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Mexico gripped by economic stagnation
Below are excerpts from the political resolution
approved by the September 2004 convention of the
Mexican Liga de Unidad Socialista.
With the government of [President] Fox and his party,
the PAN [Partido de Accion Nacional, historically the
main right-wing Mexican party], now having spent more
than half of its term in office, the political
leadership of the country is gripped by a crisis that
is deepening in response to virtual economic
stagnation.
This combination has the ingredients for detonating a
social explosion inasmuch as the masses, and
especially some sections that are organized
politically and in trade unions, are expressing in a
more and more forceful and determined way their
discontent and resistance to the neoliberal policy
imposed by the imperialists and codified in the
so-called Washington Consensus....
The complete opening up of Mexico to the international
market with NAFTA [the North American Free Trade
Agreement], which was decided by the ruling group of
the PRI [Partido Revolucionario Institucional, then
the government party] in 1994, in agreement with most
of the dominant sections of the capitalist class, has
reached the end of its first stage. The “structural
reforms” (privatizations, “flexible” working hours,
growing unemployment, liquidation of the historic
gains of the workers and peasants, starvation wages)
that have been carried out up until now have exhausted
their effectiveness.
Both Mexican and, above all, foreign capitalists are
demanding implementation of what they call the third
generation of structural reforms. This means an
acceleration of the neoliberal offensive, which was
stalled by a number of factors, notably the
international capitalist business cycle (the recession
of 2001-2003) and in particular the popular resistance
initiated with the uprising of the Zapatista National
Liberation Army (EZLN) in Chiapas in 1994
The indices of this semi-stagnation can be seen in the
table below, which demonstrates the downward tendency
of GDP growth rates over recent years:
1998 5.0%
1999 3.6%
2000 6.6%
2001 -0.2%
2002 0.9%
2003 1.2%
The estimated growth rate for the current year is
between 3.0 percent and 3.5 percent, a figure that
will hardly compensate for the preceding stagnation.
After being hitched to NAFTA, the Mexican economy,
because of the enormous gap between it and the other
two parties to the treaty, has been affected most
negatively in the first 10 years.
Since the Mexican government did not get a treaty that
included compensation for the weakest economies (on
the model of the European Union), the free competition
between the gigantic economies of Canada and,
especially, the United States made the Mexican economy
look like a bruised and abused dwarf.
In 2001, the first year of the last recession, Mexico
was the only country in the OECD (The Organization for
Economic Cooperation and Development, the rich
countries’ club, in which paradoxically President
Salinas enlisted Mexico) that experienced not only a
decline in economic growth but a negative growth rate.
In its “Informe de 2003,” the Banco de Mexico noted
that between 2001 and 2003 the country received
foreign investment of $29,750,000,000. Of this,
$12,500,000,000 came from the sale of Banamex [one of
the country’s major banks].
The downward trend in foreign investment, a key factor
in the NAFTA project for the Mexican government,
directly affected exports (most of which were made by
subsidiaries of transnational companies operating in
the country). In May, in the U.S., market imports from
China exceeded imports from Mexico (13 percent as
opposed to 10.3 percent for Mexican imports). And the
share of Mexican imports is continuing on the
downslide in the face of China’s competitiveness,
based on extremely low labor costs (40 or 50 cents an
hour in China as against $2.50 an hour in Mexico and
$15.90 an hour in the U.S. in 2003).
The report also notes that payment of interest and
principal on the public and private debt was
$82,700,000,000. The technocrats themselves drew the
conclusion that has been amply publicized by the
media: “Mexico has ceased to be attractive for foreign
investors.”
The great curse afflicting the working masses is
unemployment. From December 2000 to December 2003,
770,000 jobs were lost in the manufacturing sector,
which is the most dynamic employer of labor. It is
estimated that in 2004, with the weak recovery,
300,000 jobs will be created. . . .
But, as is known, 1.2 million people enter the labor
market every year. If we subtract from this the large
number of young men and women who go looking for work
in the U.S., there are still at least a million
workers who will need to find work and mostly will not
find it....
From the figures that the rulers themselves offer, an
annual growth rate of 10 percent would be necessary to
meet the demand for jobs. Just looking at this figure
is enough to see the structural impossibility of
providing full employment for the Mexican working
population, which is destined to suffer the terrible
curse of unemployment until the system that produces
this evil is destroyed.
The article above first appeared in the October 2004 issue of Socialist Action newspaper.
(415) 255-1080 -- socialistact@igc.org |
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