From: alessio@cs.columbia.edu (Eduardo Alessio)
Subject: Salinastroika  (largo)
Summary: policica economica, social y ecologica de Mexico
Organization: Columbia University Department of Computer Science
Date: Wed, 12 Aug 1992 16:33:12 GMT

Hola ernredados:
	Esto lo tome de Misc.headlines, mi labor ha sido solo
leerlo y copiarlo para aca.  La resumida fue de alguien mas. Esta
bastante interesante y objetivo. 

	Que opinan?
	Saludos,
	Eduardo

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To grapple with the extremely important internatinal issues involved
I've CONDENSATION the  850-line post "Mexico: SALINASTROIKA AND OTHER NOV "
(made to misc.activism.progressive) to...as it turned out, some 200 lines...

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With the sale of the food processing and distribution agency CONASUPO,
many supermarkets in working class and marginal areas were closed,
some inexpensive goods ceased to be available while others increased
sharply in price. Throughout the society, the privatization process,
which is also extending throughout the rural economy (see below) and
even to the heretofore sacrosanct petroleum industry, is providing an
opportunity for private entrepreneurs to further amass unprecedented
economic and political control over the domestic economy.


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    "Mexico offered spectacular returns on financial investments, and a
    thriving consumer demand from the upper layers of society offered
    a ready domestic market; foreign franchisers and retailers joined
    with local entrepreneurs and established chains to cater to this
    special but numerous segment of Mexico (ca. 15 millions among the
    industrial labor force, established merchants, commercial farmers,
    professional groups and financial interests). Export oriented
    foreign investment and industrial modernization further stimulated
    the domestic market, while the automobile industry also thrives on
    its privileged position in policy circles. But most Mexicans still
    cannot participate: real wages for the majority are still
    declining and absolute poverty is spreading,

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      4) Employment. The Mexican government boasts of low unemployment rates. 
Its periodic surveys show national rates of less than 3% while few individual 
cities report more than 5%. In a country where poverty is increasing, 
nutritional standards are declining and migration is a permanent feature of 
the labor market, such reports may seem unrealistic. Some details from the 
surveys help put this information into perspective: more than one-quarter of 
the labor force works less than 35 hours a weeks, and a surprising 5% of the 
employed reports that it labored without spending any time on the job! Low 
unemployment rates are also the product of a social system which offers no 
welfare or unemployment insurance system, and any who are unemployed must fend 
for themselves to survive. 
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      1) A changing incomes policy. The devaluation of 1982 and the
inflation of the ensuing years contributed to a dramatic decline in
the real purchasing power of wages. With the imposition of the
Economic Stabilization Pacts in 1987 (see chapter 7), this decline was
slowed somewhat, but by mid-1992, the value of the minimum wage had
lost about 65% of its 1960 purchasing power, to some 25% of its 1976
zenith. Of course, because of this decline, the minimum wage itself
acquired a new social significance: it no longer fulfills its legal
mandate of "covering the basic needs of an average family", and
therefore cannot be a yardstick against which to measure worker
well-being.

Throughout the whole formal economy, wage settlements were agreed to
in multiples of this politically established floor, [...] average
wages in the industrial sector during the early nineties averaged
about 1.8 minimum wages; similarly, workers in many commercial
agricultural regions were earning about 1.5 times the minimum. The
basic market basket of consumption goods required for a typical
worker's family cost about 4.78 times this bench mark in 1988, while a
total family income of about 3 times the minimum (2.72) was required
to not be classified as living in extreme poverty. The 1990 census
reports that 60% of the households in Mexico received less than this
standard; 72.4% earned monetary incomes below 4 times the minimum.(5)

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      Among the most notable successes of these privatization sales
were the telephone company (Telmex) and the commercial banking system.
Telmex's sale to a group headed by a wily entrepreneur, Carlos Slim,
together with Southwestern Bell Telephone Company and the France Cable
and Radio Company is a saga yet to be fully revealed. This company not
only is among the most profitable in the world ($1.1 billion profits
on a net worth of $3.9 billion in 1991), but has become the most
heavily traded of the Mexican companies on the New York Stock
Exchange

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            1) in spite of its continuing growth, the large international 
      debt, once the pretext for a draconian stabilization program, has 
      apparently ceased to be a threat because the international banking 
      community is again supporting the Mexican government;  
            2) the specter of hyperinflation continues to be conjured up in 
      the political and economic discourse, permitting the maintenance of 
      selective wage controls and bountiful profits for privileged producers 
      in spite of sharply lower rates of inflation; 
            3) an unprecedented balance of payments deficit, heralded as 
      evidence of internal vigor, is financed by foreign capital which is 
      handsomely rewarded for prolonging the life of the overvalued peso and 
      for creating the facade of a successful economic reform package; 
            4) as the decline in domestic purchasing power and competition 
      from cheap imports have been decimating domestic manufacturing for more 
      than a decade, the regime has rewarded select groups of consumers with 
      attractively priced international consumption products previously 
      unavailable locally; 
            5) although stabilization polices are swelling the ranks of the 
      poor and hoards of itinerant small merchants crowd out established 
      businesses in the market and on the sidewalks, the government boasts of 
      its anti-poverty program which is effectively structured to purchase 
      political support and defuse dissent in marginal areas; 
-- Hit <RETURN> or <ENTER> for more (6% read) -- 
Conf?  


[Continued] Topic 582   Mexico: SALINASTROIKA AND OTHER NOV 

            6) the centralization of control over the nation's productive and 
      financial resources was accelerated by the widely acclaimed 
      privatization of parastate enterprises and banks; and 
            7) a complex and onerous package of tax reforms which is 
      depressing economic activity and reducing the social wage ~a package 
      described as fiscal terrorism by both workers and businesses~ is 
      officially a success story since the budget is in surplus and the 
      bureaucracy is shrinking. 
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 Brigades of "swallows", as the 4 million migratory workers are
called, travel from region to region in search of work as different
crops mature, earning only a precarious existence and exposing
themselves and their relatives to the worst horrors of agrochemical
and gastrointestinal poisoning.


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      The dependence on foreign direct investment is also troublesome.
In a rare public speech, the chief economic advisor to the President,
Jose Cordoba, warned in mid-1992 that Mexico will require more than
$15 billion each year over the next decade in order to maintain the
present momentum.  [...]The implication is that Mexican financiers
will have to begin transferring resources from speculative and
commercial investments to productive projects, and that the very high
propensity to import will have to be reduced.  Both of these changes
would require profound changes in policy and behavior, changes which
are contrary to commitments evolving out of the negotiations for the
NAFTA.



Excerpted from:
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Topic 582       Mexico: SALINASTROIKA AND OTHER NOV 
rich    misc.activism.progressive        5:08 pm  Aug 10, 1992 
(at pencil.cs.missouri.edu)     (From News system) 

/** carnet.mexnews: 126.1 **/ 
** Written  1:38 am  Aug 10, 1992 by dbarkin in cdp:carnet.mexnews ** 
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posted to misc.activism.progressive

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\
\      As we suggested at the beginning of this chapter, however, the program 
is in danger of becoming a Pyrrhic victory. The short-term gains are coming at 
the cost of dismantling the economy and disintegrating the society. Competing 
imports have displaced entire segments of industry oriented towards the 
internal market; producers often transform themselves into importers, unable 
to compete with the price or relaxed quality standards allowed for imported 
goods. The plight of rural producers is even more dire: the onslaught against 
the peasantry has intensified, as government withdrew its support and the 
private sector is concentrating on specific regions and producer groups. 
Dynamic sectors ~the apparent beneficiaries of an internationalized economy~ 
like the maquiladora plants, the auto and computer industries, the financial 
intermediaries, and tourism, are certainly generating attractive profits for 
their owners, and sizable volumes of "non-traditional" exports, but they do 
not create sufficient employment opportunities to meet the needs of the labor 
force, nor will they redistribute income, since they are tightly controlled by 
a small financial elite. 

      The environmental disaster of uncontrolled growth is also coming home to 
roost. The problems of Mexico City are legion and well known. The explosion of 
the main sewage line in Guadalajara as a result of fuel seepage suggested the 
depth and breadth of the damage that contamination has inflicted throughout 
the country. The border's problems are not uniquely Mexican, but the hoard of 
children born without brains in 1992 along the Texas border were all of Latin 
mothers. The President has declared the environment to be a priority, and was 
awarded a prize for his bold statements, but the present strategy offers 
little solace to those who are searching for a more balanced pattern of 
growth. 
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      The cutbacks in the bureaucracy and in public services for the working 
class and peasantry are not simply measures to deliver the existing social 
wage more efficiently; they represent deep cuts in service levels and a 
deterioration in quality. The changes have been so profound that privileged 
employees throughout the economy (including the government) are being offered 
supplementary private sector health insurance, educational and other benefits. 
The other substantial change on the expenditure side has been the important 
reduction in the costs of servicing the debt, both internal and foreign, as 
domestic interest rates fell, and part of the principal was retired or 
renegotiated. On the revenue side, the surprising result of the changes is 
that taxes as a proportion of gross domestic product have not varied 
substantially over the past decade; nor has the government been willing or 
able to impose heavy taxes on the main sources of personal enrichment since 
the policy changes of the 1980s. On balance, then, the government has 
forcefully reoriented its entire program to benefit the rich and shelter their 
incomes from taxation. 





-- 
   Eduardo Alessio				
   504 Computer Science Building	email: alessio@cs.columbia.edu
   Columbia University			phone: (212)854-5291
   New York, N.Y.  10027                fax:   (212)666-0140
Newsgroups: soc.culture.mexican