José G. Vargas-Hernández
Mexico State’s
Economic and Political Transition:
From Entrepreneurial
State to State of Entrepreneurs
INTRODUCTION
Mexico is a highly centralized country with a
powerful government, no reelection or, until recently, strong, open political
competition. Since independence and for the last two centuries the dominant
political system in Mexico has been authoritarian and presidential. Starting
with the governments emerging from the Mexican Revolution (1910-17), it settled
on a system of dictatorship in which the dominant party monopolized political
representation and a deformed presidency. Krauze denominated the Imperial
Presidency, weakening the legislature’s ability to carry out its functions and
duties, and diminishing judicial power. Various forms of patriarchal power
represent yet another feature of the Mexican government before and after the
Mexican Revolution.
THE MEXICAN ENTREPRENEURIAL, PRE-PRESIDENTIAL STATE
Mexican economic nationalism emerged as a result
of promoting public and private Mexican capital to avoid foreign investment,
mainly by the United States. The Mexican State was characterized by an
historical distrust of capitalism and a belief in the ability of the government
to intervene and regulate economic affairs through its explicit constitutional
mandate (Grier and Grier, 2000: p. 245). However, from the 1930s and until the
1970s a model of import substitution industrialization (ISI) favored private
Mexican investments and was also believed to benefit the people. The Mexican
public sector enlarged the number of publicly owned corporations. In 1982 state
owned enterprises produced 14 percent of gross national product (GNP), received
net transfers and equal subsidies of 12.7 percent of GNP and represented 38
percent of investment in fixed capital.
In the name of the great conquests of the Mexican
Revolution, during the time of the Mexican welfare state, organizations were
constituted that corporately grouped militias, peasants, working class and
popular sectors which exerted political control over the state’s party
bureaucracy in power and the „charro“ (Mexican horsemen) leaders. The „charrismo“ (a scornful term for union
leaders) forced workers to conform to the rules of the official party, the
Institutional Revolutionary Party or Partido Revolucionario Institucional
(PRI). The workers were pressured and threatened with wage reduction, loss of
employment, benefits, agricultural credit, increase in urban and rural poverty,
etc., to guarantee their loyalty and a reserve of votes.
Although since 1929 all the Mexican presidents
came from the Institutional Revolutionary Party (PRI), economic policy did not
follow a regular and coherent pattern of policy making. Nevertheless, during
the period of the hegemonic PRI, the government cultivated a degree of social
consent that avoided extreme levels of repression in what has been called the
„perfect dictatorship“. In line with the so-called meta-constitutional powers,
the President of Mexico was also the true head of the PRI and had, as his duty,
designed national leaders and candidates for popular election. The Mexican
president had both extensive constitutional and unwritten supra-constitutional
powers and was committed to the retention of his political power during his
mandate. The continuation of his power required him to follow the „ritual“ of
choosing his successor.
As the ruling political party, in the sense that
it dominated the country’s political life, the PRI held power in the federal
executive branch of the Mexican government for 71 years. It was the center of
the Mexican political system and used political mechanisms to control workers,
peasants, the popular sector and organizations, such as „cuadillismo“
(leadership), corporatism, etc. Also,
the PRI enforced institutional control mechanisms over the electoral
process. The PRI’s corporatism focused on
workers and peasants whom it promoted but did not liberate, guarantying them patrimonial
rights and, with the pretext of institutionalizing the Mexican Revolution,
identifying the causes of democracy and social justice with trickery. Its
success in both areas was very poor, although they did maintain social
stability. Each president in turn appointed his successor through a phenomenon
known as „tapadismo“ (overcoat candidate) and „dedazo“ (finger pointing) to
signal who was chosen.
Such analysts as Abascal and Macías (2000b)
identified three stages in the PRI’s evolution: Hegemonic, bipartisan,
pluripartisan. During the hegemonic
stage, from 1929 to 1979, the infinitely superior PRI dominated over the other
political parties and maintained total control of political power. During the
bipartisan stage, from 1979 to 1985, the PRI maintained dominance over
political parties of the opposition but lost seats in municipal and state
governments to the National Action Party or Partido Acción Nacional (PAN).
During the pluripartisan stage, from 1988 through to the end of 2000, it opened
up political competition between the PRI, PAN and the PRD (Partido de la
Revolución Democrática or Democratic Revolution Party) which shared power in
municipal and state governments.
The effectiveness of the „perfect dictatorship“,
according to Vargas Llosa, or to the presidential monarchy (Ortiz Pincheti,
2000), was best demonstrated during an era of prosperity which coincided with a
period of stabilized development, from 1940 to 1970, and a period of shared
development, from 1970 to 1982. During both periods there were great advances
in social policy, although poverty and social inequality were never eradicated,
and a strong middle class emerged and claimed its place in political
participation. The „perfect dictatorship“ was underpinned by the shedding of the
blood of the marginalized Mexicans. The State model, which distributed power
and had emerged out of the Mexican Revolution, culminated in a crisis that
degenerated into institutionalized violence.
At the end of Echeverría’s period (1970-76), after
22 years of monetary stability and sustained growth, the peso (Mexican monetary
unit) was devalued, an economic crisis began, and the constant tensions between
entrepreneurs and government officials became crucial elements in initiating
change. The entrepreneurs founded the Consejo Coordinador Empresarial
(Entrepreneurial Coordinating Council)(ECC) to defend their interests from
State intervention. In 1982 in the middle of a general economic crisis caused
by a fall in oil prices, President López Portillo nationalized the banking
system, devalued the peso, and increased interest rates. The country defaulted
on practically all payments causing a fracture in the pact between the State
and the ECC.
TRANSITION OF THE MEXICAN STATE:
PRE-PRESIDENTIALIST NEOLIBERAL RESTRUCTURING
Much of Latin America experienced financial crisis
in the 1980s and the mid-1990s. In Mexico, intense economic crises occurred in
1976, 1982, 1987 and 1994-95, with intervening periods of mild economic
recovery. Mexicans suffered periods of dramatically high inflation, external
imbalances, devaluation, currency flight, increasing unemployment and declining
purchasing power.
Since the beginning of the eighties the pressures
on Mexican creditors to guarantee payment of external debt resulted in the
creation of an instrument, the so-called „Washington Consensus“, which imposed
infallible neoliberal rule over a free market and a democratic system with free
elections. Thus the „neoliberal agenda“, which proposed structural adjustment
programs and economic stability, was imposed by international financial
organizations, such as the World Bank, the International Monetary Fund and the
Inter American Development Bank, as a condition for negotiating the Mexican
„debt crises“ of 1982, 1987 and 1994-95.
Therefore, after the 1982 crisis, Mexico entered
into a painful, distressful, and controversial period of state
restructuring. The changes included:
economic reorganization; national market openness; elimination of commercial
barriers; elimination of price controls and subsidies; privatization of public
enterprises and state property; reduction of social policy expenses; free money
exchange, and also wide political reforms and administrative modernization. It
abandoned the import substitution model and called economic intervention in the
state into question.
The main thrust of the reforms encouraged in
Mexico was the development of a competitive, broad-based export sector of
nontraditional goods. Mexico joined the General Agreement on Trade and Tariffs
(GATT) in 1986 and became an exporter of manufactured goods. The strategies
adopted for the design of the Mexican State, as it was for other states, was
reduction of state structures and facilities, privatization of state owned
enterprises, and economic deregulation.
With the introduction of these reforms the Mexican
State began to loose its capacity to function as a nation, although the State
maintained that there are high indicators showing that the reforms benefited
the owners of capital. These reforms to the structure of the Mexican State’s
apparatus make sense out of its transition and change from the welfare state
model toward a neoliberal state model. This transition and change are
understood, in Roitman’s terms, as forms of behavior, loss of centrality in
politics, loss in the ability to build a sense citizenship, transformation of
politics into one electoral technique, and an increase in market problems.
Also, a loss of ethics and principles in the work of politicians and political
institutions evidently appeared in Mexico during the government of Miguel de la
Madrid (1982-88), continued with Salinas de Gortari (1988-94), and also with
Zedillo (1994-2000), and now with Fox (2000-2006), (Aviles and Velazquez,
2000).
But the crisis of 1982 was also meaningful as the
„crisis of hegemony“ which was present in the old alliance between the State
and ECC who represented national capital and were the direct beneficiaries of
economic policies based on the import substitution model. Nationalization of the
banking system was the main event that provoked the rupture between the
political and entrepreneurial hegemonic blocks and their representatives, the
politicians and government officials from the party of the State and the
factions that controlled capital. As it is said by Fazio (2000a), they were
living in one tortuous lover relationship of subterranean blurred tides,
intense shady deals, and complicity networking.
With nationalization of the banking system Mexican
capitalists, who felt betrayed, broke their alliance with the political
bureaucracy and designed a strategy for their own re-constitution. The reinvention of the new Mexican State was
initiated under the impulse of an intervening state with a strong neoliberal
technocrat orientation, to the benefit the owners of capital. The process was
based on neocorporatist negotiation between entrepreneurs and government, and
built on mutual interests and compromise.
Economic and Political
Impact of Globalization on the Mexican State
Under the influence of the PRI, the Mexican State
initiated economic modernization and participation in the globalization
processes, as a response to the trends of the economic globalization of
markets, and the technological revolution that began during the last two
decades of the past century. Under the
pretext of cleaning up the economy, the Mexican State privatized strategic
enterprises of the public sector, most of which were acquired by foreign
investors, who had already penetrated all economic sectors. The high
concentration of capital in a few corporations through the privatization
process of public enterprises unleashed the phenomena of political
privatization.
In 1987 inflation reached 159 per cent and a drop
in the stock exchange devoured savings. Inside the PRI, a dissident group
formed called the Democratic Current (Corriente Democrática) that later split
to form a new party, the Frente Democrático Nacional (National Democratic
Front) (NDF). President Miguel de la Madrid Hurtado (1982-88) was the first to
stand questioning in his sixth and last term in government. On the sixth of
July 1988 Salinas achieved power by controlling the election, i.e., where
electoral irregularities and fraud were reported, resulting in a general crisis
and the collapse of the political system.
Salinas deepened neoliberal reform and public
enterprises were liquidated, economic openness was accelerated, and free
commerce agreements were signed with Chile, the United Sates and Canada
(NAFTA), Venezuela and Colombia (Group of Three), Costa Rica, Nicaragua and
Bolivia. Amendments to Constitutional Article 27 allowed investments in the
Mexican countryside. The activism of the Mexican State during Salinas’ mandate
allowed the transfer of public enterprise to financial groups which were
determined to maintain links of political complicity.
Vast programs for the privatization of public
enterprise in Mexico had been successful, to a certain point, in ameliorating
the economic intervention of the State. Mexico ranked second in privatization
in Latin America during the decade of the nineties when the government
transferred to private corporations assets that amounted to 31,458 million
dollars, which represented 20.4 percent of the total sales of state owned
enterprises in Latin America. Privatization reached 3,160 million dollars in
1990, increased to 11,289 million in 1991, and totaled 6,924 million dollars in
1992.
By June of 1992, the Mexican government had
privatized 361 out of approximately 1,200 enterprises owned by the state. Privatization
during 1993 represented 2,131 million dollars. In 1996 it increased to 1,526
million dollars, in 1997 to 4, 496 million, and in 1998 decreased to 999
million dollars. A report from the World Bank states that between 1990 and 1998
privatization of public enterprises reached a total amount of 154,225 million
dollars, an amount only less than the balance of the total external debt of
Mexico which in 1998 was of 159,959 million dollars.
The year in which the state recorded most
privatization was 1991 with a total of 11,289 million dollars, while in 1998
Mexico the lowest was 999 million dollars. The new government of Mexico plans
to privatize airports, railways, and the energy sector, oil and electrical
industries.
The benefits of privatization have not yet been
evident to the Mexican people even though defenders try to demonstrate the
opposite. According to data provided by Salinas de Gortari (1988-94),
privatization reduced budget expenditures to finance social programs thus
preventing a fiscal deficit. However, the effects have not been satisfactory
over all. Programs of privatization in
Mexico have reduced employment by half, while production has increased 54.3
percent with a significant reduction in investment. A study by Galal et al
(1992) analyzed the after-privatization performance of twelve companies in
different countries, including Mexico, and documented an increase of 26 percent
in profits in eleven cases but an increase of benefits to workers in only three
of the cases.
On the 17th of December of 1993, the
United States Congress approved the North America Free Trade Agreement (NAFTA).
Reactions were not long in coming. On January 1st, 1994, the date on
which the Agreement came into force, the indigenous people of the State of
Chiapaz created the National Liberation Zapatista Army (Ejército Zapatista de
Liberación Nacional). Quarrels, resentment and bitterness between political
groups inside the PRI resulted in the assassination of the official candidate
to the Presidency of the Republic and the assassination of the General
Secretary of the PRI. Even with these
conflicts and serious problems the economy remained stable and Salinas was
elected to his sixth and last term in 1994 with victorious animosity. Zedillo
became President with 17 million votes, the greatest democratic legitimacy
given in the history of Mexico. But, after twenty-one days in power, Zedillo
faced the worst economic crises in the history of Mexico, the so-called
December’s Mistake.
Two years after the privatization of its banking
system, in December 1994, Mexico was forced to devalue its peso which set off a
macroeconomic crisis characterized by increased exchange rate volatility,
further devaluation of the peso and was followed by a financial sector crisis
and bailout. The meltdown of the Mexican stock exchanges resulted in the loss
of half of the stocks value and share prices, for major Mexican companies
quoted on Wall Street, dropped 75 percent within a few months. However, after
this situation was resolved a deeper crisis in financial markets came in the
form of the devaluation of the peso and the sovereign-default crises. The
majority of the governmental crises, without a degree of investment (as is the
case of Mexico), were caused by characteristic weakness in governance. If local
people and foreign investors fear the Mexican peso will be devalued, they may
convert pesos into dollars.
The new structure of State debt, during the
Mexican crisis of 1994-95, has been studied widely in order to understand the
way in which financial markets, governments, and multilateral institutions
respond to the new questions of governance. The Mexican crisis raised the
problem of sustaining fixed exchange rates in an environment of high mobility
of international capital. Mexico did not recover because its weak financial
system was strengthened through the intervention of the International Monetary
Fund (IMF). It recovered because it had
benefited from increased exports to the United States as a result of NAFTA and
the accelerated growth of the neighboring U.S. economy.
The economic crises through which the Mexican
economy has passed, aside from the inability of its institutions to limit the
range in social problems, have caused repercussions on the application of
neoliberal economic policy and are the key factors in the deterioration of
social governance. One of the most pervasive and disturbing aspects of economic
crisis is its effect on the most vulnerable population groups. In general terms
the economic policies implemented by the majority of Latin American countries
present similar features, although there are some differences in the design of
the packs.
Although the causes and consequences of the
different economic crises, through which Mexico passed from 1976 to 1994-95,
have differed the crises were preceded by periods of high economic growth that
could not be sustained because of the imbalance the crises caused. The crisis
of 1976 showed the limitations of the economic model that was based on the
principle that economic growth depends on major state intervention. The crisis
of 1982 began with the idea that oil could be used as a lever for economic
development and resulted from an active policy that the State should administer
abundance. This resulted in high
degrees of external indebtedness and an irrational expansion of the state.
Both the international debt crisis of the eighties
and the Mexican crisis of 1994-95, also called the „Tequila effect“, are
considered to have their roots in the financial imbalance in the public sector.
But in comparison, the later crisis (Asia, Russia, South Africa, Brazil, etc.)
had its roots in the financial imbalance in the private sector and is
considered the first global financial crisis to impact the economies of
emerging countries. The Asian crisis exploded just after the crisis that
lowered the Mexican peso. It therefore seems that financial crises occur more
frequently in the later years of emerging economies, such as was the case in
Mexico.
If the democratic social development and the
economic growth of emerging countries is controlled, they are not significantly
more corrupt than more developed countries. The pack of credits given to Mexico
in 1995 by the IMF was a reward for banking with more risk. While more
governments of other countries lend to Mexico, their banks have more security
to cover their loans. In reality, the privatization of the banking system into
financial groups emerged from the „steam“ and complicity among investors and
politicians who took advantage of international organizational finances
channeled to rescue Mexico from the debt crisis. However, their differences in
crisis management took them into highly indebted economies, which had the
opportunity of transferring charges to society.
In 1995, as a result of these events, a program to
modernize public management and eliminate corruption, decentralize public
functions, and reorganize intergovernmental relationships within the federal
system, was initiated in Mexico. The monopoly of power and its discretionary use,
retained by some members in the structures of government, were still the main
source of corruption with impunity, therefore deep institutional reform was
required.
The program pretended to develop mechanisms of
major responsibility and accountability for governmental agencies, in the
matter of management of public services, and also to ensure the major
disposition of established associations with non-governmental organizations. It
is necessary to consider that these non-governmental organizations were the
base of credibility and impartiality before the citizens whom they represented
in human, political, labor, and citizen rights to governments that sustain poor
relations, emanated from the PRI which always tried to incorporate them when
they were more independent.
In 1996, public and private investments in Mexico
were kept under the levels of the seventies and eighties. The results of the
globalization processes confirmed that it had gone in only one direction: the
entrance of transnational and multinational enterprises, now called global
enterprises or contemporary business, which in essence are foreign, have taken
legal ownership of the natural resources, land, etc., and returned few
benefits. For example, the market value of General Electric calculated at
520,250 million dollars, is equivalent to the GNP of Mexico. In fact, 23 of the
greatest transnational and multinational corporations have sales that are
higher than the GNP of Mexico. Neoliberal governments have shown their
inability to reduce the pain of the integration processes through more
favorable negotiations that would allow comparative and competitive advantages
for Mexico.
DAMNED INHERITANCE
At the end of the period between the years 1982
and 2000, which marked the development and implementation of the Neoliberal
State model in Mexico, the results were disastrous. Although there were
achievements in economic growth during the last four years, 1994-2000, the
Mexican economy showed several structural imbalances as expressed in a corresponding
fiscal deficit. As Lomas (2000a) affirmed, President Zedillo’s inheritance also
included the great pressure of debt service from the financial rescue that will
exercise influence over public finances in the medium term. Lamentable as it is
foreseeable the present administration will leave an inheritance to the next
government of a greatly compromised public finance and an even greater
inability to respond to the reasonable demands of the people. Zedillo´s
inheritance amounts to more that two billion dollars (million, million dollars)
in public debt, including the wasted debt of the Institute for the Protection
of Bank Savings or Instituto para la Protección del Ahorro Bancario (IPAB).
Interface Government -
Companies
In Mexico, the main obstacles for managers are
continued crime and robbery, because of an inadequate infrastructure,
inflation, corruption and lack of financing. Many companies still do not pay
taxes.
Unjust Distribution of Income
According to Cepal’s estimates President Zedillo
left a country with an increase in the difference in income distribution, i.e.
high wealth concentrated in a minority and poverty in the majority, from 40.5
to 45.5 million Mexicans. Of these, 26
million are mostly indigenous, rural, and live in misery. The contradictions
were caused by polarized growth, according to Boltvinik an expert on poverty
and income distribution in Mexico. He
stated that, „When the economic pattern that has been followed up to this point
in Mexico is able to generate growth it will be accompanied by a growing
concentration of income and an increase in poverty among the poorest
strata. …the crisis of 1994 produced a
brutal impoverishment of the population…until 1996, when the economy began to
recover, and income again began to concentrate….“. In a period like the current
one, in which the Mexican economy reached a peak over 18 consecutive trimesters
of growth, the benefits went to a very reduced group of people: „only the
crumbs fall down“ states (González Amador and Castellanos, 2000).
Poverty increased from the 36 to 38 percent of the
total of Mexican homes in 1994 from 45 to 47 percent in 1998. Data from the
National Survey of Income-Expense in the Homes (ENIGH) of the National
Institute of Statistics, Geography and Informatics (INEGI) indicates that
between 1994 and 1998 the number of Mexican homes subsisting under the poverty
line with a monthly income no larger than 560 pesos at a constant value of
April 1994 increased from 69 to 76 percent of the total population. In general
terms, the investigators agreed that poverty increased by more than 5 percent
during Zedillo’s term in office. This resulted in a society with big contrasts
in income distribution, where 20 million Mexicans (20 percent of the total
population) live under conditions of extreme poverty, and more than 40 millions
(40 percent of the total population) live below the line of poverty.
In the last three six-year terms the rate of
inflation has risen above the increases to the contractual minimum wages and,
therefore, above the level of the workers' income. World Bank figures show that
42 million Mexicans have salary levels below twenty pesos daily, the equivalent
of less than 2 dollars a day. Between 1974 and 2000, the real wage of the
workers had an accumulated deterioration of 72 percent. During Zedillo’s
government an accumulated loss of 50 percent in real wages was recorded,
registering the lowest purchasing power in the last 18 years. With data from
the United Nations organization, 64.5 percent of the population received
insufficient wages to sustain minimum nutritional requirements; 40 percent of
Mexican women live in homes with low income compared to 20 percent of Mexican
men (Jiménez, 2000). More than half of Mexicans old enough to work were
employed in the informal sector of the economy.
During the period 1964-1981, the gross internal
product per inhabitant rose to 7,776 dollars a year, with an average annual
growth of 3.4 percent. However, after l982 with the implementation of the
Neoliberal State model in Mexico, the growth of the gross internal product
fell. For the period of the Neoliberal State, which lasted from 1982 to 2000,
the gross internal product per inhabitant only grew on the average of 0.3
percent yearly. The National Survey of Income-Expense in the Homes, carried out
by the National Institute of Statistic, Geography and Informatics (INEGI) in
the year 2000, reports that the generation of wealth increased in the last six
years, but the distribution of the wealth became more inequitable, with
alarming levels of deterioration.
In Mexico 38.11 percent of national income is
concentrated in 10 percent of the homes. At the other end, 10 percent of the
poorest hardly receive 1.50 percent of the total, when in 1996 it was 1.79
percent. The income available monthly to 10 percent of the poorest homes was 26
percent less than in 1994, while for ten percent of the homes the reduction was
20 percent (González Amador and Castellanos, 2000). The coefficient of GINI for
the monetary income in 1992 was 0.5086, in 1994 it was 0.5137, and in 2000 it
was 0.4889, which indicates a tendency in the concentration of the national
wealth to decrease, though those with more however continues being high.
Quick economic growth has not resulted in an
improvement in the levels of the population's standard of living, due to the
inequitable distribution of income that impedes the transfer of macroeconomic
benefits. The higher rates of growth that reached four percent, on the average,
of the gross internal product between 1996 and 2000 has not contributed to
improvements in the well-being and standard of living of the family, because
they contribute 2.4 real percent of the product per layer. According to an
analysis of The Financier (2000), for each peso (Mexican currency) that was
generated in the economy in the first trimester of the year, 0.07 cents
corresponded the population with scarce resources (38.11 percent), while the
population with high levels of revenue (10 percent) obtained 50 cents.
Since 1994 when NAFTA was signed regional development
has also been inequitable and unbalanced, subject to processes of economic
separation that were the result of integration with markets of the North. Mexicans with lower revenues per layer are
concentrated in seven States in the Southeast of the country. They represent
less than 10 percent of the national gross internal product, while with a
similar population, six States in the North generate 23 percent of the national
wealth. The pattern of export growth based on cheap manpower allows only that small
group of companies to benefit from the commercial treaties between Mexico and
other countries.
Weakness of Governance
Weak governance in Mexico, for example, had its
beginning in the weaknesses in the spheres of economics, society, culture,
education policies, etc. and in the weaknesses of government institutions,
although in the past the Mexican State was strong in creating institutions and
public policy. The characteristic weaknesses of governance, were official and
private corruption, influence peddling, corruption and inefficiency in the
judicial institutions, and the influence of drug cartels. Moreover,
deficiencies existed in internal security in the form of guerilla groups
operating in rural areas and violence in the big cities.
The governance deficiencies were related to the
uniqueness of the political system, which had its origin in erroneous economic
policies implemented by the wealthy, who then created the organizational design
for the transition of the Mexican State. Mexico has lived with the people
focused more on the ideas of its rulers than on concrete proposals for national
development through institutional development. The Mexican State has been able
to maintain its uniqueness by making political promises that offer social
protection on the one hand and more benefits that would favor the diverse
social groups on the other.
At the present time, in the form seen in Mexico,
the implementation of governance decreased the ability to achieve political
normality. There was an attempt to subordinate electoral democracy to the
governance system that was not necessarily democratic, as is expressed in the
Political Constitution of United Mexican States. The Constitution defines
democracy „not only as a judicial structure and a political régime, but as a
system of life founded in the constant economic, social and cultural
improvement of the population.“ Democratic elections are not only freedom and
fairness as sufficient criteria, but electoral processes that can only lead to
freer and fairer governance when elections are the culmination of a democratic
process and when democracy is not subordinated.
Political Uncertainty and Security of Property
In Mexico’s specific case, a consistently high
factor of political risk (qualified as " BB ", non-investment degree)
is the quality of governance that embraces the quality of the public sector’s
institutions; the efficiency of government services and the government's
capacity to establish macro-economic stability. In an analysis of the dynamic
factors, the estimate of the monthly national risk index is the decisive
criteria for calculating the ratios of imports to reserves and debt to exports.
Socio-political uncertainty is an important component of national risk.
Another important aspect to determine is the uncertainty
involved in the regular transfer of government in order to evaluate the
possible uncertainties caused by elaboration of the laws. The government's
constitutional position (as a result of elections) is usually accompanied by
big changes in the rules and regulations that impact on business.
With regard to the uncertainty in equitable
application of the law, it is important to determine if companies trust the
ability of the authority of the State to protect their property rights and to
guarantee a dependable judicial process. Robbery and crime are serious problems
that can substantially increase the costs of doing business and there is no
trust in the authority of the State to protect people and their property from
criminal acts. The unpredictability of the judiciary presents an even bigger
problem for business operations. Public insecurity in Mexico has put the
country into a situation of near chaos, surpassing other institutions that are
pillars of an already decomposing system, as in the case of the PRI.
The governments’ years in power leave behind „open
wounds in the national conscience“ from the indigenous conflicts of
Chiapaz. The result being: increasing
levels of poverty, the growth of the informal economy, increase in violence and
public insecurity, corruption with impunity, the precarious conditions of
micro, small and large enterprises and the deterioration of the countryside and
farming sector.
In sum, the current problem in
Mexico is good macroeconomics but bad microeconomics.
THE
TRANSITION OF THE RÉGIME OF THE MEXICAN STATE: FROM STATE MANAGER TO A STATE OF
MANAGERS
The pattern of the State party, and more
concretely of the Mexican PRI-State, has ended. The failure of the PRI to form
the federal government and their loss of an absolute majority in the Union
Congress in the last elections was an event that constituted a new stage in the
life of Mexico by placing the alternative National Action Party (PAN) in
political power. Unlike other changes in power that have taken place in Mexico
this one has been a peaceful road taken in an atmosphere of political
stability, culminating in the arrival of a party contrary to the one that had
held power.
During the last four administrations the transfer
of power under conditions of economic and political stability was not evident.
First it was necessary for the PRI State to disappear. During the last sixty
years change occurred more within the party than in the political régime
centered in a State party, characterized as a hegemonic political party. The
PRI was a hegemonic party that held power for a period of seventy-one years,
from 1929 to 2000. It served to sustain a presidential system with
meta-constitutional powers, omnipotent above other powers (legislative and
judicial) and over the spheres of economic life, politics, society and culture.
For the government to change required agreed upon
and sometimes not agreed upon accommodations between the political and economic
interests. First, the President relinquished constitutional powers and the
system of patronage, established by the PRI and given to all the presidents who
had emerged from within its ranks. However, the changed governing party
retained the same presidential structures derived from the political culture of
the Huei Tlatoani, or supreme lord, who ruled over the military, civil and
religious life of our Aztec ancestors. For the political culture and government
régime to truly change, structural transformation of the laws of public
administration would be necessary, as well as strengthening legislative power,
freeing judicial power and delimiting executive power, especially presidential
control over the government and the State.
In the last two decades, since the eighties, amid
major financial crises and a neoliberal agenda to change economic policy,
growth stopped and its decline accelerated during the last four years of the
nineties. This resulted in big
imbalances in the economic processes and the dismantling of the defense
mechanisms of the Mexican State. During the decadent stage of the
PRI-presidential system, corruption increased, social cohesion was destroyed
and the levels of poverty increased alarmingly. Income became increasingly
concentrated „in favor of a minority coinciding in its composition and voracity
with the elite of Creole inheritors and beneficiaries of the colonial caste
system and of the porfirista system.“ So, in part, the defeat of the hegemonic
PRI party was due to the collective rejection of economic policies that
increased the levels of poverty, corruption and social violence. The PRI lost
its capacity to respond when faced with a more active civil society.
Zedillo, the last PRI president, „cut his finger“
to indicate that his successor inherited the power to allow the tri-colored
candidate's election. He was not able to stop the buying of votes or coercion
of the voters. But he did discipline the most reactionary to impede their
stealing the election again and then, when losing in the war with the other
parties, to open the way to a democratic transition that would reinvent the
system. In a few hours it was transformed from a hegemonic party and
authoritarian government régime, to a more democratic system, concluding the
process of democratic transition, and handed over power in conditions of
political normality, without any uncertainty about the change of the government
or regime.
The transition occurred from a single party system
to a democracy. However, this democratic transition was questioned to a certain
extent, because what really happened was a change of the party in power. In any
transition, it is evident that the total abdication of those powers that have
to do with the control of the political process would leave a power vacuum
resulting in adverse consequences. Still more, it remains to be seen if the
democratic system improved the living conditions of Mexicans. Certainly, there
was not a change of political régime, but a deepening of the neoliberal
economic policy that had already been applied in Mexico since the middle of the
eighties. The 71-year era of the hegemonic PRI party ended and it is expected
that it also ended the Mexican presidential era.
The change to democracy after sixty years under
the same political régime and the same access to political-power, has modified
expectations and the operation of national public life. These changes have
partly been the result of filling the vacuum created by the political party
that had been in power. However, the form of the election was highly
questionable in that it appealed to the „useful vote“, and not to the „ethical
vote based on principles and projects.“ PAN built its own place in the
electoral market by conditioning voters to accept the falsehood that it was
time for a change. They explained that „it didn't mean that they were in
contention with neoliberalism but their only goal was to shoot the PRI out of
The Pines“ (Rodríguez Araujo, 2000).
For some skeptics what happened was simply a
change in the way of doing things, rather than in the content of what is being
done. By all means possible during its last three years it was the satanic PRI
that sold the depoliticized youth on the idea of the necessity and possibility
of altering political power to create scenarios which would multiply
opportunities for social mobility, education and employment for them.
The change of political party within the same
régime represented a rupture in the old Mexican political system and continuity
of the processes of development according to the neoliberal pattern imposed by
the interests of transnational capital. This way, the change became significant
because it represented a final balance between a presidential régime and its
neoliberal economic model.
With the change of party in power came the end of
the PRI era that covered a period of seventy-one years, already well known as
the era of the dinosaurs with 22 presidents from the same party. Members of the
„revolutionary family“, had a patrimonial governing style with investiture and
where public goods attributed to the public position were considered personal
property. As well as paternalism the chains of corruption and complicity
facilitated political control through corporate practices, clientelism, and the
corruption of those who had less resources. The corporate interests that
conditioned the votes of citizens also oppressed their political and human
rights. It is interesting to analyze the different presidents’ careers, the
first from the military, who gave way to lawyers, then to economists and
finally a manager.
When considering the change of the Presidency of
the Republic, the end of the first sixty years was different from the last four
years that left an inheritance of economic crisis and political deterioration,
although political decomposition, violence and corruption still persist. In the
last two six-year terms, that of the technocratic presidents who privatized
politics, Salinas (1988-94) and Zedillo (1994-2000) truly represented the two
big local groups of officials and managers politically. The two technocratic
presidents had as a common governing characteristics a personal focus on social
and power relationships. Both fostered
the emergence of complicity between the technocrats and managers enlarging the
capital-politics relationship to the men that held economic power, without
respecting the rules of the system or the correlation between social forces and
politics.
The Mexican technocracy has been insensitive and
indifferent to social problems. Both, Salinas and Zedillo can be identified
more as administrators or managers of economic politics than as rulers. The
strategy they used to implement the neoliberal model consisted of maintaining a
reduced group of technocrat economists in a network of alliances in collusion
with capitalist groups. These capitalist groups, those whom Ortíz Pinchetti (2000a)
named the nomenklatura, had insatiable financial interests and were the main
beneficiaries of the model. In Salinas’ strategy, through the support of PAN,
political leverage was given to the group of managers and financiers. It was their mega-negotiations with
Zedillo’s group (Grove, 2000) which killed the PRI. The decentralization of
power began with Salinas and was deepened by Zedillo. Together they
consolidated the neoliberal economic model.
Salinas first and later Zedillo, governed with
authoritarianism to implant the economic policy imposed by supra national
institutions. They were flexible in
politics where they enlarged political freedoms for pragmatic purposes,
provided they didn't contravene economic policies. The principle was stated
this way; all economic reforms without political reforms are insufficient and
result in dangerous contradictions. The modernization project of the
technocratic presidents, neoliberalization and globalization, were promoted by
the PRI governments. The government
paid dearly because it gave up power and was not able to give benefits to most
of the population because the modernization project was sustained by a
substantially different economic order and guided by the governments that
emanated from the Mexican Revolution.
In Zedillo’s the sixth term in office the Deputy
of the opposition, Batres, accused him of seeking to be a „Robin Hood the other
way around, robbing from the poor to give to the rich….“ The neoliberal
governments confirmed that they acted in way which was „wicked, nothing moved
them and their biggest works were the businesses that in some years allowed
some to be enriched“ (Rodríguez López, 2000). But the unusual thing was that
the same PRI parliamentarian factions abandoned the old habit of defending
their president to criticize the mistakes and inefficiencies of their
administration. Social dissent could only cause loss of the neoliberal
modernization project, which supposed a 25 year period of adjustment, during
which time they sought conserve power, based on the control of the incomes of
the working people and not of capital.
Although privileged with stability and the
restoration of economic growth, with high rates of gross internal product that
reached 7.8 percent in the first trimester of the 2000, Zedillo ended his term
in office without having fulfilled his campaign promise, the so yearned for
„well-being of the families.“ Instead he had dismantled the public institutions
that promote social well being. It was troublesome that the high rates of
growth of the gross internal product were transitory and high rates of
inflation caused more crises than were experienced in the past.
Decentralization of power was initiated by Salinas
and expanded by Zedillo. They consolidated a scenario of power shared with
divided governments, formed by the electoral advances of opponents to the left
of the PRI, which constitute the federal, state and municipal governments' real
counterbalances. The consolidation of this new modernization project
strengthened PAN’s natural belief that „it only seeks reformation in the level
of political administration that should support neoliberal modernization“,
(Montemayor, 2000). In this way PAN advanced the neoliberal and globalization
project and opened the way to a federal and municipal administration in
accordance with „modernity.“
During the last 18 years the PRI suffered an
involution in the adjustment processes of the project. Among the highlights are
its own ideological transformation in making neoliberal principles more
acceptable, its complete opposition to revolutionary ideology, and conversion
to the modern stage of the Mexican Revolution. Montemayor (2000) argues that
the PRI bet, in its obedience, against itself. The project of modernization
„tunneled their structure and, mainly, the understood the value of balancing
forces and groups that participated in the previous Mexican political system.“
For the neoliberals, the adjustment measures taken during the last three
governments in Mexico were correct and, at the same time, the conflicts of the
country only came from the corruption and inefficiency of government príistas.
Another reading of the fall of the PRI-State
régime is that dysfunctionality reached the bureaucracy of the administrative
apparatus. With high levels of corruption and inefficiency, and with an
authoritarian, vertical structure that only responded to the president’s
decision, it showed its inability to give answers to the demands of the
citizens. This type of organization of public administration, according to
Barboza Rodríguez (2000), „generated many useless works and enormous waste.
And, not a few times, one sector builds what another destroys. The Mexicans
only know about those ‘white elephants’ from the dance of millions of pesos.
The tangible benefits are null or poor where there are any.“
In Mexico the XXI century began with the new
paradigm of the manager government. PAN’s charismatic leader, Vincente Fox, won
the election for the Presidency in the year 2000. Fox was the candidate guided
by a marketing campaign that emphasized the régime/anti-régime condition. He
took the PRI out of the presidential residence, The Pines, ending the PRI
régime and beginning a new cycle. In part the people voted more against the PRI
than in favor of Fox who said that his government would bring a transition to a
new democratic régime. In his speech of August 2, when he received his
Certificate of Elected President, Fox stated emphatically: „I will head a
transitional government that is inclusive, capable, and with a vision of a
State with high standards of honesty and quality“ (Macroeconomics, 2000).
The endogamy of the Party-state in power for 71
years had generated into a perverse structure with problems that the Mexican
society would no longer tolerate. Fox was the beneficiary of the decisive vote
of the poor from the big urban centers, who were formerly excluded, from the
votes of the rural areas, and from native stragglers who renounced the PRI.
However, the supposition that the „green vote“ of the rural and excluded areas
would decide the elections in favor of the PRI was correct, although this party
still obtained a majority, though smaller than in the previous federal
elections of 1994. This electoral behavior had not been seen before because the
voters had differentiated their vote in order to prevent a single party from
getting all the power.
In the 2000 elections, for the first time in 71
years, the PRI lost the presidency of the Republic. This was a transcendental event for the political life of the
country because it radically changed the political perspective and national
expectations. The defeat of the hegemonic PRI party, which „progressively
destroyed social cohesion: normally expressed and implicit, that held us
together as Mexicans was due to the government's inclination to favor the
Creole oligarchy and the concentration of monopolized capital“ (Ortíz
Pinchetti, 2000).
On the other hand, Touraine (2000) argues that the
result of the elections put an end to the long reign of the PRI. It had
reinforced the political action and intervention of the State in a country
whose growth had not reduced social inequality. The economy grew but the
benefits of that growth were not distributed, that is to say, it generated
wealth but it also generated poverty. The opposite, the reduction of the weight
of the State, was announced, although the public sector was traditionally weak
in Mexico. Mexico’s entry into the global economy increased the State’s options
for institutional change.
It opened up the Mexican political system for
movement guided by the changes they had made, beginning with protest and public
debate, more than a new political project.
However, this democratic project could only be understood when viewed
from the standpoint of political depolitization.
In fact, Fox’s political and economic project gave
continuity to the technocrats’ project which was not more than a transition,
because the only thing that happened was not a change of political régime but
an alternate party in power. Given the conditions of the system the ideal thing
would have been an alternate party with an alternative, a necessary alternative
to government. In any event, political transition has been possible thanks to
that same neoliberal model as disarticulated to civil society and citizens.
What has happened in Mexico, according to several analysts, is that „a type of
caudillista democracy has triumphed over a weakened left, marked by weak,
unstructured political parties that reflect the decadent, centralist elite“
(Muñoz, 2000). However, it is highly questionable whether the change has
lead to a democratic régime and the death of a dictatorial presidential régime.
More than continuity, the pattern of neoliberalism
increased with the Fox’s rise to the presidency of Mexico. He represents a third movement of the
neoliberal economy begun by Saline. Nevertheless, the technocrats were hit
politically by the managers. The new
political class, which mainly emerged from the local organizations of small and
medium managers in the North, wanted to liberate the country from the
corruption and clientelism of the State party. The Manager State was dismantled
in the rise to power of the technocratic economists. Now with a manager-like
President in Mexico, the Mexican State has become a State of Managers that
treat democracy like good business, called the Coca-colaification of Mexico in
reference to the managerial antecedents of Fox’s transnational government.
According to a Canadian managerial leader, for Fox
the governing of Mexico won't be the same thing as managing Coca Cola, but his
managerial experience will help him to make decisions (Inclán, 2000). The
analyst Rubio (Jiménez Lazcano, 2000) describes Fox as „evidently a practical,
pragmatic person who clearly adapts to circumstances. He has his priorities
very clear and he has a clear sense of who to use and for what reason; he wants
to use each one of the people. And in that sense what we see is a person not
very ideological, not very dogmatic, but very adaptable to circumstances as
they arise, moment by moment."
It is paradoxical that in a country where more
than 60 percent of the population is poor, the elections were won by a party of
the right that proposes to deepen the neoliberal model responsible for the
increase in poverty. Fox’s rise to power, coincides with the consolidation of a
concentration process, an economic oligopolitation, and political
centralization of decision-making (Fazio, 2000a).
With Fox the Mexican presidency is transformed
from autism to democratic caudillism. Fox’s ascendancy to the Presidency of
Mexico, according to Krauze (mentioned by Fazio, 2000b) resulted in „a direct,
immediate switch to managerial power. Wines of new marketing in old wineskins
of caudillism…a caudillism plebiscitary with messianic edges, very dangerous in
a country like ours that finds the separation between the church and the State
difficult“. Nevertheless, the ghost of presidentialism has not gone away with
Fox in the presidency. He has assumed
an attitude of „commander of the town“ because behavior patterns still exist
that encourage it, reinforced by the existing Constitution. A true change in
the régime implies a deep reformation of the State with a new Constitution, and
in which diverse political forces delimit presidential activity.
Fox is the first manger president to arise out of
the local elite from the center of the country. He represents the „electoralist stream“ of the managerial elite
in PAN and especially the stream dominated by the faction from the northern
states or „Monterey Group“. It has
loose connections and is supported by the ideology of the new, Mexican right,
as expressed in current pragmatism or neopanism, and is opposed to traditional
orthodoxy. According to the ex-leader and twice Panista candidate, Pablo Emilio
Madero, nephew of the democratic anti-re-electionist Francisco I. Madero,
„Vicente Fox Quezada’s eventual victory in the presidential election crowned
the agreement of a group of managers.
In 1982, these managers decided, in a meeting in Cd. Juárez, Chihuachua,
to infiltrate and control the National Action Party (PAN) to gain particular
interests. The virtual ascent of neopanism to power constitutes a serious risk
for Mexico because the pragmatic principle of personal interest would take
precedence over common interests. And once in power they would be overcome by
the temptation of authoritarianism to eliminate opponents, which would
discourage the nation“ (Ruiz Rocks, 2000).
Fox’s proposed changes are considered imprecise as
they relate to the panista proposal. According to Loaeza (Rivera, 2000) „The
lower and middle classes are described as not reactionary. On the contrary they want political change,
would like a modern society, and are outward looking, though on the other hand,
would be interested in a reduction of social inequality but not absolute
equality, because that doesn't interest them. They have a vision of an
anti-egalitarian society, they are not interested in equality but freedom.
Freedom with order yes…social justice is not a panista topic…“
Contrary to the current doctrine, the ideology of
neopanism, with certain flashes of fascism, defends the „changarro“ from the
attacks of official populism. With the focus on a distant political social
democracy, the view is that the „useful vote“ doesn’t recognize the difference
in ideologies but operates on the simple desire to reduce the power of the
State Party. And under the representation of „virtual party unity“, the
political class is recomposed with the rise of the managers to formal power.
The managers, mainly from managerial unions in the North of the country, rose
to political power using their managerial unions as launching platforms.
Nevertheless neopanism fought official populism
and the decomposition of the Mexican political system was the main reason that
a new, anti-party populism arose. According to Touraine (2000), this political
decomposition goes hand in hand with the advance of worldwide economic
conglomerates. In the Mexican case it is also expressed as an alternative „to
the Mexican“ that, though difficult can be considered „like a real road for the
creation of a true democracy.“ But in the aftermath of these political remarks,
it is as dangerous to give priority to the fall of the whole substance of their
régime, as it is to encourage the union that is already way too strong between
a vague populism and economic liberalism. The resistance to this populist
tendency attacks the political system at the same time that the capacity of the
State to intervene has to be organized for popular movements. These popular
movements have the capacity to manifest and to express the popular demands of
the less favored sectors, in such a way that they really contribute to the
restoration of public life.
The transition to the new régime has not been so
smooth and soft. The caciques that held political and economic power weren't
resigned to their loss. The death of the wounded PRI has ended in internal
disputes over the little power that remains and the political groups defend
their interests to their share of the power, resulting in violent
confrontations. The smoothness of the political transition leads us to suppose
a pact was made with those with real power.
CHANGE
OF THE PARTY IN POWER: THE MEXICAN STATE OF MANAGERS IN THE NEW PAN -
PRESIDENCIALIST PERIOD
The arrival of the managers to the Mexican State
meant the displacement of politicians with formal power. In other words, what
changed was formal power, because the real power remains unalterable. The
Mexican Council of Businessmen stopped being a pressure group in the face of
the power of the State and became instead the representatives of the managers
in the federal government who determine national economic and political
decisions. That is to say, the political power taken by the conservative groups
that held hegemonic, economic power and the national neo-oligarchy was
subordinated to the interests of transnational capitalism exercising a new
governance strategy. This strategy allowed them to dominate and directly
control the means for achieving their maximum benefit (efficiency), without
necessarily appealing to the mediation of a political class that was highly
paid for the mediation of the arrangements for production factors. This is the
case between capital and work, for example. However, in humanity's history, the
achievement of efficiency has not brought social justice.
The new State of managers administers the existing
order efficiently to guarantee transnational global capital that the best
conditions for investments exist in Mexico. Already the general coordinator of
economic affairs in the transition team guaranteed „zero discrimination“ for
Mexican entrepreneurs. On the other hand, the leader of one of the most
powerful organizations of managers warned that Fox’s government would be
friendlier to the production sector. Fox has a clear vision of the needs of a
company, so he can create wealth and more work sources (Becerril, 2000).
Fox represents the alteration of government and
has stated that the purpose of his public administration is to increase
efficiency in the government's work to a large degree and to eliminate all that
has to do with error and corruption. „I will delimit the functions that reduce
the effectiveness of government administration and damage of the whole society…
…we have to put an end to political and administrative centralism and promote
the invigoration of federalism to drive
the development of the regions and the viability of municipalities, starting
with their vocation and resources and the expectations of their communities.“
(Macroeconomics, 2000).
His project of reengineering the federal public
administration followed the advice of the World Bank. Based more on the
pragmatism of changing the administration without changes to the law, it is
sustained more by horizontal and flexible structures than by approaches to
efficiency, effectiveness, opportunity, pragmatism and quality (Abascal and
Macías, 2000a). The horizontal and flexible structure was articulated in a
strategic plan reaching as far into the future as 2025. It combines managerial
approaches with experience in the public sector. It was formed by super
advisers and super managers who coordinate the work with regard to human
development, security and justice, equal opportunity, and restoration of the
government's institutions, general coordination, Czars (anticorruption and
borders). It also formed Secretaries of State in government, social
development, labor, companies and industrial development, agriculture, and
country property.
On the other hand, the managers have declared
(Becerril, 2000) they are convinced that the new government will be
„friendlier“. They request options for participation in the investment deprived
energy sector (electricity and secondary petrochemical). They reject that it seeks to recapture
populist politics and they trust that the relationship is close enough that
they will be critical when Fox makes a mistake. It is clear that Fox will
govern the Mexican State with a focus on the New Public Management, as if
Mexico was a corporation: Mexico, CORP. which gives the petrochemical and
electric sectors to transnational global capital.
Fox's approach is frank and pragmatic. Madero
qualifies Fox as „pragmatic, a man willing to throw ropes, say big words, buy
votes, anything to win the election… in the name of pragmatism, and I worry
that for him the pragmatic principle is more important than the democratic
principle… (we) shall have to wait and see whether a panista government under
Fox ‘will respect the people of Mexico for criticizing those who are… already
in the government in power or he will do the same thing, which is to eliminate
those that are opposed…“ (Ruiz Rocks, 2000). Fox´s discourse was characterized
by its open style and it broke with rigid protocol. His frankness, businesslike
style and democratic genuineness are points in his favor. Fox has the intention
of making his government a dynamic promoter of development, vigilant of human
rights and pragmatic in administering domestic policy (Churches, 2000).
As a good manager, his pragmatism in solving
problems is his main asset in achieving an „agreement“ of the aspirations among
the various sectors of society. But also his weak point is in negotiation. He tries to create „minimum points of outburst“
where all the political actors simultaneously put on an air of agreement in
economic and political matters. The proposals will be open to questioning by
civil society and legislative power, where a majority doesn't exist for some of
the political parties. It will be easier then to achieve cohabitation that
won’t be unconditional to build the consent necessitated by lack of absolute
control of the Congress. Fox has said in this respect, „my government won't
make overall decisions in economic matters that will be against the interests
of the majority. Nothing will be done without consent or behind backs or
against the will of Mexicans“ (Macroeconomics, 2000). In this sense, there is
consent among the diverse political forces to delimit presidential power by
suppressing his meta-constitutional power and creating an independent civil
service free of the executive’s will.
But Fox’s pragmatism doesn't have an ideological
base. It is be postulated on liberal values but the necessity of escaping the
priísta cage, as stated in Reyes Heroles (2000). Fox declared that his government won't be bitter and it has
demonstrated that it is moving away from the demands interposed against him by
those who accused him of receiving the foreigner’s money. Thus he confirmed certain rumors that came,
in part, from former president, Salinas de Gortari (Hills M., 2000b).
The State’s managerial focus considers citizens as
clients whom it must satisfy with services of absolute quality. The president
exchanged the word client for that of citizen, with a vision on the one hand,
for example, that it is inappropriate to promote the policy of indigenous
community development. Disrespectfully, Fox has called the indigenous people
„vocho, changarro and tele“ in response to their centuries of rebellions
against the capitalist system for the injustices perpetrated against them. To
neoliberalism centered in the forces of the market, the indigenous peoples are
not consumers. Therefore, they are disposable and, in the best case scenario, a
population to be integrated or assimilated into the lowest ranks of the work
force without rights and subordinate to capital, as exemplified by the proposal
made during Fox’s campaign to train them to be „the foreigners' gardeners“.
Political analysts agree that „his proposals have been contradictory, sometimes
retrograde, sometimes hopeful, but always lacking a coherence that would make
the program complete. We have to be
critical of a possible, new liberal version with some attenuation“ (Ortíz
Pinchetti, (2000b).
In this way, the factions integrated into the
directing elite were recomposed of managers to guarantee the continuity of the
economic model, the dimensioning of a functional democracy that matches the
discipline of the market, and the structural reinvention of the system. This
allows a bigger reproduction of capital and deepening of the dominant
instruments to markedly increase
differences and social injustices. But this democracy favored by a
authoritarian free market system is a hegemonic ideology of the elite of
transnational globalized capitalism that imposes decisions to its own benefit.
However the real power remains under the control of transnational capitalists.
On the other hand, the PAN in government will have
to confront the issue of waste during the President's rule. There is evidence
that Fox’s governing style will be less flexible in politics and more
authoritarian in economic politics than previous presidents, although he
affirms that his priorities are to attend to the poor. Under this new
correlation of forces, and with the same rules of separation of powers that
established their autonomy, public matters are managed with more transparency.
The frauds of the public sector and violence of the conflicts are now treated
by the rule of the State and citizens can demand the right to the rendition of
bills and transparency. Establishing the material conditions for law and order
will be one of the government's challenges.
The organization of the new political system will
be conditioned by economic politics. According to Bendesky’s analysis (in
Castellanos, González and Hills, 2000) the country reached a macroeconomic peak
that lasted for more than four years because it „was sustained by factors
hidden in the macroeconomic bills such as the high price of petroleum, the
entrance of foreign currencies that reduced the dollar, and the dynamics of the
economy of United States (which)… can change its tendency and pay the costs of
the whole Mexican society when it is, of course, Fox’s government. Among the
changes necessary would be an adjustment of the exchange rate, increase in
inflation, a bigger external imbalance and an inability to solve the problem of
poverty.“ So the challenge is to maintain economic stability, to increase
economic growth, support competitiveness and increase the productivity of the
economic agents.
The political transition will come harnessed to
economic reform but there won't be social advance. Structural economic reforms
are needed to modernize the regulatory framework of general economic activity
and strengthen the functional structure of the financial system. Cutting social
expenditure in education and public health would reduce the weight of
bureaucracy gradually by transferring these functions from the State to the
private sector. Fox has said that they will reduce the cost of government in
the next six years by subjecting it to a rigorous but gradual diet of federal
public administration. Changes are needed to eliminate the lock on 51 percent
of national investment to give a bigger opening to private and foreign investment
and to invigorate the financial system.
Fox´s government committed to an integral fiscal
reform and to tightening fiscal discipline. However, the IMF recommended
maintaining „wise fiscal policies to assure the continuity of favorable growth
and to avoid the risk of overheating their economy“, (Reuters, Notimex and Afp,
2000). National development was sustained by fiscal reformation, based on the
federal pact to assist in removing the inequalities of regional development,
but this eroded the principle of solidarity.
Privatization and opening the energy sector to
competition, especially the electric and petrochemical industries, won’t work
according to the same managers. „The country functions well… entrepreneurs
don't want to buy Pemex or CFE. As a private sector what we want is to be
allowed to compete, to participate in certain areas of production, to make them
competitive at the international level… it is not necessary to put padlocks on
foreign investment so that it intrudes in the electricity and hydrocarbon
industries. The only rules for national capital and foreigners should be a free
market economy, open commercial prices set by international competition“
(Becerril, 2000).
Amendments to the Third Article of the
Constitution introduced freedom of teaching and with it the possibility of
offering religious education in the schools. Labor legislation also needs to be
streamlined, to reform article 123 to introduce a New Federal Law of Work less
protective of the rights of workers to generate more employment and better
wages. These are some of the new
government's proposals. In sum the deepening of the free market model.
Under the focus of the New Public Management,
Fox’s government intends to deepen decentralization of decision-making by means
of invigorating federalism, a post-PRI federalism to transfer to State
government resources, abilities and responsibilities. In economic matters, this
accumulation of resources, abilities and decisions gives place to what Zaid
called „the Presidential Economy.“ The restructuring project and the federal
government's reengineering are guided by an efficiency approach to the gradual
reduction of the bureaucracy in order to optimize resources and to reduce the
costs of operation.
The agenda of Fox’s government is focused on eight
strategic areas. These are restructuring of the Secretary of Government,
modifications in the procurement of justice and public security, redefinition
of functions in controlling public expense. Also, modernization and reformation
of the energy industry (petroleum and electricity), redefinition of social
development objectives, continuity of the economic project and reactivation of
foreign policy (Chávez, 2000a). In general terms, the prevailing neoliberal
economic policy has not been changed in the last 18 years, but rather it has
been deepened. However, the project of restructuring the federal public
administration assures that „none of the current public servants will be left
in the street without employment opportunities“ (Chávez, 2000b).
The Reformation of the State, the decentralization
of functions and reorganization of government bureaucracy, are required to
improve democratization, governance, public administration, and to impose the
rule of law for legality and justice. The challenge to organize the government
lies in building a system of multi-sector, matrix management of public
administration (Barboza, 2000). This can be done with a dual purpose: to
coordinate the sector’s actions and to redistribute the structures of local governments,
attributes and abilities. Both have as their purpose the reestablishment of
solidarity and social cohesion and the inclusion of the excluded social sectors
in the benefits of development.
The new government's main challenge will be to
build new institutional structures to solve the problems of the new reality
that faces the managerial group in power. For example, those institutions that
impede the practice of monopoly and that sustain governance of the Mexican
society. This governance should be considered a democratic mechanism that
facilitates relationships in the decision-making processes formulating and
implementing public relationships, and establishing a harmonious relationship
among the three powers. In political matters, it highlights the maturity of the
electoral democratic processes, to achieve political reconciliation among the
diverse political forces, to foment political and ideological plurality in the
organs of the State, to drive the processes of decentralization, federalism,
and regional and municipal development.
The new institutions that emerge from the
government's decentralized reorganization should be guided to satisfy the
demands of the citizens thereby opening channels for social participation.
Also, to enlarge democracy by means of the recognition of its territorial
environment and structures characteristic of public organization, the direct
election of representatives, the assignment of abilities to the municipal
government, the coercion capacity, the existence of untapped resources, and the
direct administration of local services.
With a
weak fiscal structure, financing of the basic functions of the State won't be
possible. Other functions of the State will be transferred to civil society and
to the market. Social expense will have a limited margin to maneuver to support
such social policies as education, health, public security, and infrastructure.
A public, lay, gratuitous education, based on values and quality, will be the
axis of social politics. Fox will have programs and mechanisms that reduce
poverty, achieve a fair distribution of income, recover real income, and
translate into benefits for families by means of the generation of employment
opportunities, financial resources, training, etc., for all. Philanthropic
societies and the Catholic church will take charge of developing some of the
functions given to the welfare State, when there existed a separation between
the Church and the State, such as social attention to excluded groups.
The proposed democratic capitalist model for
market economies in Latin American countries needs to be revised so that the
function of the results is expressed in increments of poverty. Some of the main
challenges for the rest of Fox’s administration are to recover the government’s
credibility and genuineness in such a way as to reduce the high index of
poverty by creating one million two hundred thousand new jobs per year, and to
maintain economic growth and development. Correction of social inequalities is
required starting with the reorientation of economic policies. One inevitable topic is how to draft public
policies that will combat inequality in education, health, infrastructure, and
housing.
It was necessary that the State should govern and
act to rectify inequality, create a social economy that is a humane economy,
and humanistic policies in the economic sense with a high emphasis on combating
inequality. Economic policies should be
drafted to generate good conditions of human life and not only change the bias
that gives the market an indisputable hegemony and to guide certain production
bases, but to make the State responsible for combating inequality. Economic
policies have to become unified to reduce poverty through such measures as the
establishment of Social Banking to support families and associated companies,
as well as to create a government salary pact between employer and worker, that
allows workers to recover their purchasing power.
A political system is required that will produce a
public administration that is accountable to the people in such a way that
rulers are brought closer to those they govern and which will permit social
participation in the design and implementation of public policy. However, the
conservative panista speech manages only to recognize the social participation
of private philanthropic non-governmental organizations. Nevertheless this
joint alteration of party power, the civil society that had always maintained a
relationship in conflict with a government that sought corporate control, now has
the opportunity to participate in the design of the country in a new
relationship with government.
A strong concern still exists, however, because of
the presence of certain signs threatening danger in state governments of
panista extraction, such as in the cases of Jalisco, Chihuahua and New León.
The panista governments in these States left a history of repression of those
civil organizations that sought commitments and that criticized the government
in the defense of human rights, labor: political and civic, and sought
institutional answers to situations of violence. This paper supports the
lowering of the profile of the Fox government.
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