I asked David if he would send us something on Mexico. Unfortunately, I had trouble with the footnotes. Maybe I can get him to engage in any discussion that follows.
MEXICO: 25 YEARS LATER Towards a new understanding* David Barkin Universidad Autónoma Metropolitana Xochimilco, Mexico City Mexico is the wunderkind of Latin America. After suffering the "lost decade" of the 1980s, alongside most of the other countries of the region, apparently, the country has been successfully "retooled" to meet the challenges of globalization. Not only did it reorganize its productive structure so as to take advantage of its accession to the GATT (now World Trade Organization, or WTO) and implement a thorough unraveling of trade barriers that led to an important increase in international trade, but it also has made the transition required by its integration into the North American Free Trade Agreement. In the midst of a litany of social and economic disasters in other parts of the hemisphere -from the profound crisis of Argentine society, the challenges facing Venezuela, the continuing toll of violence in Colombia, to the seemingly intractable problems of setting the Central American republics on a path towards economic development- why should I choose to focus on the problems facing Mexico in this period and in the coming years? Rather than attributing this nay saying to the whims of a "spoilsport," I would ask you to consider my analysis as a basis for reflection about the profound contradictions wreaking havoc on the country and about the dangers of continuing with the present strategy of unbridled international integration. Finally, I will end on a positive note, considering some possible alternatives that groups in Mexico are already attempting to implement. A brief economic history: Without going into details of methodology or the niceties of its social significance, I find that a brief exploration of the purchasing power of minimum wages in Mexico a convenient metaphor for following the country's economic history during much of the XX century (Figure 1). Suffice it to say, for present purposes that after a lengthy period of unprecedented prosperity from 1935 to 1970, popularly known as the Mexican miracle, a seemingly endless series of crises ushered in a period of declining real wages that brought the minimum wage index its lowest point, since it was instituted in 1934. Although its social significance is different today, than it was at its zenith in 1976, there is no question that real wages have been declining for a substantial part of the population for more than a quarter century, and that more than one-half of the population finds itself living in poverty; The deterioration in personal incomes was accompanied by a dramatic shift in the geographic distribution activity. With a new emphasis on the maquiladora as the source of dynamism for the integration of the economy into the global marketplace beginning in the mid-1980s, the northern border region acquired a new significance that it is still unprepared to manage. More than 3,000 firms were established, employing in excess of 1.3 million people at its highest point, in the semi-arid reaches of the Mexico's "semi-arid" north; concentrated in four enormous cities (Tijuana, Cd. Juarez, Nuevo Laredo, and Matamoros) and more than a dozen smaller border cities, local governments do not have the fiscal resources or administrative and human capacity to manage this unbridled growth. Internal migration became a powerful force, polarizing the country by reorienting population growth northward. A second source of economic growth, the automotive sector, has also been thoroughly transformed with integration. It went from being a highly protected industry producing high cost products for the local market, to an important part of a global industry assembling vehicles with parts produced in all three NAFTA countries, and boasting at least one of the most highly productive plants on a global scale. This industry was also relocated from its historical orientation to the concentrated local markets in the central part of the country to new installations in the deserts of northern Mexico to facilitate the importation of auto parts and the export of finished vehicles; this further heightened pressures on scarce water resources and desert ecosystems, and encouraged even more migration from the declining states in central and southern Mexico. Ironically, in spite of the dynamic growth of these two sectors, the Mexican foreign trade balance has been in deficit since the early 1990s.(Figure 2) Although somewhat reduced in the most recent period because of the sharp decline in real incomes, the "deconstruction" of the industrial sector and national policies facilitating imports has led to a very important increase in foreign trade, and most especially the import of inputs for the production of consumer goods. Unfortunately, this led to the massive import of basic agricultural products, thereby placing the peasantry at risk, along with tens of thousands of small enterprises, unable to survive foreign competition. The Bottom Line: Mexico's people have gone from riches to rags. During the decades following the Revolution, Mexico enjoyed years industrial growth, the consolidation of an industrial labor force, and the modernization of agriculture, along with important improvements in living standards, and the availability of educational opportunities and medical services. While it is true that inequality in Mexico increased substantially and political control grew progressively more oppressive, by the mid-1960s there was a sense of optimism that pervaded the country, incorporating virtually every segment of society. The dramatic reverses of the late-1960s and political unrest generated by the inability of the system to continue delivering on the promises of the "revolution of rising expectations" ushered in a lengthy period of multiple crises and political struggle. During the first half of the 1970s, significant segments of the capitalist class engaged in class warfare against the central government's attempt to protect wages, initiating an unprecedented halt of investment activity that thrust the country a process of social and economic conflict. It would take more than a decade for the dust to settle, after which a new group of financiers were in control and were reshaping the economy to prepare it for its full integration into the global marketplace. The decline in real wages and living standards was accompanied by the burgeoning of the informal economy and the emergence of a process of social disintegration and a flourishing drug economy. A deceptive period of social calm followed, a result of a new period of price stability achieved by the imposition of a draconian incomes policy; a creative package of "bribes" bought widespread popular support for policies to promote international integration. Mexico's pretension to become part of the "first world" was symbolized by its incorporation into the Organization of Economic Cooperation and Development, and the opening of negotiations for its accession to the North American Free Trade Agreement. The imbalances created by an overvalued exchange rate, financial improprieties and the dismantling of the domestic productive structure provoked the devastating devaluation of December 1995 that caused widespread suffering extending into the middle class and merchant sectors. The new model is dependent on foreign investment (in new plants, in securities and in Mexico's foreign and internal debt) offers attractive opportunities to young professionals in the financial, communications and information technology sectors. Alternative models for social and economic organization Not all Mexicans are passively waiting to be pulled down into this morass of declining real wages and increasing immiserization. In spite of its seeming irrationality, millions of peasant families continue to plant native maizes for their own use and that of their neighbors. As many as 15 million people are claiming membership in ethic communities, although many of them no longer speak an indigenous language or otherwise qualify for such status by census standards (which reports about 6 million indigenous people). In the aftermath of the Zapatista uprising in 1994, hundreds -if not thousands- of indigenous communities have affiliated with the Congreso Nacional Indígena and embarked on local and regional programs to insulate themselves better from the problems of the national economy. These communities are searching for ways to exercise a modicum of self-governance in their internal organizations and in the management of their territories. Without going into more detail than would be appropriate in this short presentation, suffice it to say that indigenous and peasant communities are searching for ways to strengthen their organizations and their ability to survive at the margins of globalized society. In addition to maintaining relations with migrants and continuing to produce their basic needs locally, they are looking for ways to diversify their economies. Among the areas that are becoming important are ecotourism, artisan production and water management. I have been working with several of these projects and can succinctly summarize their strengths: they involve initiatives that attempt to identify ways of inserting innovations into existing community structures to produce new commodities and services. They are most successful when the goods can be placed in niche markets that protect the producers from the withering forces of international competition or costly systems of intermediation. In other instances the projects offer communities the opportunity to produce marketable services (e.g., culture- or eco-tourism) or establish ecosystem management programs that generate income from joint implementation programs under the Kyoto Convention for Combating Climate Change or regional efforts to protect or enhance watersheds and forests. The most successful of these programs to construct alternatives to globalization have a common commitment to not simply relying on new products or services. They explicitly include programs to reinforce local capacities for social, productive and environmental management along with some measure of investment to maintain or expand the local or regional possibility of supplying the basic commodities required for survival and community welfare. Thus, the process of diversifying the productive structure is predicated on strengthening existing institutions and defending inherited productive and ecosystem management practices. These are the fundamental elements for moving towards the sustainable management of regional resources. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
