The problem is not that the economy is growing by 1%, but that the economy is impoverishing millions of people and making the same rich people, as usual, more and more wealthy.
In our country, the final months of last year witnessed the abrupt entry of a workers' movement of great importance. On November 27, for the first time, a packed public square chanted the slogan of a general strike. But this is only the beginning; the principal struggles of the workers, in defense of their economic interests, as well as against the capitalist system, have barely just begun. Though one flower does not make a spring, it shows that spring is coming and that we have to prepare for it.
In this article, we will try to put down some general lines on the economic and political perspectives for the present year, which will, we believe, lead to a qualitatively and quantitatively greater class conflict.
The Economy
Mexico is a dependent capitalist country; its population, its industry, its natural and human riches put it among the 15 most important countries on the planet. Nevertheless, it is a subordinate country, which has built its capitalism in a manner completely subservient to the needs of international capital, especially North American capital.
During the last 25 years, in spite of having experienced periods of crisis and some growth, those who rule us have only known how to ask us for one sacrifice after another; when there is crisis, "in order to get out of it," and when there is growth, "so that it may not be endangered." As a result of this, the minimum wage has fallen by 300%, and more than half of the Mexican population lives in poverty. 15 million Mexicans have tried to flee their suffering through emigration to the United States, and we have changed from being a country that exports food to one that imports food. In spite of this, Fox says that
this is a marvelous country; in truth, it is, but he fails to mention that this country is marvelously mistreated and exploited by a corrupt bourgeoisie, of whose subservient nature Fox is a faithful representative.
But let us briefly review the economic data. Unless otherwise indicated, the numbers presented come from the Secretariat of Finance and Public Credit and correspond to reports on the economic situation, public finances and the public debt in the third and fourth trimesters of 2003.
The banking system
During 2003, the profits of the banks were close to 30 billion dollars; in the
period from January to September, bank profits were only 21,778,600,000 pesos.
In fact, this shows the inability of private banking to survive by itself, given
that from January to September
29,703,000,000 pesos were transferred to the banks as government support.
Production
Fox promised 7% annual economic growth; in reality we could optimistically talk
about an average of 0.6%, which, in fact, means a decrease, given that our
population is growing at a minimum of 2% annually.
The key characteristic of the health of any economy is industrial production,
which has shown a free fall since Fox's administration came to power.
Actually, the fall during three years, taken together, has been 6%; this was
above all owing to Mexico's dependency on the U.S. economic cycle, which we
will analyze later.
Employment
As for employment, the Secretariat of Work and Social Security indicated that in
the last three years a net loss of 584,333 jobs has taken place; that is, every
year almost 200,000 jobs have been lost. Let us compare this with the promise of
1,300,000 jobs annually, which Fox made while he was running for office. From
this we can draw the conclusion that we are owed 4,500,000 jobs.
Fox's policy in regard to jobs continues firm and is in agreement with his "New
Labor Culture." He is destroying stable employment: in fact, of the 584,333
eliminated positions, 90.8% were for permanent workers.
Wages and Inflation
We have witnessed a decrease in inflation to levels below 5%; nevertheless,
this is neither an accomplishment of the government, nor is it the solution of
any basic problem of the economy at all. The fall in the rate of inflation
results from the restriction of the amount of money in circulation that the Bank
of Mexico has carried out for more
than 8 years already. Reducing the amount of money in circulation lowers the
prices of goods and services. Basically, a lack of liquidity in the system in
its entirety forces a stagnation of prices. As for the benefits of low
inflation, there is little to celebrate: for all of 2003, wages increased by a
nominal 5.2%. If we compare this with inflation, which approached 4%, there is
nearly no wage increase.
When we look at the increases by sector, we realize the hard facts that are the
reality. For example, the increases in real terms in the manufacturing sector
were 0.4% and in the assembly-plant industry there was a fall in wages of 1%.
Paradoxically, the increase in productivity of the manufacturing sector was
3.8%; this shows that the government's claim that the workers earn more if
they are more productive, is false. In fact, this year, they were more
productive, and they earned less.
Imports and Exports
Since 1998 there has been a deficit in the balance of trade, that is, Mexico
buys more than it sells. These are the figures from the Secretariat of Finance
in billions of dollars per year:
1998 -7 931.5
1999 -5 553.7
2000 -8 003.0
2001 -9 953.6
2002 -7 916.2
2003* -3 000
* for the first six months
While it is certain that in 10 years time Mexico has tripled the quantity of
products that we export, it is also certain that Mexico is importing much more.
In the last 6 years alone, we have sent overseas, mainly to the United States, a
sum of not less than $45,500,000,000.
Foreign debt and international reserves
The bourgeoisie and their economists will certainly presume that the increase in
international reserves to historic levels has been an "achievement." One
would have to say that, by itself, this has no significance. These reserves show
that there are resources for investment in the economic development of the
country. How is it possible to claim that there are no resources to develop
PEMEX and the electrical industry when billions of dollars are transferred to
the banks, and, at the same time, billions of dollars in the reserves are left
in inactivity? It is said that this is a way of avoiding a possible evaluation.
Nevertheless, no one says that the only way to guarantee the stability of the
rate of exchange is to have a growing economy. Anything else is simply a way of
applying cosmetics to the reality of the situation.
Nor has the public debt been substantially modified: its size represents 26.8%
of GDP, which has meant the annual transfer of $11,602,000,000 that is, almost
2% of GDP.
In short, there is indeed money, but it is used to fatten the national and
international bourgeoisie.
Productive Investment
This is a section in which we can speak of stagnation; the gross formation of
fixed capital is only 20% of GDP, a section in which Mexico is also below
countries like Honduras. As far as productive investment from foreign countries
is concerned, what happens is a true debacle; in 2001 it was 26 billion dollars,
in 2002 it was almost 14 billion
dollars, and for the year 2003, it will probably not exceed 10 billion. For a
dependent economy like Mexico, (which gave up 8 billion dollars every year for
commerce alone and 11 billion for payment of debt interest) it is almost
essential to maintain a certain equilibrium, a stable, elevated level of direct
foreign investment, but, as we see, in two years this has decreased to less than
half, and the tendency will be for the fall to continue.
The economic cycle in Mexico and the United States
The graph below (put together by the Bankers Association of Mexico) shows
that since the beginning of the Fox administration, economic growth plainly
appears to reflect what happened in the United States, which is not strange when
90% of our foreign trade depends on the U.S., and when practically all the
springs of the economy are controlled by the U.S. bourgeoisie.
Economic perspectives
More than 10 years have now passed since NAFTA was put into effect; this is a
period during which the Mexican economy has appeared as an important component
of the U.S. economic system. Such a dependence and subjection to a foreign
economy like that of the U.S. has never existed before in the history of Mexico.
Nevertheless, this subjugation has not meant either improved standards of living
nor perspectives of a mid-term or long-term improvement. Since NAFTA was signed,
more than 8 million people have crossed the border with the United States, in
flight from misery. This exodus, one of the largest in our history, is the best
sign that capitalism is unable to offer an alternative to the working masses of
Mexico.
Our dependence on the U.S. economic cycle finds its political expression in the
subjection of the Mexican government to the United States. The U.S. rulers do
not need discerning politicians or experts in anything to keep this situation
unchanged; they only need a puppet like Vicente Fox, that caricature of a
statesman, who is a faithful representative of his social class, the Mexican
bourgeoisie, servile and unable to act by
itself.
Our dependence on the U.S. economic cycle subjects the perspectives of economic
growth to what could happen in the United States; undoubtedly growth at a
moderate rhythm is possible. Nonetheless, this does not mean any significant
benefit for the working masses. The fundamental problem is that the United
States has entered a long period of economic stagnation, characterized by
periods of little growth accompanied by
more or less serious falls, which will cause important social and political
conflicts. What happened in Japan in the decade of the nineties is a clear
example of what will happen to the United States.
It is really possible that Mexico could have economic growth of between 2% and
3%, but it is almost certain that, sooner or later, we will have a new relapse,
whether with zero growth or with an obvious recession.
Politics
In this framework, the bourgeoisie will try to establish its structural reforms
by all possible means, which will provoke a deepening of the crisis of the
Vicente Fox government, as it becomes unable to satisfy these demands in the
manner the bourgeoisie attempts to.
This does not mean that Fox will not try to establish structural reforms. In
fact, the members of the PAN have already declared that they will urge their
fiscal reforms at the next National Budgetary Convention. Nevertheless, it is
not very likely that the proposal for a VAT will be successfully imposed, as the
members of the PAN propose. Although this might happen, it would not be more
than a declaration of intentions as will be necessary to confront a hostile
congress and, above all, to confront important mobilizations on the part of the
working masses.
The Fox government
The government of the PAN is characterized by this extreme weakness: the program
of the bourgeoisie cannot be fully realized in practice, and this makes the Fox
government look inept in the eyes of the big bourgeoisie. Undoubtedly, they
would not look unfavorably on a possible resignation, if that did not involve
bigger imbalances. For the present, they are concentrating their hopes on
possible replacements, in spite of the fact that almost half of Fox's six-year
term is gone.
As a political organization that most faithfully represents bourgeois interests,
the PAN will be the scene of a confrontation that will become more serious as
time passes and the end of Fox's six-year term approaches. While Fox has used
various ways to strike at the group of Diego Fernandez de Ceballos, this appears
to be the only option of further PAN rule as it faces the failure of the
government, and it is highly probable that a candidate to succeed Fox will rise
from the ranks of the "chief" or in agreement with Fox.
The PRI
The PRI is also suffering a crisis which results from its transition from an
apparatus of the state to a political party. Before 2000, the PRI was led by
direct representatives of the bourgeoisie like Salinas and Zedillo with their
entire gang of technocrats. Although the bureaucratic machine was adjusted to
establish control over a social movement, it remained more or less united around
the executive power, which was its main arbiter and source of privileges. .
When this relationship was broken as a result of the electoral defeat in the
year 2000, a rupture also took place - and this rupture is gradually deepening.
On the one hard, the technocrats, who, at heart, are the most loyal lackeys of
the bourgeoisie, are fulfilling their role better outside of the PRI, whether as
functionaries of the state machine (Gil
Diaz y Ortiz) or directly as employees of large enterprises (the case of
Zedillo). On the other hand, the bureaucrats, lacking presidential patronage,
are depending solely on the control, great or small, that they enjoy over their
unions, peasant organizations, neighborhood organizations, federal entities, and
regions. Thus they are creating many small PRI's, each one defending its small
power preserve, each one offering distinct qualities to the bourgeoisie, and
each one confronting the others, which, inside or outside the party, appear as
dangers, real or imaginary, to what remains of their slice of power and
privileges.
Elba Esther Gordillo corresponds to those members of the bureaucracy who believe
they will be able to hold on to their privileged position thanks to a servile
posture toward the executive power. Her head-on failure in the attempt to impose
a VAT on medicines and food will further weaken the members of her coterie in
the bosom of the PRI. They will not break with the PRI, because outside of the
PRI the perspectives are no better than inside, but they have neither the same
politics nor the same interests as the other groups inside.
Madrazo is only one of many local political bosses in the PRI; he agrees with
them that the structure of the party must be maintained as the only hope of
regaining control of the state machine. What those people say is an example of
demagoguery rather than a serious intention. We see an example of that in the
budget debate. While they opposed the VAT on medicine and food, they did not
hesitate to vote together with the PAN for the budget expenditures and revenues
which can be summarized as "more for the rich, less for the poor." Something
like that will happen in the future: they will be the opposition on something
that costs them little, and they will be with the PAN when the future of the
regime is endangered.
Another layer of PRI politicians are those who depend directly on union, peasant
or popular organizations. These are politicians who can be strongly disputed by
their supporters, and even forced to adopt positions that at other times we
would consider unimaginable. This sector can be dragged along, unless it is
swept away by events.
The PRD
The PRD is, perhaps, the organization which, owing to its composition and
relation to political power, is least susceptible to a deep crisis like those
which the PRI and PAN are experiencing and will experience. At the same time,
the PRD is the only national party capable of being affected in a constructive
manner by the movement of the masses.
For the moment, the bureaucracy has established a statutory blockade, a kind of
armor, to prevent the workers and the youth from participating in the PRD. At
the same time, the bureaucracy is forced to use more or less aggressive language
from time to time. Nevertheless, every serious movement of the workers and the
youth will be sooner or later reflected in an intervention in the party and will
open up spaces for the construction of genuinely leftwing and centrist currents
inside the PRD. But undoubtedly it will be events which lead to a change within
the PRD, not changes in the PRD which force events, at least as far as the
workers movement is concerned.
A sign of this is the fact that on January 21 the leaders of the PRD and the PAN
signed an agreement to run joint candidates in at least four states: Chiapas,
Durango, Chihuahua and Oaxaca. That is, the leadership of the PRD is again
orienting toward an alliance which blurs the party as an alternative, confuses
its militants and workers in general, condemns the party itself to become a
front man for the PAN and to disappear in real terms in the four states, given
that in all of them, it will be the PRD that supports the PAN and not the
reverse; exactly what the PRD does not need is to appear before the workers as a
prop for the government.
There is no doubt that it will be the crisis of the regime, as much on the
economic and political terrain, but above all the big mobilizations of the
masses, that break with the bureaucratic and servile logic that is favored in
the PRD. Nonetheless, it is a fact that a big layer of the present leaders in
the long run will prefer to defend the system rather
than the working masses. For this reason it is urgent from now on to prepare the
rank and file for a truly revolutionary and socialist alternative inside the
PRD, which is the only thing that can transform the party in a progressive
direction.
There is no doubt that the next period will continue to be characterized by a
deepening of the erosion of bourgeois parties and institutions (even though it
some intellectuals enjoy confusing those who listen to them by talking about a
crisis of politics in general), and by an abrupt entry, ever more notorious and
decisive, by the workers movement.
The workers movement
The crisis of the official unions continues. Cracks appear on all sides, and the
situation is such that already many leaders are beginning to change what they
say and even pointing out the relevance of a general strike, as is the case with
Hernández Juárez. They do this from fear of losing control of the situation
inside their own unions.
Events continue to drag many leaders along. In many cases the union bureaucracy
cannot gamble on making things unpleasant with strikes in order to negotiate
halfway results later on. This is the case at the Mexican Institute of Social
Security, which will soon face a struggle to defend its conditions of work and
retirement. We could say much more about the electrical workers, whose struggle
against privatization with take place with the leaders of the Mexican
Electricians Union, or in spite of them.
Other sectors that have traditionally constituted strong leftwing currents in
the bosom of the official unions, like the National Education Workers
Coordinating Committee (CNTE), will take new positions after years of
stagnation. The teachers union leadership is seriously eroded, and while its
control mechanism still allows it to obtain artificial majorities in the
congresses, divisions inside the PRI itself will create opportunities for the
strengthening of the CNTE, provided that a policy of linking up with all other
movements in struggle is carried out and isolated action and erosion are
avoided.
State workers will be protagonists in struggles on different fronts. One of
them, perhaps the first of the season, will be against Fox's attempts to fire
50,000 workers.
A movement that advances by defending itself, a bourgeoisie that goes backwards
while constantly attacking, these will be the mark of this year. Events on an
international level, including in the United States, show us that things are
changing, and that although at different tempos, the hour of response is arriving not just
of saying, "Enough!" and resisting.