "rediscovery" is much like Berlanga's realization that despite the slow and painstaking nature of organizing within small communities, many Mexican activists were laying the groundwork for one another.7
The Jesuits of the Los Angeles Parish, for example, have long taken a leading role in Colonia's Guerrero's social organization. "In the 1960s, the Jesuits led the social movement," says Saucedo. "This was a period of reflection, a great feeling that there was a need to do something, especially after the massacre at Tlatelolco. We began to organize around the need for housing and the rights of tenants." Residents formed the Union of Neighbors of Colonia Guerrero which, by the 1980s, had linked up with similar groups in other colonias to become the city-wide Tenants Coordinating Group. And in 1981, a group called the Coordinating Committee of Urban Popular Movements (Conamup) was formed in Guerrero to coordinate the struggles of popular movements throughout Mexico City. "This was the birth of the social left," says Saucedo, "a left closely connected to the daily struggles of the workers. We organized in factories as well as neighborhoods. All these spaces were terrains of struggle. All this came together in the late 1980s as a current of the PRD, distinguishing itself from an older, more party-oriented left." This "social left" is a nonelectoral left, even though it is linked to--and now dominant within-- the country's leading leftist electoral force.
The social left grew in the aftermath of the massive 1985 earthquake that killed at least 10,000 people in Mexico City. Neither the government nor the community organizations of the ruling PRI proved capable of organizing rescue actions, post- earthquake relief or housing reconstruction. All these tasks were left to nongovernmental organizations (NGOs), informal neighborhood groups and the parish. This led to links between community organizations--both church groups and the victims' spontaneously created groups--and international relief donors. The urban popular movement grew along with victims' groups, and in April, 1987, the Assembly of Barrios was formed as a city-wide organization to fight against evictions and for better housing and reconstruction. "There were none of those interminable discussions of the left," says Saucedo. "It was just like this (he snaps his fingers) and we got it done. The victims' movement became the vanguard of the social left. We did what we said. We were not strictly known as the left, but that's who we were."
"We came here and we learned from the people," say both Berlanga and Saucedo. In both cases leftist organizers brought certain agendas to communities which had agendas of their own, and in the interaction, new forms of political action emerged. In both case, the linking with popular struggles--for land, work, housing--has narrowed the organizers' agenda. Berlanga says the same of his companero Marcos: "There is a great difference between the project Marcos and his people initiated in Chiapas 15 years ago and the project they have now. They went with a project of guerrilla warfare to seize power. The result was not what Marcos envisioned. But he captured the moment and the circumstances and reworked his discourse into what it is now. And it still needs time to mature in practice."
In a similar way, there is a great difference between the project that former student activists took into Mexico City's Colonia Guerrero and the one they ended up with. They also "captured the moment" and developed a new discourse, one that was a good deal narrower and more concrete, and with more opportunities for small successes. And above all, the organizers of El Barzon, by creating a powerful national movement independent of the ruling elites, have transformed Mexican political culture--and themselves--almost beyond recognition. These debt-laden entrepreneurs are now holding regular strategy sessions with previously marginalized groups from virtually all sectors of Mexican society. Their closest collaborators seem to be the Zapatista guerrillas.
These political transformations will continue, linked to the continuing social crisis of the country--a social crisis linked to its economic policy. The move from social protection to a market-driven globalization has torn the fabric of Mexican society, leaving it to the radicals--of one sort or another--to remake the country from below.
Until the early 1980s, four components guided Mexican economic policy: a high degree of state participation in the economy; a strategy of "stable development" which attempted to keep prices, interest rates and the exchange rate under control; the protection of domestic industry with high tariff and non-tariff barriers to international trade and investment; and an attempt to provide a relatively high degree of social security to Mexican citizens.
Beginning with the reforms of President Miguel De la Madrid in 1983--reforms dictated in large part by the international lending agencies which were "helping" the country emerge from its moratorium on international debt payments-- economic policy took a 180-degree turn. Embarking on the "free-market" path pioneered by the "Chicago boys" employed by the Chilean dictatorship, Mexico reversed all four directions and entered into a period of reform that privatized and deregulated the economy, opened it to international investment and trade, and cut loose the workforce--especially the peasantry--from its traditional protections and supports.
The goal was the development of an export-based economy, driven by private capital, with a major role for transnational companies and international portfolio investors, all with little regard for domestic productive chains. Many U.S. investors shared this goal, and negotiations to create NAFTA soon became a priority for leaders in all three North American countries. Doubts within the official delegations not withstanding, the treaty was designed to make integration irreversible, forging a--hoped for--unbreakable alliance of transnational capital.
Policy makers saw the project as part of a global movement which, in Latin America, had come to be known as "neoliberalism," a word which came into vogue in the early 1980s when its advocates, led by the eloquent Mario Vargas Llosa, spearheaded a stinging attack on the region's "statist" economies. The new movement deliberately evoked the classic liberal commitments--individual rights, civil liberties, private property--and placed these commitments in the context of the late twentieth-century global economy. This celebration of the individual was embedded in the institutional setting of the North-South divide; the global dominance of (mostly) northern-based transnational corporations, which quickly incorporated the wealthiest of the Third-World corporate elites; the government-like role played by the major international financial institutions; and the continually changing global division of labor, in which low wages had become many countries' sole comparative advantage in the international economy.8
The basic ideas of what has become the on-the-ground neoliberal economic model are embodied in the development strategies of the International Monetary Fund (IMF), the World Bank, and, in Latin America, the Inter-American Development Bank (IDB). Indeed, implementation of the elements of the model is so frequently a condition of receiving IMF support that the term "IMF conditionality"-- along with the synonomous "Washington consensus"--has entered the vocabulary of planners and politicians across the region.9
The course of neoliberal reform has been embodied by Mexico's determined insertion into the global economy--most dramatically by way of NAFTA--and by the growing importance of foreign private investment as a driving force of economic growth and development. Low costs of production (i.e. low wages) have become the magnet which attracts transnational direct investors, high rates of return (i.e. high interest rates) have brought in the "hot-money" portfolio investors, and disappearing tariff barriers have allowed international retailers to set up shop throughout the country. Declining real wages, meanwhile, are impoverishing Mexican workers and stripping the country's government-controlled union movement of its legitimacy. High real interest rates are crowding out domestic businesspeople, and radicalizing--at least temporarily--the small businessmen of El Barzon. Cheap products from U.S. agribusiness are depriving campesino producers of a market, providing fertile organizing ground for groups like Cesder. To borrow Berlanga's turn of phrase, the whole country is jodido.
The "technocratic" economic team that rose to power under Miguel De la Madrid during the latter half of the 1980s consolidated the neoliberal reforms. The new team, one of whose key players was president-to-be Carlos Salinas de Gortari, declared that government had no business in production, but rather should limit itself to creating the conditions within which private groups could operate profitably. It also declared that the country's principal problem was a lack of internal savings, and therefore set itself the task of developing markets capable of receiving foreign capital, and a business environment capable of attracting global producers and financiers.
The new team of Mexican technocrats oversaw the dismantling of the state apparatus that had promoted industrial and agricultural development over the previous four decades. In its place they used policies of slow money growth and fiscal austerity to generate high rates of return for foreign investors. Declining inflation, a stable currency and high interest rates were the anchors of a financial policy that converted Mexico into the wunderkind of international finance. Many Mexicans, of course, feared that the "reformers" also had some venal interests in mind when they accelerated the privatization process and tried to make it irreversible. Subsequent events have done nothing to extinguish those fears.
The privatization of state firms has been financed by a combination of direct and financial foreign investment, and the return of the "flight capital" that had been sent abroad by wealthy nationals. The process has meshed with the old personal connections of the Mexicar regime. In an especially egregious example, Telmex, the state-run phone system, was privatized in 1990 in an insider deal in which one man--the well-connected billionaire Carlos Slim--was allowed to create a huge financial base with foreign partners, tender a large international public stock offering, and still retain a very profitable controlling interest.10
Neoliberal reform moved into high gear in the early 1990s under the presidency of Carlos Salinas. The banks, which had been nationalized in 1982, were reprivatized in 1990 as part of the market-oriented restructuring of the Mexican economy. The banks' rapid integration into the oligopolistic structure of the economy made them--at least until the current playing out of El Barzon's lawsuit--independent of political pressure. When their speculative investments and policies turned out to have been based on poor judgement or, worse, used to finance frankly corrupt activities and practices, they were still able to demand--and receive--government support.
Along with privatization, the economic restructuring promoted by the last three Mexican administrations has called for the creation of an autonomous monetary authority, like the private banks, free from popular pressures. The central bank, the Banco de Mexico--long proud of its reputation for "technocratic" and de-ideologized monetary management--has been given political and functional autonomy as part of a broader effort to remove economic policy from accountability to popular representation. That way, the "bitter medicine" of austerity can be more efficiently be imposed through a policy of tight money.
On a global scale, the neoliberal era has seen the rising power of financial capital. The principal financial centers-- New York, London, Tokyo and, perhaps, Frankfurt--have become centers for attracting and redistributing financial assets throughout the world. With the demise of the socialist bloc and the emergence of eastern European markets, the leading companies in theseocenters have gained even more freedom to concentrate and then redistribute money from one country to another with a simple order transmitted by voice or computer. The global trend of financial deregulation has placed unprecedented amounts of capital at the disposition of these agents, who turn out to be accountable to virtually nobody, as we continually learn when their errors of judgement or corrupt practices provoke failures of a magnitude that require taxpayers in their home countries to bail out the financiers and their agents.
With tremendous accumulations of wealth to be distributed and invested every day, the global financiers--corporate bankers, underwriting firms, mutual funds, insurance companies and even stockbrokers--have become key decision makers in the so- called "emerging markets." They are under constant pressure since they know that they not only have to search out new profitable opportunities and anticipate future trends, but that each decision will influence the attractiveness of the rest of their portfolio, and those of their competitors. The size of their investments is such that a recommendation about a particular company or country can often determine the success or failure of corporate strategies or national economic policies.
Unlike the multilateral financial institutions emerging from the Bretton Woods accords of 1946, which built up large staffs of professionals who counselled recipients on the management of their economies to promote capital accumulation and development, these new financiers have very short-term horizons. Thiy have to report competitively attractive results to their shareholders, to new investors and to regulatory bodies on a quarterly, semi-annual or annual basis. Their personal fortunes depend upon these performance reports, which are insensitive to long-term considerations of stability--or to the impact of their investment decisions on the social and economic structures or environmental health of the regions they are entering.
Under the Salinas administration, tens of billions of dollars poured into Mexico, oblivious to the profound disequilibria that were gestating in the productive structure, and oblivious to the growing hardships of daily life for the majority of Mexicans [see "The Maquilization..." p. tk.]. Very little of the foreign savings was used for productive purposes. There was some new investment in export-oriented automobile production, in the maquiladoras and in a few other manufacturing sectors, but most of the resources were channeled into the stock market, where profits are not taxed and transactions need not be reported to fiscal authorities.11 "Between 1991 and 1993," reports the Bank of Mexico, "foreign portfolio investment was [Mexico's] main source of foreign-capital inflows."12
Money--even "cautious" money--was drawn to Mexico by a government securities market that offered rates of return four or five times higher than prevailing interest rates in the United States or Europe. Of course, overnight devaluation could wipe out the dollar earnings of peso-denominated investments, but the magic of Salinas' relationship with the world press and financial community conquered any reservations. The stock market was awash in money, but little new productive investment was occurring, real incomes were falling, underemployment rising and social malaise deepening.
The massive injections of new money--especially in the early 1990s--created a speculative boom that fed upon itself. Because there were so few players, the financial boom could be cleverly manipulated by knewledgeable brokers to produce sudden cyclical swings that allowed for great fortunes to be made. And since portfolio investment is sensitive to perceptions of very short-term gains and losses, in a lightning-quick loss of confidence, investors reacted to the government's awkward peso devaluation of December, 1994 by removing an estimated $5 billion of foreign (and a good deal of domestic) capital in a matter of days.13
The globalizing strategy has been accompanied all along by a loosening of price controls, exchange-rate controls and interest-rate controls, though not surprisingly, the model has never called for the absence of wage controls. In Mexico such controls have been "semi-voluntary," achieved through the cooperation of the trade-union hierarchy within the PRI corporate structure. Deals with labor unions officially incorporated into the long-ruling PRI have allowed the export sector to take advantage of labor discipline and a cheaper labor force [see "The Unions," p. tk.]
The strategy has also called for a shrinking welfare function of the state: cuts in social spending, and the encouragement of market--rather than state--solutions to social problems. Social-security pensions, for example, are now being turned over to privately managed, individually chosen pension funds. The problem of insufficient domestic savings is thereby being addressed with a program that places the private savings of workers at the disposal of private investors, at the same time that it encourages workers to think of themseves as financial entrepreneurs.14
The lending agencies have also placed great emphasis on what they call "human resource development"--agency terminology for the neoliberal model's labor policy. In Mexico, this has meant the growth of privately controlled technical training and education, a "residual" social-welfare policy to replace the "institutional" social welfare of the previous model, labor flexibility and the renegotiation of union contracts. It has also meant the encouragement of microenterprise, not so much as a model of private-sector development, but as a substitute for state-sponsored social security--i.e. a way of mopping up the unemployed.
Under the neoliberal model of social welfare, the state will step in only residually--in emergencies of one kind or another that might call the system's legitimacy into question. While there is a great deal of philosophical talk among neoliberals about how individuals (or perhaps families) are responsible for their own welfare, the economic justification is labor discipline, Mexico's comparative advantage in the new global division of labor. Microenterprise--the informal family firm--has become the model's safety net, and has created an enormous reserve labor pool. One of the reasons Mexico's unemployment rate has been so low throughout the economic crisis--hovering around 6%--is precisely the safety valve of the easy-to-enter informal economy, at home and north of the border.
This has created a powerful downward pressure on wages. Internal documents of the National Minimum Wage Commission show that the real minimum wage peaked in 1976 and has since declined to levels lower than those of the populist 1930s [See Table #1, p.tk.] It now takes 4.8 minimum wages for an urban family of four to rise above the poverty line, but the average wage is between two and three minimum wages. The result is an increasingly desperate, "available" workforce.
Declining real wages has made it necessary for families to send more than one member out to work. Many of those second and third family workers are losing their jobs, however, and find themselves looking for something not quite as good. At the lowest levels, there is no place left to look. This downward displacement of labor has reached the point where there are large numbers of working-age people who are doing absolutely nothing. This has obvious public-safety implications. Crime is rising in all sectors of neoliberal Mexico.15
A social left has emerged over the past ten years as a response to this disassembling of the country's social and economic networks from above. As the experience of groups like Cesder and the Assembly of Barrios shows, this left has formed around very concrete demands and proposals, and has achieved success by setting itself narrow, achievable goals. But there is a down side to this success. "We were successful with the early stages," says Francisco Saucedo of Colonia Guerrero. "We demanded land and housing. We succeeded and we constructed the Assembly of Barrios. We had tens of thousands of people, almost in permanent mobilization. Now the government has penetrated us and divided us. The organizations are local and small and fighting for the same small things. These small organizations, if not linked to some larger project, lack political impact. They become competitive and parochial."
This recognition, combined with the severity of the current economic crisis has given form to some political alliances that in an earlier day would have been impossible. This past July, for example, 300 once-middle-class barzonistas held a two-day conference in the town of La Realidad, Chiapas, under the "protection" of the dirt-poor indigenous Zapatista guerrillas.
It has also given form to a new try at an alliance between the EZLN and the center-left PRD. Marcos and the new PRD general secretary Andres Manuel Lopez Obrador have announced that the two groups would work together--something they have not been able to do before--to ensure success in the 1997 congressional elections. From Marcos' point of view, such a partnership must be embedded in a broader alliance of social forces. "If we had to choose a political force to which to give our support," said Marcos in a talk to members of El Barzon, "that force would be civil society, a force independent of the political parties, or which, including them, was greater than the sum of its parts, more generous than the egoism of their leaderships, more inclusive than particular sectarianisms. A force of forces. That would be the political force the EZLN would support."16
The EZLN clearly cannot organize such a national force by itself. Its supporters outside of Chiapas have organized the Zapatista National Liberation Front (FZLN), but realize they have to join forces with other groups in order to have any real effect. "A force of forces must be based on the principle of nonexclusion," says Javier Elorriaga, a leader of the FZLN who spent over a year in jail for being an "alleged Zapatista"--he acted as a go-between for the EZLN and the government in the early days of the uprising. "Zapatismo cannot represent everything. Modestly, we want to be one more force, to build a space that is genuinely democratic. We want to build a popular force which one day can become the government, not through an armed revolution, but a social revolution in which the people take the destiny of the country in their own hands."17
This seems to be the direction that the recently elected leadership of the PRD wants to take. The idea, wrote federal deputy Marco Rascon in the daily paper, La Jornada, consists of "creating a movement-party...unified in the social struggle and the struggle for democracy."18 The idea has been taken up by some of the older currents within the party. One of the defeated, "old-left" candidates for party leadership, Amalia Garcia, is now a member of the PRD executive committee with the specific responsibility of reaching out to this social left. The significance of the "flowering of civil society," she says, is that it is "breaking the state's monopoly of political mediation." And beyond that, "Mexico is entering into another electoral dynamic in which other parties are appearing, occasionally winning, and demonstrating that the PRI no longer has an absolute monopoly on the direction of the country. It is no longer the only political actor."19
Just how this social left is developing could be glimpsed at a meeting in Mexico City this past summer called the "Convergence," organized by the EZLN-El Barzon alliance. The organizers issued the call around two very broad and fundamental demands: for a new political economy (against neoliberalism) and against corruption and impunity (against the corporatism of the PRI). "People are thirsting for new initiatives," said Garcia, representing the PRD at the Convergence. "But there are more initiatives now than it's possible to coordinate."
In attendance--and therefore "members" of this incipient organization--were groups and organizations of all stripes. Small and mid-scale entrepreneurs, increasingly squeezed by the ongoing economic crisis, and bank debtors like El Barzon participated alongside housing-advocacy groups and street- vendor representatives. NGOs, typically organized around specific issues, and human rights groups were present, as were feminist groups, Christian base communities, groups formed around the movements for dialogue and peace in Chiapas and other conflictive zones, and a variety of social, cultural, religious and philanthropic "civil associations." Campesino and farmworker organizations, dissident trade unionists and members of opposition political parties--the PRD as well as the smaller Workers Party (PT)--also attended the late-August meeting.
The groups represented in the still-gestating Convergence reflect different aspects of the Mexican crisis and, above all, civil society's response to that crisis. While the Convergence itself may fade away like many other attempts to organize the Mexican opposition, its size, scope and diverse composition highlight the country's current state of affairs: Mexico is transforming itself through the conflictive interaction of two very powerful forces--the globalizing project imposed from above, and the resistance to that project, bubbling up from below.
Over the last two years, Mexicans have been caught in an economic crisis of appalling proportions. The peso devaluation of December, 1994, and the ensuing capital flight and stock market crash, plunged the Mexican economy into its deepest depression since the 1930s. Within two months of the devaluation, the value of the currency had declined by more than half; within four months the level of unemployment had doubled; inflation jumped from 7% in 1994 to 52% in 1995; and the gross domestic product (GDP) had declined by 6.9% at year's end.1 The economic crisis saw the collapse of the country's internal market, the virtual disappearance of credit for small and medium-size businesses, a dramatic contraction of formal employment and an alarming growth of poverty. Twelve months after the peso debacle, an estimated 75% of Mexican families could not afford the "basic basket" of goods and services considered necessary to bring a family above the official poverty line.2 1995 was not a happy year.
1996 saw a halt to the slide, and what is now being touted-- especially to foreign investors--as a "recovery." Third- quarter GDP growth was recently reported at 7.4%, leading Finance Minister Guillermo Ortiz to tell a November press conference that the country's basic institutions were now sound. Mexico, he said, could expect 4% economic growth, 800,000 new jobs, $8 billion of new foreign direct investment and $3 billion in privatization earnings in 1997.3
But what Ortiz touts as an economic "recovery" is doing nothing to improve living conditions in Mexico. Real wages continue to fall, formal employment continues to be hard to find and the rate of poverty hasn't budged [See "Employment," p. tk, and Graph #1, p. tk.] The decline of GDP was halted only by the robust performance of transnational firms in the automobile industry and in the maquiladora sector--firms which import and produce strictly for export and are barely integrated into the national economy. In fact, since the export-oriented firms employ Mexican labor but don't rely on Mexican purchasing power, they have been well placed to take advantage of the country's economic collapse.
This export-driven "recovery" is not without precedent. A sharp devaluation back in 1982 created similar opportunities for the automobile industry to initiate a period of accelerated expansion. A highly automated assembly plant was built by the Ford Motor Company in Hermosillo, Sonora to produce automobiles for the U.S. market. Dozens of additional plants were created by other transnational firms to provide basic parts for autos being assembled in Mexico or for use on the assembly lines in the United States.
This activity was so important, that by the end of the decade, more than one-third of the engine blocks used in cars in the United States were imported from Mexico. Almost three- quarters of the wiring harnesses and substantial parts of the brake assemblies, windows and other components were supplied from plants in northern Mexico. In spite of the rapid growth of exports, however, at its height, the industry only employed about 175,000 people.4
In a like manner, agroexport groups seized the moment in the early 1980s. In many cases, local producers joined with foreign counterparts or international brokers to obtain the technology and finance the high costs of fruit and vegetable production. The range of primary products exported during this period increased dramatically as did their value, as producers aggressively sought out new clients in traditional markets, and managed to enter new markets.
The opening of the economy in the 1980s and the declining real incomes of the population rapidly eroded the market for domestic producers of many basic consumer items, especially in the clothing and footwear sectors. Without any adjustment or modernization program, and with soaring interest rates and a lack of credit, Mexican firms simply could not compete with the less expensive products--despite their lower quality-- being imported from Asia.
The assault against domestic producers extended to other manufacturing areas, and dramatically to the rural economy. By the late 1980s, small farmers, who had been able to adapt to changing conditions earlier in the decade, found that they could no longer compete with the growing volumes of imported grains, frequently subsidized by foreign governments. To seal their fate, the Salinas administration introduced constitutional changes--the reform of Article 27, which privatized communally owned ejido lands--to facilitate the sale of desirable plots to agroindustrial interests.
What we are seeing now--in keeping with the same neoliberal strategy--is a maquilization of the Mexican economy. With the loosening of trade barriers and the relentless cheapening of labor power, maquila employment has grown from about 550,000 in 1994 to about 800,000 by late 1996. By contrast, employment in non-maquila manufacturing has been falling for over a decade. Twenty-seven percent of all manufacturing workers are now working in maquiladoras--compared to only 7% in 1985.5 Maquila output rose dramatically in 1995 and continued to rise in 1996--from January through August, output was 17% higher than over the same period in 1995. But the maquila sector's percentage of local integration--inputs bought from Mexican suppliers--declined from about 2% to 1% over this same period.6
The sector's lack of integration into the Mexican economy can be grasped by comparing the value of its exports with the value of its imports. Over the first eight months of 1996, the value of maquila exports stood at $23.3 billion, while the value of maquila imports was $19.9 billion.7 Maquila imports consist entirely of intermediate goods--like cloth for shirts or circuits for electrical parts--which must be worked into final goods and re-exported within six months. So while $23.3 billion of maquila output was added to Mexico's GDP over the first eight months of 1996, only $3.5 billion of that total was actually produced in Mexico.
Crucial industries in the non-maquila sector are also increasing exports. Transnational automakers, for example, salvaged 1995 with a 22.5% increase in the production of passenger cars for export and a 131.6% increase in the production of trucks for export. This trend has continued into 1996. The combined non-maquila export value of cars, trucks, vehicle motors and auto parts rose from $7.8 billion for the first eight months of 1995 to $10.9 billion for the same period of 1996, a 40% increase.8
All told, as the non-maquila sector turned to export-oriented production, its share of total exports (compared to the maquiladoras) rose from 56.9 in 1994 to 62.1% over the first eight months of 1996.9 The longer the current crisis continues, the higher this number is likely to get, as more and more non-maquila producers begin looking abroad for their customers, and the domestic market increasingly does without.
--D.B. and F.R.
******************* This material came from PeaceNet, a non-profit progressive networking service. For more information, send a message to email@example.com Reprinted from the January/February 1997 Issue of NACLA Report on the Americas. For subscription information, E-mail to firstname.lastname@example.org ************************