Envío Digital
Central American University - UCA  
  Number 167 | Junio 1995



The Four Flanks Of The Crisis

David Fernández

Mexico's overall crisis is bearing down from four flanks: 1) the economic crisis; 2) Chiapas and its national significance; 3) internal divisions within the hegemonic group in power and 4) society's democratic demands.

These four elements are linked together and thus quite complex, but they can be considered relatively autonomously for analytical purposes. The interaction of the four permits one to conclude, at least provisionally, that Mexico's crisis is so deep it could be fairly characterized as the crisis of the end of a system. If this proves correct, the country faces two possible scenarios: an authoritarian solution or an institutional one, the latter implying serious democratic reforms of the state.

Will the Medicine Kill the Patient?

It is clear that Mexico has entered a new era in its national history, perhaps starting with the indigenous insurrection in Chiapas in January 1994. For years, the governing group put all its chips on an economic project with neoliberal characteristics. Far from strengthening the economy, however, it brought few macroeconomic achievements, while leaving the micro-economy in crisis and the economy as a whole indisputably fragile.

Mexico has not experienced such intense instability and crisis in 60 years. The economic model is on the ropes, as is power and the way it is exercised. There is a crisis of values measurable in the level of confusion about the future. The economic crisis, partly buoyed by the monetary lifeline sent by the United States, is critical and long term. The labor crisis--seen in the many layoffs while another 900,000 youths enter the labor force per year with no hope of getting jobs--is at the base of many other social crises.

Despite all this, the Zedillo administration is still bent on continuing the economic model. On March 9, the government issued what it calls The Plan to Face the Emergency--its third economic plan for 1995. It is based on a radical monetarist policy.

The plan's primary objective is to "dry up" the economy by increasing interest rates, which should put a "ceiling" on the peso's exchange rate with the dollar and also on prices. It is hoped that the dollar price will go down when fewer pesos are chasing it. According to the plan, interest rates should absorb pesos that would otherwise pressure the dollar or be used to buy goods, thus inciting inflation. The danger is that this strategy might work so well it would totally dry up the economy, leaving no liquidity for production and thus causing the closure of numerous businesses, as is already happening. Some analysts note that this monetarist medicine cannot be prescribed for more than 90 days, or it might kill the patient.

The most pessimistic analysts estimate that one in four Mexican businesses will go under this year. That means that, of 1.8 million productive units, close to 450,000 will close their doors, declare suspension of payments, moratorium or bankruptcy. This will leave almost 2.7 million Mexicans without a job, bringing Mexico's 1995 unemployment level to about 14?15 million. This would in turn be a source of greater social and political instability.

No one doubts any longer that the country will undergo a profound economic recession in 1995. The government itself admits that the economy will contract by 2%. Independent estimates range as high as 10%.

The "Success" Will be a Disaster

All of this means that, even if the economic plan functions as authorities plan, nothing will free Mexico from the recession and generalized unemployment. In other words, even if the plan is "successful," it will be a disaster, because it will reduce the size of the economy, concentrate incomes even more and generate more poverty.

Another aspect of the plan is the creation of a strong new currency--Investment Units (UDIs)--to replace the weakened peso. UDIs are an index linked to inflationary growth. Something similar was applied in Chile during the Pinochet dictatorship, aiding only the large capitalists while negatively affecting the middle class. In Mexico the UDI is only used by the banks, but in the future some merchants may fix prices in UDIs, just as they now do in dollars, as a stable reference point for establishing the peso price. The UDIs thus serve to hide inflation and are used to "alleviate debtors' problems and promote investment."

Curiously and contradictorily, UDIs are designed for hyperinflation, not deflation. When there is deflation they can be lethal to businesses and banks that can't generate real resources. It is possible, then, that the government is also hedging its bets, in case its recessive economic plan fails and hyperinflation is unleashed. If there won't be any inflation, why the UDIs?

Many analysts and politicians see the current economic crisis as the straw that will break the back of the official PRI party. The PRI is making its moves without taking the pulse of the people, approving initiatives as unpopular as the increase in the value?added tax, or the privatization of gas production, for which it will have to pay a high political cost.

The National Security and Research Center, a department of the Secretary of Governance, sees the main problem for Mexican national security not as drug traffic or the wave of political crime that has recently triggered assassinations of well?known personalities, but as the economic crisis. This official body is considering the possibility of unorganized, spontaneous social upheaval--a result of grassroots rage--in the third quarter of the year.

With the economic disaster, the government has completely lost the social consensus that it won in its first two months. This makes the military solution that appeared to be its solution of choice to the Chiapas conflict impossible for now. The Secretary of Governance has been forced to open negotiation channels with the opposition and with the EZLN to gain political breathing space. This is the context of the proposal for a National Political Accord with all parties, the willingness to find a solution to certain post?electoral problems and also the interview with Subcomandante Marcos in Guadalupe Tepeyac and the reinitiation of the government? EZLN dialogue in San Andrés Larráinzar.

Despite all these gestures, however, the government clearly does not want serious negotiations in Chiapas. The arrogant and disparaging attitude of government officials toward EZLN leaders; the irresponsible accusation that CONAI, presided over by Bishop Samuel Ruiz, sponsors indigenous demonstrations and creates obstacles to peace; the unacceptable government proposals for a relaxation of tensions--equivalent to a Zapatista surrender and concentration of its forces in one area--all suggest that this parentheses in the Chiapas conflict is defined with precise deadlines.

Chiapas: Not a Happy Ending

The Zedillo government could retake the initiative, allowing it to launch a military offensive in Chiapas, if the following three possibilities become reality:

1. Zedillo manages to convince public opinion that the economic emergency has been surmounted with the help of international financial support, the payment of Treasury Bonds and economic stabilization.

2, Zedillo manages to control his government team, calming the internal PRI conflicts, and more carefully regulating the relationship between the party and the government.

3. The negotiations with the EZLN take too long or fall apart.
The government team is already taking steps to promote all three scenarios, which could become reality in the medium run.

Zapatista sympathizers throughout Mexico are being watched, in a plan that appears to be preparing for future control. The national budget readjustment following the devaluation resulted in budget cuts for all state entities except defense. There was even a significant budget increase for the Army, which is the only enterprise able to offer jobs to Mexicans today.

The opportunity that the Chiapas indigenous insurrection opened to the national democratic movement--which even the government itself recognized-- risks being closed again at a very high social cost. It is morally and politically imperative to take advantage of this situation while it lasts, broadening the movement even more.

The armed movement is not only an inescapable reality but it must be recognized that it has had an indisputable social and political impact, however much the democratic movement has been and continues to be an attempt to transform the state and make war unnecessary.

It is also necessary to realistically recognize that the pressure of a popular military force has opened and continues to open political spaces as long as it remains strong. This is because the rule of law in our country has become so vulnerable that it's practically nonexistent. Calls for legality by those who consistently refuse to respect laws can have no credibility.

The government faces several choices: socially isolate the EZLN, demonstrating that it has no "real willingness to negotiate," or surround it militarily with either a "scorched?earth" offensive or a "surgical" offensive against its leadership. If the political cost of any of these solutions is too high, the state could choose not to fire the first shot, but use the cattle ranchers and their "white guards" to initiate the offensive, then send the Federal Army in later, only to "pacify" the region. The government strategy towards the left and the democratic movement appears to be to coopt and divide them, while keeping the Chiapas phenomenon isolated and neutralized.

Only one possibility is open in the democratic camp: a confluence of the different social and political forces that share a belief in the need for a radical democratic reform of the state and a change in the economic development model. This means that the different sectors must dialogue; that one group must not disqualify others; that different interests must be woven together in priority and timing, subordinating none. It means defining objectives, roles and concrete coordination mechanisms.

The axes of this confluence could revolve around a small and precise agenda: the defense of sovereignty, wages and jobs, and the end of the party?state regime. The economic crisis and the corruption of former and current officials has not yet been linked up with the Chiapas crisis and the post?electoral crisis. The national agenda is still disassociated from the Chiapas agenda. If the link were forged, the democratic bloc would be substantially strengthened.

Speeding up the negotiations in Chiapas so as to wrap them up quickly could be as bad for the democratic movement as aborting them would be. Pressuring the EZLN to become one more political force, without having won any fundamental democratic and social commitments from the governing party, would be unfair, dangerous and mistaken.

Politicians, Drug Dealers and Bankers

When Zedillo took power in December 1994, the first challenge he faced in order to govern was to reconstruct the governing group itself--its internal alliances and the serious conflicts engendered by the assassinations of Cardinal Posadas, Colosio and Ruiz Massieu. He had to find new formulas for social relations and political alliances.

Zedillo also had to assume Salinas' six?year legacy of problems, among them the devaluation, the Chiapas conflict and the Tabasco electoral problem. But the real "hot potato," the one that seriously complicated Zedillo's task, was the isolation of the PLI's diverse political groups from each other.

Zedillo's first recomposition attempt was to name the new Cabinet. Seeking to create new spaces of governability, Zedillo achieved a balance of forces, bringing representatives of the diverse national political families--even of the three drug cartels operating in Mexico--onto his team. He laid the foundation for overcoming grudges or at least created a new framework in which to resolve them.

But pressures from "modernizers" in the government did not stop, and the economic crisis accelerated the internal power issues to some degree. At the same time, the necessary political flexibility of governance and the offensive against the Salinas de Gortari brothers opened new fissures.

Initially, Zedillo tried to handle the post?electoral conflicts differently than his predecessor Salinas had: he offered no concessions to the opposition. The economic disaster, however, forced him to substantially shift that policy.

Nota:Inicio | Contactenos | Archivo | Suscripciones The insubordination of the PRI members in the state of Tabasco put a stop to this new intention, because that rebellion was not really a local issue. Hank González's own economic interests in Tabasco and his group's political interests throughout the country are so strong that they could not lose social control and public administration. These concrete interests have prevented any post?electoral solutions in Tabasco, Chiapas and Veracruz, which makes dialogue between the EZLN and the Zedillo government even more difficult.

One more expression of the unresolved conflicts is that Manuel Camacho Solís, former Peace Commissioner in Chiapas, wants to join a group of dissident PRI members, intellectuals and PRD members to form a new political organization with a social democratic tendency, which could compete with the growing rightwing PAN.

In the midst of this total crisis, we are seeing a new pact in Mexico today by the national elites, whose hegemonic center seems to be a broad alliance among technocrat politicians, drug traffickers and financial leaders (even given the neoliberal model, Mexico's 24 multimillionaires are inexplicable without drug trafficking). A bi?party model, and in the worst of cases a four?party one, built on their basic loyalty to a shared opposition to the government, could be functional for this alliance.

No one can predict the solution to the governing elite's crisis. For some, the spectacular assassinations that Mexico has witnessed are signs of weakness. For others, the PRI members can afford to kill each other because they are still very strong.

The Strategy Is Not Yet Clear

The demand for democracy from society, though it has its own Achilles' heel, is powerful, and continues to have weight in the national scene. Demands for national sovereignty, democracy and social justice now cross over different political and social movements in the search for unity and a common strategy.

The crisis has reactivated the social movement. The current leadership role played by the union of Route 100, the capital's public transport company, stands out. The union was severely affected when the government declared the company in bankruptcy--unconstitutionally, of course. The university unions and some industrial unions have also reactivated in a spectacular way, as demonstrated by the independent march on May 1, International Labor Day.

Despite the need for unity during this crisis, however, the democratic movement has tended towards division. The III National Democratic Convention, held in Querétaro, showed both the social movement's potential and its Achilles' heel. The most conservative tendencies on the left, disguised as radicals, have led it toward apparent disaster despite the Program issued, which tried to build unity. There was no true fusion of the different tendencies nor were the objectives, roles and functions of each tendency made concrete in the framework of joint action. Once again the central intent was to subordinate one group to another.

The project of the Democratic Revolutionary Party (PRD)--a political force interested in national democratization--shows significant fissures even though it is unified in fundamentals. The dilemma seems to be between re?issuing the old leftist party, which has certain legitimacy within the broad political spectrum as loyal opposition to the government, or becoming a new type of political movement, which is more or less discredited among certain democratic strata but could put up a real fight for power. The PRD seems to be dealing with the question of whether to give the government the opportunity to reconstruct or push for its total disarticulation. The possible options are to combine dialogue with pressure or push the crisis to the point of totally crumbling the country's institutions in order to later reconstruct them along new lines. The strategy for democratizing and radically reforming the state is not clear, but the democratic movement is at least moving and pressuring for a democratic transition in Mexico.

Mexico is undergoing the crisis of the state party's whole system. But it is not only the PRI's crisis; it's a crisis of all institutions in the Republic, including the different political parties.

The crisis is structural and inevitable, but not irreversible, nor is its solution necessarily positive. After 70 years there is a possibility in Mexico of a real dispute over how to run the nation. But the old project of domination by economic elites and political corruption could be rearticulated and even be functional for the opposition.

The current crisis may lead to a undemocratic, authoritarian and exclusionary solution, unfavorable for the people, in which the neoliberal adjustment program would be consolidated, with more repression of the people and less democratic space for society. But it could also lead to a profound reform of the state, with new republican democratic activity. It all depends on the unity in the democratic sector, the agreements that can be reached, the international alliances that can be built, knowing when to take advantage of the regime's weaknesses. It all depends on the democratic sectors having clear principles and remaining independent of the state.

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