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Octavio Rodríguez Araujo: Mexico In Crisis

Mexico In Crisis

by Octavio Rodríguez Araujo
from La Jornada, Rebelion 17-11-2006
Translation by Tortilla con Sal

One of the aspects that characterizes Mexico's crisis today is the State and its system of public administration, not because the State is not fulfilling its class nature but because in doing so via the logic of globalization it is leading the country to ruin, for the benefit of just a few. The system of public administration that has been installed functions for this kind of State; both are working in the same direction, but the role of the system carries in its insides an extreme conflict that can only be resolved by negating the State as an expression of nationhood rather than of globalized economic interests or by the affirmation of a national State in which the majority of the people also benefit from economic growth (what has been called national development).

This alternative has already been considered even by multinational institutions like the Inter-American Development Bank, since the worldwide concentration of capital, dominated by some 200 companies, endangers capitalism itself and the whole planet along with it. The disposability of nations and regions, typical of neoliberal globalization in its beginnings, has proved that it is not viable because markets need to grow to keep capitalism healthy as a system. There are voices authorised to propose that we return, albeit partially, to national development (with all that means in terms of strengthening efficient internal markets) which has much to do with employment policies and reducing poverty and marginalization.

Many Mexican business people have not understood this situation and likewise many foreign multinationals. The former because they are backwards business people dominated by a short-term ideology of quick and easy money or else because they are partners, however junior, of multinational capital. The latter because their international interests, naturally world wide, are still satisfied by existing markets. These are the interests that have supported the neoliberal politics of Mexican governments from Miguel de Madrid (1) to the present day and who have supported Felipe Calderón's (2) campaign so he can carry on working for them from the office of President of the Republic. The continuation of the neoliberal, technocratic regime guarantees both the interests just described and, for them, the country as a sovereign nation makes no sense except as a territory where they can do big business with cheap labour.

For them, the federal Mexican government, like any other Third World country, is equivalent to a company management or, in the best case, to a local government whose main purpose is to offer the population those services that are not profitable for private capital, keeping the working population sufficiently healthy and well-educated for businesses (nothing else matters), maintaining vital political and social stability for investor security and, not least, allowing control of national energy and environmental resources and other public and national interests based on a logic of neocolonial pillage.

The rulers of neoliberal Mexico, who seem more like managing directors or municipal executives, have demonstrated their subordination to the interests already mentioned through their determination to privatize oil and electricity in favour of the highest bidder, as they have already done with a large number of public enterprises and as they want to to (and have done in part) with education up to university level, with water and with other vital services. Healthcare is also included in this dynamic. They are governments that instead of creating more employment and regulating capital, want and insist on increased taxes on medicines and basic foods in order to gather more economic resources for themselves rather than broadening the employment base which currently , according to INEGI (3), has an under-capacity of 6 million. They are the same governments that have allowed and tolerated a huge growth in the informal economy, among other reasons so as to keep the social peace, as an incidental and ephemeral palliative not developing the country but sustaining in barely tolerable conditions millions of the country's low-income families, as does emigration and the remittances derived from it (some US$24bn a year).

A study by the International Monetary Fund, supplemented by another one by the INEGI reveals a dramatic country situation with reference to the informal economy and its tax repercussions. The value of the informal economy grew to a size equivalent to a third of the country's gross domestic product, one of the highest ratios in the world and one which means US$284bn move through those channels every year. The INEGI for its part reckons the size of Mexico's informal economy is greater than the combined activity of industry (manufacturing, mining, construction and the gas, water and electricity utilities) and agriculture, livestock, forestry and fishing that produce 26.6% and 3.9% respectively of the gross national product for a total of 30.5% between the two sectors (see La Jornada 12/10/2006). The escape valve the informal economy thus comprises permits relative stability but at a very high future cost in terms of national development.

People suspect that this economic model will continue with Felipe Calderón, among other reasons because Agustin Carstens (4) is part of his team. The former IMF official, despite recognizing that the basic measures of the World Bank and the IMF known as the Washington Consensus have already been left behind, suggests that Calderón is right to propose increasing private holdings of Pemex (5) and applying general taxation. The same is said of electricity and other businesses with strategic components, like water as already mentioned, for the country and its people,

That's how things will go, if we let them.

Translation notes
1. Miguel de la Madrid Hurtado, President of Mexico 1982-1988
2. Felipe Calderón, Mexico's current President-elect following the recent controversial election
3. Instituto Nacional de Estadística Geografía e Informática
4. Agustin Carstens, one of Calderón's economics team, was Assistant Managing Director of the IMF from 2003 to 2006.
5. Petróleos Mexicanos - Mexico's State oil company


Translation Copyleft by Tortilla con Sal

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