Globalizacion

Economic Neoliberalism: Mexico for Sale

By Francisco Duarte

Editor’s note: This article was submitted in Spanish and translated into English by Rhea Rehark-Griffith.

Mexico, with its 130 million inhabitants, is a country of contradictions, being very rich and very poor. It is not rich because of its nearness to the United States; it is rich despite its neighbors.

The richness of Mexico is cultural and culinary and, due to its mountainous geography, it possesses enviable material richness, the very characteristic that attracted the conquerors (conquistadores) of the past and calls forth the ambition of the transnational corporations of the present. Mexico has riches underground, in its forests and mountains, its mining industry, the extraction of hydrocarbons, its fishing industry and enormous human capital in its labor force of more than 50 million people.

We will explore briefly some of these riches and the destructive economic system that produces these contradictions.

Industrial mining is one of the riches of greatest importance. Mexico is the foremost producer of silver in the world, 11th in gold extraction, 12th in copper, second in fluorite, third in bismuth and fifth in lead. According to data obtained in 2013 from the Chamber of the Mining Industry of Mexico, this sector of the economy brings in 1.5% of the internal gross national product and contributes 328,000 jobs directly and more than 1,600,000 indirectly, all of which makes it one of the most important sources of employment in the country, placing it as the fourth largest generator of income with US$22.52 billion, according to figures from the Instituto Nacional de Estadística y Geografía (INEGI).

In contrast, poverty increases even in the most important centers of mining production with the resulting consequence that the labor force is obliged to emigrate to look for better opportunities. The State of Zacatecas, the principal producer of silver, is, at the same time, one of the places with the greatest rate of emigration on the part of its inhabitants.

The petrochemical industry, even with the fluctuating value of its product, is one of the principal riches of the country, ranking 12th or 13th in the world. During the third quarter of 2008, petrochemical wealth brought in 45% of public expenditures, which averaged around 5 billion pesos (The Secretariat of Income and Public Credit). Although its contribution has been reduced, it continues to be an important source of income. Curiously, this is the enterprise that contributes most to the national debt with a figure of 219.42 billion pesos (Banorte). Another worry is that in the regions of mineral exploitation, the prices of everything increase and the population finds itself becoming displaced and impoverished.

As for the tourist industry, Mexico is among the eight most visited countries in the world with destinations such as Cancún, Ixtapa, Riviera Maya, Puerto Vallarta, Acapulco, Los Cabos and Teotihuacán, among others, along with the attraction of the cultural tourism of the 50 Magical Villages. The economic value of this industry is the equivalent of 9% of the internal gross national product generating 10.75 billion pesos following only the value of exports, foreign investment and the contributions sent from families, all of which produce 7.5 million jobs.

Perhaps behind those lines of luxury hotels with prices beyond the reach of many is where the contrast between the rich and the working class becomes most evident. As in the case of the petroleum regions, tourism increases the price of all the services and consumer goods.

Who would not like to live in a well-administered country that counts on mineral riches, hydrocarbons, waterside/coastal sites, forests, tourism and even a supposed surplus of exports? The fact is that Mexico is a global leader in producing poor people and emigrants. In the words of M. Gonzales de la Garza, a Mexican writer, “Mexico is divided between those who eat when they wish to and what they wish to eat and those who eat once a day or once in a while.”

Some suggest that the problem is the result of the corruption of the government, impunity, low salaries, little education, violence, the cartels, drug addiction, the growing economic inequality, the informal economy and/or the low rate of tax collection. Each of these is a factor that worsens the situation, but these factors indicate the symptoms and not the illness, the effect or the cause.

The real problem in Mexico is of an administrative nature with a neoliberal economic system that has been sinking the country since the administration of President Carlos Salinas. Since his tenure, the PRIistas and the PANistas—both right-wing parties—have followed the same line of privatization, arguing that the state is not a good administrator and cannot be when corruption rules and the popular will is a joke.

One of the most disastrous consequences of the economic system is to put on top a small group of multimillionaires who are calculated to be among the richest in the world. They are an elitist group among the political and impresario class who live like kings amid surrounding poverty in a country with 50 million poor.

One percent of the wealthiest receive a portion of wealth greater than that received by 50% of the poorest taken together. Indeed, 40.3% of Mexican workers earn the equivalent of a minimum salary from one or two jobs, that is, 90–180 pesos per day (COPAMEX), which is approximately the cost of one kilo of meat, or three or four gallons of gasoline. It is estimated that about 20 million people survive on an income of approximately 40 or 50 pesos a day.

This group of oligarchs operates in complicity with the judicial, legislative and executive systems, all part of the same mafia, which is undoing the state of law. Widespread corruption has permitted them to commit electoral fraud and to kill or silence media or political adversaries who are seeking real change.

This corrupt system has contributed to extant inequality and the creation of an unsustainable climate of violence and lack of stability. This criminal group of oligarchs—whom Andrés Manual López Obrador, progressive leader of the opposition, calls with justification “the mafía of power”—has dictated the economic policies of the country for the past 80 years participating in the monopolies of the communication systems, mining, transportation, the hotel industry and the hydrocarbon industry.

As a result, the materials that the country exports are among the cheapest abroad. Concurrently, the oligarchs form pacts with transnational corporations to which they inexplicably turn over the national wealth almost without paying taxes—some at less than 1%—making it possible for them to pay poverty-level salaries to their workers, without the protection of labor laws. Moreover, the criminal system protects the rich while abandoning the impoverished poor and sick people—like the biblical lame person at the door of the temple—without silver or gold yet with a voice that ought to be heard in the upcoming elections.

*****

Francisco Duarte was born in Sonora, México, in 1946. Along with his wife and three children, he emigrated to the United States in 1980. For some years, he worked in restaurants and in the agricultural fields of the San Joaquin Valley. He is author of several self-published books including Martians under the Sun: Reflections of an Immigrant and two booklets of poetry. He participated as an activist in many historical marches. Contact him at fresnohouse@hotmail.com.

  • The Community Alliance is a monthly newspaper that has been published in Fresno, California, since 1996. The purpose of the newspaper is to help build a progressive movement for social and economic justice.

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