Mexico’s Financial Crisis and the Washington Consensus
Like many other countries in Latin America, Mexico ran into extreme economic difficulties in the early 1980s and dealt with these by radically reorganizing its economy through a process of economic liberalization. The causes of the hemispheric economic crisis were numerous, including the 1973 and 1979 oil shocks, a general switch from long-term fixed interest rate loans to short-term variable interest rate commercial loans, financial deregulation and a dramatic drop in commodity prices. The result for many Mexicans was economic disaster. Although the region as a whole experienced massive capital flight and rapid increases in debt, Mexico’s economy was the first to be completely overwhelmed. The economic situation there became extremely worrisome for the institutions and countries to which Mexico was indebted; it was feared that if Mexico was allowed to default on its debt, other Latin American countries might follow its lead. This spurred Washington, the IMF, and international commercial banks to establish a “rescue package” for Mexico conditioned on implementing neoliberal reforms which emphasized fiscal discipline, redirected and reduced public spending, ordered the elimination of barriers to trade and the deregulation of the business environment, and instructed the creation of incentives to attract foreign investment and move expeditiously to privatize state enterprises. Profitable to some, these free market policies immediately began to have a devastating effect on the lives of many Mexicans, particularly on the indigenous population; as the reforms were broadened in scope, Mexico’s economy continued to plummet when it came to adversely affecting the poor and marginalized.
Under the presidency of Miguel de la Madrid (1982-1988), Mexico continued to liberalize its economy despite nationalist criticism that, among other things, this would destroy the country’s industrial base while principally benefiting foreign producers. Surprisingly, as Professors Skidmore and Smith have noted, unlike many other Latin American countries implementing neoliberal economic policies, “Mexico did not resort to pervasive, large-scale authoritarian repression” in order to maintain stability. However, this was not because the reforms were not painful for Mexicans; it was because of the country’s unique political reality that was completely dominated by one party, the Partido Revolucionario Institutional (PRI). This situation was also complemented by “key attributes of the Mexican political system,” such as “its restricted competition, its control of working-class movements, it autonomy from private interests, and its tactical flexibility.” Therefore, liberalization was able to proceed relatively smoothly for the first decade, without the egregious levels of violence which accompanied the process in other Latin American countries.
In 1990, President Salinas took his most dramatic step for the country regarding the neoliberal restructuring process, announcing an ambitious plan to initiate a free trade agreement with the United States. The plan was extended to include Canada in 1992. Despite popular movements in opposition to the regional trade initiative in all three countries, negotiations moved forward. In Mexico, the North American Free Trade Agreement (NAFTA) was sold to its citizens as an opportunity to attract foreign direct investment, ameliorate social problems, build credibility as a democratic state, and to lock in and institutionalize the process of economic growth and liberalization for Mexico. In 1994, NAFTA came into effect, and along with it came the Zapatista insurrection.
Impetus for the Zapatistas
The Zapatista rebellion in Chiapas represented the rejection of a developmental trajectory dominated by an economic perspective that venerates the free market. More importantly, it is part of a historic struggle for land rights, human rights, political autonomy, cultural recognition, and the right to a decent life, for which indigenous people throughout Latin America and across the globe have striven for, but for centuries rarely achieved. The state of Chiapas is the poorest in the country, with poverty rates at a staggering 75.7% in 2005, according to The National Council for the Evaluation of Social Development Policy. Indignation resulting from such mournful statistics, which were not a recent development, played no small role in the approaching insurrection. As the Zapatista National Liberation Army Declaration of the Lacandon Jungle stated in 1993, just prior to its revolt,
“We have nothing to lose, absolutely nothing, no decent roof over our heads, no land, no work, poor health, no food, no education, no right to freely and democratically choose our leaders, no independence from foreign interests, and no justice for ourselves or our children. But we say enough is enough! We are the descendants of those who truly built this nation, we are the millions of dispossessed, and we call upon all of our brethren to join our crusade, the only option to avoid dying of starvation!”
Although social and economic tensions between the wealthy landowners of the region and the typically impoverished indigenous people of Chiapas had long existed, the armed uprising began on January 1, 1994, and purposefully coincided with NAFTA’s debut. The Zapatistas took up arms to culturally distinguish themselves within Mexico in order to draw attention to their opposition to the government’s discrimination, neglect, and indifference.
The rebels sought a greater degree of political autonomy; to acquire guaranteed access to justice; to be able to obtain an improved standard of living through increased employment opportunities; the ability to exercise control over the education of their children; and finally, the right to defend themselves against the foreign economic homicide that could result from being impaled by NAFTA.
As Cultural Survival Quarterly has pointed out, although the Zapatista rebellion has at least partially “opened the door for indigenous Mexicans to reach the national agenda,” it is not only a struggle against the “ethnocentric, mono-cultural, homogenizing state apparatus,” but also a defiant stand against U.S. economic pressure and the worldwide trend of bowing to the masters of economic liberalization. The most direct effect of NAFTA on the people of Chiapas has been lower market prices for their main local cash crops, coffee and maize; however, the revision of Article 27 of the constitution allowing the privatization of ejido communal land reserved for the indigenous as a sacred trust, was also a devastating blow to the traditional indigenous livelihood. This was done so that from that point forward and through a variety of means, land reserved for the indigenous could begin to be lawfully transferred into the hands of private business interests, permanently separating the indigenous from their land. While to some observers this might appear to be an insignificant side effect of trade liberalization, when one realizes that the people of the region were already struggling in a supreme manner just to survive on a daily basis and deriving the bulk of their nutrition from the availability of maize, it becomes clear that this constitutional change was far from negligible.
According to a study conducted by the Washington D.C.-based International Relations Center (IRC), between 1999 and 2004, Mexican farmers saw the price of maize fall by half due to an influx of subsidized U.S. agricultural imports. Concomitantly, a North American Congress on Latin America (NACLA) report points out that the cost of tortillas increased from 1.9 to 5.5 pesos per kilo between 1998 and 2003. As if these trends were not taking a sufficient toll on the average Mexican, the concentration of tortilla production in the hands of large-scale business also has increased, contributing substantially to the fraying of the country’s cultural fabric that has formed around the cultivation of maize.
Monetary Roots of Government Repression
The Zapatista movement, formally known as the Ejército Zapatista de Liberación Nacional (EZLN), has faced unyielding resistance from the Mexican government. The reasons for this are multifaceted, but the fact that the Chiapas region contains a huge amount of natural resources is of unquestionable relevance. With 30% of the country’s surface water, this state has proven attractive to hydroelectric developments and is home to the Manuel Moreno Torres facility, the largest plant of its type in the country. In 2005, according to International Energy Annual (IEA), hydroelectricity was responsible for 13% of the country’s electrical generation, with the majority of that being generated by Chiapas’ Grijalva River.
Among the state’s natural resources are petroleum and natural gas. According to the national petroleum company PEMEX, the country’s southeastern basins, which include the Chiapas-Tabasco-Comalcalco oil producing area, have been among the country’s most important producers since the 1970s. While they have been a critical source of oil during the last few decades, they will also continue to play an important role in Mexico’s energy future. PEMEX’s Prospective Resources report, published in January 2008, clearly states that, “in the short and medium term, the exploratory activities will be mostly focused on the Southeastern Basins, where oil production is expected to continue.”
Natural gas, which the IEA estimated made up 27% of Mexico’s total energy consumption in 2005, is another resource of undoubted importance and as the U.S. Department of Energy points out, “most of Mexico’s natural gas is produced in the southeastern part of the country… primarily in the southern Chiapas and Tabasco regions.” Moreover, since “natural gas demand is climbing rapidly in Mexico” there will surely be increased pressure to secure unhampered access to the region. Although the EZLN is not currently preventing the exploitation of all of Chiapas’ natural resources, the region’s strategic importance to the country is exacerbating the level of conflict between the EZLN and a government fearful of a secessionist movement. As a result, indigenous rebels of the region are in direct confrontation with numerous outside business interests who would prefer not to have to worry about the fate of their present or future investments. This could help explain the government’s resistance to the area’s push for greater autonomy, while also demonstrating that international economic forces are formidable enough to persuade a government to harass, disenfranchise, and even massacre a troublesome segment of its population, if need be, as it proved to be capable of doing at Acteal 1. It seems apparent that
“There is opposition to a process of redistribution of power that would permit their reconstitution as peoples-their social and political re-articulation, consolidation and revitalization, which would even contest the big business expansion into the natural resources in indigenous regions.” 2
With these incentives for the government to react harshly and swiftly against the EZLN, it is rather remarkable that the movement continues to exist.
The Role of Global Civil Society
Interestingly, part of the reason that the EZLN movement has been able to perpetuate its existence, despite such a determined effort to crush it, is due to the support the movement has managed to garner from a globalized civil society. Technologies such as the internet and video cameras have made it possible for the EZLN to generate worldwide sympathy and support for its struggles against free trade and for political autonomy. The EZLN was able to mobilize assistance and assemble a group of “highly educated indigenous intellectuals,” who helped to create “hundreds of local and regional grassroots organizations with authentic leadership, and the accumulated wisdom of indigenous struggles throughout Latin America. 3” This support has been crucial for the movement, not only to help gain it prominence internationally, but also in terms of providing for its physical security. Indeed, as John Ross, author of Zapatista! noted, “if civil society had not risen to their defense and filled Mexico City’s great Zocalo Plaza with 100,000 supporters to force then-President Carlos Salinas to call off the Mexican military and declare a cease fire, the EZLN might never have survived its first month as a public entity.”
False Hope under Zedillo and Fox
While the government’s response to the Zapatista movement has generally been repressive in nature, there was a brief period where it looked as if constructive steps forward would be taken. The prospect for progress was encapsulated within the San Andreas Accords on Indian Rights and Culture signed in 1996. If these accords had been implemented, they would have granted autonomy, addressed recognition of the country’s indigenous, returned indigenous lands to communal stewardship, and demilitarized the otherwise rebellious region. The negotiations were considered a landmark for indigenous struggles within Latin America. Unfortunately, President Ernesto Zedillo vetoed the agreement on the pretext that it would allow Mexico’s indigenous to consider succession from the nation. Since then, attempting to make these accords work has been a primary goal of the EZLN. However, pursuing this goal has not kept them from democratically electing “good government councils” in popular assemblies and constructing autonomous schools and health clinics.
With the election of President Vincente Fox, it appeared there might be hope for progress in the stalled negotiations. After all, Fox claimed during his election campaign that if he won he would solve the Zapatista problem in fifteen minutes. Unfortunately, when he received the opportunity to demonstrate the validity of his claim, he ultimately failed. In the end, what resulted under his administration with regard to the EZLN was twofold. On one hand, in response to the growing opposition to neoliberalism’s affects in Mexico, Fox began “armoring NAFTA,” in the words of U.S. Assistant Secretary of State for Western Hemisphere Affairs, Thomas Shannon. Although officially this was done to protect the “economic space” from “the threat of terrorism and against a threat of natural disasters and environmental and ecological disasters,” it was obvious that much of this was merely equivocal rhetoric meant to encourage the steps being taken, which would end up protecting NAFTA from threats other than those just listed. As Laura Carlson of the Center for International Policy pointed out, it is well known that,
“the counter-terrorism/drug-war model elaborated in the Security and Prosperity Partnership and embodied later in Plan Mexico (the Merida Initiative) encourages a crackdown on grassroots dissent to assure that no force, domestic or foreign, effectively questions the future of the system.”
As this “securitization” of economic policy proceeded, Fox also decided to de-escalate the situation in Chiapas by ordering the removal of troops from territory held by the EZLN as well as from surrounding areas. Although the sum of these policy initiatives represented a failure on behalf of the EZLN to achieve their aims through negotiation and a deepening of the types of economic policies that fueled their uprising in the first place, the subsequent period of relative peace at least contributed to the functioning of a de facto EZLN government, which is now estimated to extend throughout roughly 15% of the state.
Felipe Calderón and the Question of the Zapatistas
Since the questionable election of neoliberal enthusiast Felipe Calderón, the situation of the EZLN has taken a turn for the worse. Vincente Fox shared Calderón’s basic economic perspective, Calderón narrowly prevailed in a very contentious race for the presidency against Lopez Obrador, in which the latter, as well as most of his supporters, were vehemently opposed to the continuation of neoliberal economic policies in Mexico. As Lopez Obrador announced, “We are going to revamp the economic model, because neoliberalism isn’t working.” Calderón’s suspect squeaker victory left him with a weak mandate and a polarized country. In response to this lack of overwhelming popular support and the gradual increase in resistance against the government’s economic policies, especially prevalent in poor and indigenous regions, he has relied heavily upon the military—which has now begun to be somewhat subsidized by the U.S.—to maintain a “mano dura” or “iron fist” throughout the country.
The manifestation of this approach is particularly acute in Chiapas, where the government has complemented its “mano dura” approach with a divide and conquer strategy aimed at undermining the EZLN. With regard to the use of such tactics, Calderón is building upon what previous administrations already had begun: an attempt to create and train anti-Zapatista paramilitaries within the state by establishing various programs that can be tapped to yield land grants that often are in EZLN-occupied zones. These questionable land titles that Calderón has been handing out end up in the hands of anti-Zapatista families and organizations, which, according to plan, are commonly indigenous themselves, such as the Organization for the Defense of Indigenous and Peasant People’s (OPDDIC). Frequently these families, and organizations that they are often a part of, have ties to the government and/or paramilitary groups. These land titles then were able to provide the pretext for using force to oust those who support the Zapatistas from those newly titled areas just handed out by Calderón. As Ernesto Ladesma, head of the Chiapas-based Center of Policy Analysis and Social and Economic Investigations (CAPISE) said regarding the rise of paramilitary violence in connection with land evictions in early 2008, “The situation in Chiapas is serious and violence is on the rise. The public should know this.”
The other component of Calderón’s strategy—increased militarization of the region—has been documented by CAPISE, which has reported,
“on the fifty-six permanent military bases that the Mexican state runs on indigenous land in Chiapas, there has been a marked increase in activity. Weapons and equipment are being dramatically upgraded, new battalions are moving in, including Special Forces—all signs of escalation.”
It seems plausible that if enough violence erupts between the EZLN (which has refrained from retaliation as of now) and the paramilitaries, the fighting then could be conveniently framed as indigenous people slaughtering one another. This would give the military just the excuse it needs to launch the next stage of its offensive against the defiant EZLN. While it’s true that the mayor of Chiapas hails from the left-leaning Partido de la Revolución Democrática (PRD), it’s unclear whether this anti-neoliberal sentiment would translate into support, considering how many were angered by the EZLN’s refusal to endorse PRD candidate Lopez Obrador in his presidential race.
In the U.S. it is doubtful that Barack Obama’s election will automatically usher in a new era of U.S.-Mexican relations that would relieve the underlying causes of the EZLN’s current plight. Despite the fact that Obama has consistently criticized President Bush’s neoliberal economic policies for having a ruinous effect on the U.S. economy, he has not yet said or done anything that would allude to a readiness to extend this attitude to the Calderón administration, in order to get it to reverse the progress it has made in liberalizing the Mexican economy. As the Latin News phrased it, Obama has “laid the basis for a close working relationship with the Mexican president,” as opposed to a potentially confrontational or tough one, stoked by such irritants as drugs, immigration and possible unwanted revisions of NAFTA (from Washington’s perspective). While Obama has claimed “our diplomacy with Mexico must aim to amend NAFTA,” he may desire to alter only the environmental and labor standards included in the deal, “which he believes have done little to curb NAFTA’s failures.” In sum, although great change is not to be expected, under Obama Washington will be more likely to pressure Calderón to halt any prospective bloody military confrontation with the EZLN, if indeed one should erupt. Mexico would be well advised to prepare itself to work with another Lula, which Obama may well become, with short spurts to the left, shifting to center-right initiatives when it comes to dealing with the economy. While it is likely that Obama will work to improve labor and environmental standards, it is not in the cards that the new U.S. leader will, at this time, risk substantially roiling the diplomatic waters by assisting the EZLN’s efforts at self-rule.
As 2009 approaches, Calderon’s policies appear to be sedulously aimed at undermining what modest success the EZLN has had thus far. However, due to the attention the EZLN was able to muster during its armed uprising—albeit at great cost—it appears that he will not be able to utilize raw force against the EZLN, without unacceptable political cost, unless his strategy of co-opting indigenous peasants and armed proxies in Chiapas is able to create favorable circumstances for such military action. Unfortunately for the EZLN, Obama’s election doesn’t seem to justify much hope. The White House is not about to undergo an ideological shift of sufficient magnitude to fundamentally affect the root cause of the Zapatistas’ suffering; Mexico’s neoliberal economic policies. Yet, the present Chiapas scenario could play out in a variety of ways; hopefully the iconic Subcomandante Marcos was being overly pessimistic when he stated in late 2007 that, “The signs of war on the horizon are clear. War, like fear, also has a smell. And now we are starting to breathe its fetid odor in our lands.”
Although hundreds of EZLN members have died over the years in this conflict over culture, livelihood, natural resources, participatory democracy, and ‘soft power,’ it could be argued that the movement has met with rather significant success. During the initial stages of its uprising, the EZLN managed to acquire large tracts of land and has been able to retain control of them.
These areas are now being governed according to the principles of participatory democracy, closer to the way in which the local indigenous community traditionally lived. Most importantly, they are living nearer to the way in which they desire to live. Their struggle has raised awareness about inequality, the devastating effects of NAFTA, and the desire of many in Mexico to have more of a say in decisions that affect their daily lives. Unfortunately for the EZLN, modern ‘globalized’ and ‘liberalized’ economies such as Mexico’s do not question their policies unless forced to.
There are deals at stake and profits to be made; central to these concerns are Chiapas and the EZLN. In other words, if measures are not taken by the EZLN to denature prospects of conflict, it appears that squaring off with Calderón’s “mano dura” could mean the EZLN is likely to face a renewal of violence with the Mexican authorities before his term ends in 2012. While the path to peace and autonomy is far from clear, it seems as if defensive preparedness, avoidance of conflict with the paramilitaries and a focused attempt to expose their ties with the government, as well as renewed efforts to preemptively draw the attention of the international community to events in Chiapas, would represent a logical starting point. Whatever decisions the EZLN makes, such efforts will likely require unflinching courage and dedication to the Zapatista cause, as its members will see themselves confronting an opponent that would very much like to make an example out of their resistance to neoliberalism, and which is likely to have the backing of powerful domestic and international political-economic interests.
1 A massacre that was committed by paramilitaries; 45 men, women, and children were slaughtered while assembled within a church
2 Survival Quarterly, Spring, 1999. Volume 23, Issue 1, Pg 48. Focus on Zapatista Rebellion in Mexico/ Indigenous Rights
3 Ibid. pg 31