Historia del Neoliberalismo en México - Miguel de la Madrid (11/07/2024)

Neoliberalism in Mexico: A Historical Overview

The Rise of Neoliberalism

• The recent history of Mexico has been significantly shaped by neoliberal economic, social, and political doctrines, which prioritized free markets and strengthened large private corporations.

• This shift aimed to dismantle the welfare state established post-Revolution and roll back gains made by workers and popular groups over previous decades.

• Since the establishment of neoliberalism, vast private fortunes were created while public enterprises were sold off, leading to widespread impoverishment among the population.

Economic Policies Under Neoliberalism

• From Miguel de la Madrid's presidency to Enrique Peña Nieto's administration, the Mexican government focused on free trade, privatization of state-owned companies, and reducing public spending.

• Labor relations were made more flexible; financial regulations were eliminated, leaving productive sectors vulnerable to foreign corporations. Workers faced pressure to accept lower wages for competitiveness.

Consequences of Neoliberal Policies

• Despite strict adherence to neoliberal programs, promises for a better future remained unfulfilled; GDP growth was minimal while employment levels remained inadequate.

• Poverty persisted at alarming rates with increasing income inequality—rich became richer while the poor suffered deeper poverty.

The Beginning of Economic Crisis

• The era of neoliberalism in Mexico began on December 1st, 1982 when José López Portillo handed over a bankrupt nation to Miguel de la Madrid amid severe economic crises.

• Inflation soared close to 100%, with unprecedented public sector deficits and stagnant growth affecting productive sectors severely.

Debt Crisis and IMF Intervention

• By late 1981, oil prices plummeted from $36.31 per barrel in January to $31.00 by year-end due to global oversupply—this marked the end of an economic boom for Mexico.

• As interest rates skyrocketed from 6% in 1980 to around 14%-15% by late 1981 underlined a growing debt crisis that culminated in August 1982 when Mexico declared it could no longer meet its debt obligations.

Impact on Latin America

• Following Mexico’s declaration of involuntary default—the first modern debt crisis in Latin America—other countries faced similar fates as their debts doubled between 1978 and 1982.

Economic Transformation in Mexico: The Neoliberal Shift

Introduction of Technocrats and Neoliberal Policies

• Miguel de la Madrid, a member of the PRI, initiated economic reconversion aligned with neoliberal principles upon taking office in late 1982, supported by a new generation of technocrats.

• Many technocrats, including Carlos Salinas Gortari and others, were educated abroad and shared similar ideological views. Most held positions in the financial sector.

• The arrival of these technocrats was facilitated by the economic crisis at the end of López Portillo's administration and setbacks in popular movements, including repression against independent unions.

Economic Measures Implemented

• Under de la Madrid's government, VAT increased from 10% to 15%, nationalized banks were privatized again, and external debt restructuring began as part of opening Mexico to international markets.

• Workers protested for wage increases due to deteriorating living conditions; teachers' unions led significant civic strikes demanding economic reforms.

Natural Disasters and Economic Fallout

• In mid-1985, two devastating earthquakes struck Mexico City, overwhelming the government's response but showcasing civil society's solidarity efforts that saved many lives.

• The government's inability to manage this disaster compounded existing grievances against it amid falling global oil prices which de la Madrid termed an "economic earthquake."

Inflation Crisis and Economic Agreements

• By 1987, inflation surged dramatically alongside a stock market crash affecting Mexico severely; this led to drastic peso devaluation and rising unemployment rates.

• To combat inflation, the government negotiated an Economic Solidarity Pact with various sectors aimed at stabilizing prices but ultimately resulted in higher costs for families.

Critique of Neoliberal Policies

• Critics argued that while the pact aimed to control inflation and interest rates, it disproportionately harmed families by increasing public service costs without adequate wage adjustments for workers.

• This arrangement favored political elites over ordinary citizens; it became a recurring theme over three decades where agreements served elite interests rather than addressing widespread poverty or inequality.

Conclusion on Neoliberalism’s Impact

• Mexican economist Eufemia Martínez noted that despite adopting disinflation programs leading to stagnation and unemployment growth, neoliberal policies continued under de la Madrid’s administration.

Political and Economic Power Dynamics in Mexico

The Conflict of 1986 Elections

• In 1986, despite Miguel de la Madrid's economic objectives being met, significant electoral discontent emerged in Chihuahua as residents protested against the gubernatorial election results.

• The PRI claimed victory for their candidate Fernando Baeza, while PAN's Francisco Barrio appeared to have a clear lead, leading to accusations of monumental electoral fraud by opposition parties.

Political Fractures within the PRI

• By 1987, political fissures began to surface within the PRI as dissatisfaction grew over corruption and governance issues.

• Prominent figures like Cuauhtémoc Cárdenas criticized the party and left to form a new organization aimed at restoring nationalistic policies and addressing economic concerns for both domestic and foreign businesses.

Rise of Civic Insurgency

• A significant civic movement arose with widespread support from peasants and workers backing Cárdenas' presidential campaign, indicating a shift in public sentiment against established political structures.

The Election of Carlos Salinas de Gortari

• The PRI nominated Carlos Salinas de Gortari, a technocrat closely associated with neoliberal policies. His candidacy was seen as a continuation of existing economic strategies.

• Amidst fears of electoral defeat for Salinas, the Secretary of Governance announced "the fall of the system," which led to widespread protests following allegations of electoral fraud that ultimately allowed Salinas to assume power.

Consequences of Neoliberal Policies

• Salinas' administration marked the beginning of Mexico's first neoliberal government, resulting in deteriorating living conditions for many citizens due to income inequality and insufficient job creation.

• Despite introducing political reforms aimed at legitimizing neoliberalism amidst growing societal unrest, these measures failed to address deep-rooted democratic deficits within the political system.

Cultural Manipulation under Neoliberalism