Center for Latin American Studies, UC Berkeley

Alicia Hernández Chávez
"Historical Perspectives on Contemporary Mexico"

October 4, 2001

On October 4, 2001, Professor Alicia Hernández Chávez, a Mexican historian, took part in the "Historical Perspectives on Contemporary Mexico" panel sponsored by the Center for Latin American Studies. Professor Adolfo Gilly (UNAM) and Professor Alan Knight (Oxford University) also served on the panel, moderated by UC Berkeley professor of history Margaret Chowning. Below is a summary transcript of Professor Chávez's remarks.

Prof. Alicia Hernández Chávez

El Colegio de México

Hannah Arendt wrote in On Violence that "the Third World is not a reality, it is an ideology." This presentation contends that the nationalist and populist policies of Mexico's past explain the recent developments in contemporary Mexico. Populist policies and Third World discourse were at their apex during the 1960 and 1970 decades, and are the key variables for any explanation pertaining to the technological and cultural backwardness of modern day Mexico. These variables include the enormous foreign debt, the recurrent devaluation of the peso, creeping consumer prices, a closed economy, an educational system and academic staff confined within their petty boundaries, and rampant corruption at all levels. All these factors had by 1980, taken their toll on the vast majority of the middleclass and the poor. While the period between 1982 and 1986 were critical years that served as the turning point away from those years of populist policies and Third World discourse, the consequences of the 1960 and 1970 decades have proven its resilience.

Businesses and businessmen, with few exceptions were heavily dependent on the state enterprises as they profited in the short term under a protected market. On the other hand, in a competitive world market since Mexico's market reforms, they have paid a costly price. This proved true because state-run monopolies, public services and a vast majority of Mexican enterprises did not invest in new technology and a modern communication system. Nor did the state encourage an efficient petroleum industry. State owned industries produced and sold with total disregard for productivity and quality. A similar situation existed in the state-run agricultural sector where several million ejidatarios (tillers of communally owned land) produced cash crops under government supervision. The government at fixed prices purchased their produce with little regard for cost, quality and productivity. The banking system, configured by the state, funded such industrial plants and services and agricultural projects.

This set of relations built around production and distribution had their counterpart in labor relations and amongst agricultural and rural workers linked to the PRI and hence, the Mexican government. As the corporate state expanded, the number of bureaucrats and workers increased accordingly. Tax money was freely spent, and since enough was available due to abundant foreign credit backed up by oil, many Mexicans tended to equate social benefits with privileges granted by government officials, mainly the President, his cabinet members and state governors.

Changes in Mexico began several decades ago, albeit the grip that the government and the PRI had on social life remained substantial until the mid 1980's when state power began to seriously weaken and erode. Population growth by the mid sixties had become such that the state-directed sectors of the economy were incapable of integrating newcomers. As urban industrialization paced ahead, the gap between workers and campesinos (peasants) widened. Consequently, the ejido (communally owned land) and the ejidatarios in the Confederación Nacional Campesina (CNC), the basic supporters of the PRI's governments, lost strength as agricultural output decreased and land distribution came to a standstill. The ejido land did not become free of state subsidies and controls until the constitutional reforms of 1991, which led to the privatization of ejido land.

Highly skilled workers unions began to act independently. From the Confederación de Trabajadores de México (CTM) to the Congreso del Trabajo, a state-controlled workers organization, unions in order to assert their roles in the new economy, began to negotiate directly with private companies as workers accepted the link between income and productivity. Non-strategic workers unions gradually saw both salary and negotiating power diminish as the era of trade unionism dwindled away. The trend that differentiated workers' interests as it divided them, occurred at a time when the CTM's old timers lost their punch or passed away as did Fidel Velázquez, a national labor boss who had held fast to his stronghold since the 1930's.

Another important sign of the increase in the UNT's political clout is the inclusion of two UNT leaders on Mexico's National Labor Board (Mesa Central de Decision). De la Garza pointed out that this change has both positive and negative sides to it. On the one hand, this is the first time an independent union has been invited to participate in official negotiations. On the other hand, while the UNT's presence on the Mesa represents progress in democratic decision-making, the labor principles to which that body assented earlier this year represent a significant departure from traditional understanding of labor relations and do not necessarily indicate that future changes to Mexico's labor law will be any more progressive than they otherwise would be.

The PRI's constituencies diminished accordingly as the PRI's plentiful government resources dwindled swiftly in the past couple of decades. Taxes increased affecting labor and white-collar workers. Inflation became endemic. Public services proved ineffective.

Most of what has been described thus far relate to the end of the PRI's monopoly over power, and as such had a synergetic effect. Political parties and movements changed as they shifted from confrontational and class struggle tactics toward an electoral, institutional, open and inclusive politically strategy. Left wing groups broke apart from their traditional central and bureaucratic political parties, particularly after 1968, and created informal organizations linking their political activities to urban squatters, campesinos and independent workers. Significantly, these independent groups formed coalitions on specific issues with progressive sectors both from the PAN and the PRI, which set the basis for what currently occurs nowadays among state and national political factions.

As the liberalization of international communism gained momentum, formal parties such as the PCM, reorganized under various coalitions (PSUM/PMT /PCM). Communists and socialist intellectuals began to participate in a constructive manner in Congressional factions, particularly in strategic committees related to financial issues.

Moreover, groups inside the Catholic Church developed into an important political movement called the Teología de la Liberación, which converged with many left wing groups in Mexico.

The change that the PAN underwent was most important for the PAN transformed beyond its corporate upper class origins, and since the 1960's has broadened its constituency to encompass the petty bourgeoisie and farmers in order to permeate a political vacuum left unfilled by other organizations in the different states and municipios (administrative divisions). By so acting, the PAN strengthened and broadened its constituency, drawing upon the middleclass, rural and urban businessmen, the youth, and women to gain positions in municipal offices and seats in Congress. Most effective was the PAN's anti-state, anti-government and pro-liberal discourse. Results of such changes and reforms were seen in the 1982 elections. The PAN obtained 12.7% of the votes cast nationwide, while the support for left wing parties slightly decreased. The PSUM/PCM/PMS took in 4.25%, the PST 2.75%. Most significantly, the PRI decreased from 80.1% of the vote in 1976 to 69.3% in 1982. Shifts in electoral preferences revealed certain trends. The PRI lost foothold in northern and central Mexico, yet retained its strength with 90% of the vote in the south where illiteracy is rampant.

As Mexicans pressed for political reforms, the international context changed, directing the government to loosen restraints and promote electoral reforms such as providing new seats in Congress for minorities that took into account proportional representation based on votes. Traditional and new political parties profited and soon increased their seats in Congress and at the municipal level. They gained strength, received financial aid and were able to expand nationally.

When Salinas ran against Cuauhtémoc Cárdenas in the 1989 election, aside from the problem of who actually garnered the most votes, Mexicans by splitting their votes forced the political parties to the negotiating table. Thus, the executive power had to discuss and reach agreements with a divided legislative branch where no single party had a majority. This has been the enduring trend for the past decade. Consensus building became a norm and a political necessity for sustainable policies since a 2/3-vote count is required to pass any constitutional reform. In sum, shifting alliances amongst the different parties based on particular issues, have occurred for more than a decade. This practice precedes the 1990-decade when the PRI lost its first state election, and has without doubt paved the way for the rising power of politicians from opposition parties.

In 1992, for the first time in 70 years the PRI lost the state of Chihuahua when the PAN's candidate, Francisco Barrio became Chihuahua's first non-ruling party governor. This changing of the guard process became widespread by the end of President Salinas' term; the PAN and the PRD occupied about half of the electoral posts at the state level, including the Federal District. Most importantly, an autonomous electoral board, the Instituto Federal Electoral (IFE) was created which continues to ensure trustworthy free elections at national and state levels.

As already alluded to above, internal mutations were directly correlated to changing world contexts. The 1982 currency devaluation and the 1986 oil crisis are examples. Devastating effects crippled the protracted nationalist policies, propelling government policies toward an open economy. Mexico joined GATT in 1986 and signed the NAFTA agreement in 1992. President Ernesto Zedillo signed two additional treaties with the European Union and Israel; Zedillo was left to steer firm in the same direction.

Mexico made a late and hasty entrance into an open world economy. Drastic reforms were undertaken without provisions in the form of acting regulatory boards as those of the European Union. State property and state-run businesses were privatized in haste and through an essentially ungoverned process. In less than a decade, hundreds of insolvent industries and state institutions were injudiciously closed, while the most profitable ones were sold to businessmen. By mid 1990's, most economic and social sectors unregulated and existed in a state of free for all.

The whole process ripped apart traditional pacts and arrangements benefited by the PRI, its ruling groups and its favored social classes. Workers, campesinos and private business disrupted the relationship between the president, his party and society. As the social configuration became transformed, workers, industrial groups and government clienteles shifted alliances within and without the PRI, producing much disruption and crises among factions.

Mexico, with its feeble institutional system of justice and political limitations on the courts of law and their administration, brought out the worst of capitalism in an already gravely corrupt system. State enterprises such as the telephone system and banking sectors were sold, disregarding the buyers' financial credentials. Moreover, small and medium-sized businesses went bankrupt; the poorly trained working force was left jobless. All this occurred in a country whose basic weaknesses already are the outrageous disparity in income and education, and unequal access to the rule of law.

Another related issue, basic to any understanding of why and how the whole set of arrangements changed, was the end of the Cold War which was marked symbolically by the fall of the Berlin Wall in 1988. Worldwide diplomacy as of then, operated on a multilateral basis and US diplomacy was obliged to interact with the European Union, China, Japan, the Middle East, and others. In this international political climate, Mexico was able to play a basic role as an intermediate power group (with Brazil).

Mexico pursued and won a strong political position in the world global power structure through its role in the Contadora Group, the Cartagena and the Grupo de Rio, and as a member of key multilateral organizations. The Grupo de Rio has become a permanent consultation board on continental issues for Latin America. The role that the Mexican government fulfilled enabled all Central American political groups to come together, sign a peace treaty, and put an end to decades of war (Acuerdos de Chapultepec 1991). Moreover, NAFTA was signed in 1992 and, in 1994 Mexico joined the Word Trade Organization, the Organization for Economic Co-Operation and Development, and as stated above, subscribed treaties with the European Union and with Israel. Mexico, as a nation-state began to enjoy a respectable position in the world system due to its multilateral diplomacy and by so doing has evolved as an intermediate power in spite of a slow growing economy that has enormous internal weaknesses.

Mexico has endured drastic and dramatic changes during the past decades. Mexico begins the 21st century under new conditions and constraints. The free trade agreement has without doubt produced enormous benefits; yet, the void of, or non-provision for institutional controls through a regulatory board has deepened and aggravated the social and economic costs of liberalization. Poverty and inequality are widespread, and education and culture are poorly provided for.

Rodolfo Pastor, professor of political science at Emory wrote, "The North American Free Trade Agreement succeeded in what it was designed to do. Today the United States exports nearly four times more to its two neighbors than to Japan and China and 40% more than to the European Union. NAFTA's failure has come from what it has omitted. NAFTA is deliberately laissez faire. The income gap between Mexico and its neighbors has not decreased and illegal migration has increased. If Europe built too many institutions, NAFTA made the opposite mistake, it lacks institutions to anticipate or respond to crises, or to take advantage of opportunities."

He further wrote, "The European Union lifted Spain, Portugal, Greece, Ireland, and per capita income has increased and immigration slowed down. Free trade and investment were fundamental but more so was the transfer of aid from 2% to 4% of the recipients' GDP towards education and infrastructure."

Laissez faire pertains not only to NAFTA but also foremost, to the way in which government intervention in Mexico was dismantled, precisely by not regulating the shift that was undertaken. The productive links between small, medium and big industries were completely disregarded, producing shortages in some areas where import parts that could have been supplied for in Mexico were used. Most foreign investment concentrates at the U.S.-Mexico border, now overpopulated and polluted, where available labor supply fluctuates, salaries are low and opportunities less attractive than those across the border. These are conditions that prompt people to cross the border illegally.

Foreign companies do invest in the interior where labor is stable but communications and energy supply there are inadequate or poor. The World Bank estimates that Mexico requires $20 billion a year, for ten years, just for infrastructure. If communications and energy were modernized, investment would increase. However, besides the lack of a modern infrastructure, better education and skilled labor are also deficient. If improvement in all three areas, infrastructure, education and skilled labor supply takes place, investment would increase, and a host of social goods would also emerge. As have been historically the case in other world experiences, these positive changes include increase in adequate human resources, faster access to markets, decline in immigration and the reduction of income disparities.

Vicente Fox's victory in the last presidential election in Mexico orderly and peacefully ended the PRI's 80-year rule. Yet, in order to consolidate a full democracy we need political representation, which in itself requires a party system. All main political parties have thus far proven incapable of modernizing and responding to the many issues that still grapple Mexico. In addition to the general world crisis for all political parties, enormous difficulties for a modern party system prevail in Mexico, and solutions for the obstacles in place are far from clear.

The obstacles are related to the kind of opposition that Carlos Salinas, as president encountered when he began to curb the PRI's power by creating the powerful organization, Solidaridad. This unique organization cut across the traditional PRI establishment in order to develop a parallel power structure. Solidaridad hurt and curbed strong political interests, both inside the PRI as well as without, as it disrupted the PRI's grip upon state and municipal powers. Moreover, since NAFTA, negotiated during Salina's tenure requires an open market and rule of law, the North American Trade Agreement clearly jeopardized political acts within the political elite, amongst businesses linked to the PRI, as well as with other organizations and political parties. Despite bringing about some positive changes, Salinas' reforms backfired and the PRI padlocked, following the murder of two key politicians, one being a presidential candidate. At the time, the most radical nationalist postures took the opportunity to speak up while few progressive figures articulated realistic policies.

In the same vein, while Vicente Fox's victory was path breaking, his government has brought upon few changes and most citizens are still waiting for explanations about past wrongdoings, and corruption they endured. The drug cartels are still strong, and public order and security have decayed. After all the enthusiasm about change and free elections, Mexicans are still living in a stalemate.

The assumption is that Fox honestly wants to change and better things, yet his hands seemed to be tied. Should an explanation be sought in the period when the Salinas government tried to change the Mexican political system? Could an explanation be that both presidents are bound by the same kind and type of enduring resistance to any government reform program? Could the strong opposition, both from the left wing coalition but mostly from the PAN, and other government forces be related to the motives for the violence and the economic and financial disruption of the last two years of the Salinas presidency from 1993 to 1994?