Mexico: Insurrection and Disintegration

— Dan La Botz

THE PEOPLE'S REVOLUTIONARY Army (EPR), a new Mexican guerrilla group, appeared back in June in the town of Aguas Blancas, Guerrero where eighteen peasants had been massacred by the police a year before. In a short "Manifesto of Aguas Blancas," the EPR announced its intention to overthrow the Mexican government and bring democracy and social justice to Mexico.

Both Cuauhtemoc Cardenas, leader of the center-left opposition party, and Emilio Chauyffet, the Mexican Minister of the Interior, immediately ridiculed the new guerrilla movement as a "charade." But then two months later, on August 28, the EPR engaged in armed skirmishes in six states of Mexico--Chiapas, Oaxaca, Guanajuato, Guerrero, the State of Mexico, Tabasco-challenging the government's claim that the EPR was insignificant.

Altogether the new guerrillas killed fourteen and wounded fifteen others on August 28, claiming to have killed or wounded fifty-nine Mexican soldiers in other actions. So Mexico now has two guerrilla movements, the other being the Zapatista Army of National Liberation (EZLN), which led the Chiapas Indian uprising of January 1994 and has been in peace negotiations with the Mexican government for most of the time since.

The response of the Mexican government to the August EPR attacks was to dispatch Mexican Army units, as well as the Federal Judicial Police, state Judicial Police, and Federal Highway Police to strategic points throughout the country. The government's new military actions reach from small, poverty stricken villages in Guerrero and Oaxaca to the elegant bars of the fashionable La Condesa district in Mexico City where police units appeared on August 31 in search of EPR leaders.

Military roadblocks stopped cars on the important highway from Mexico to Puebla, and on scores of other roads and highways throughout the country. The importance of these events can hardly be overestimated.

While the Mexican government at first attempted to minimize the significance of this new guerrilla group--in order to calm foreign investors and prevent another devaluation of the peso--it has now become clear that these dramatic events together with the increasing militarization of the country represent a turning point in recent Mexican history, and form part of a long-term process of political and social decomposition. Mexico appears to have entered a new phase of guerrilla warfare, social turmoil and military repression.

The People's Revolutionary Army (Ejercito Popular Revolucionario--EPR) represents the merger of fourteen small, clandestine organizations and guerrilla groups. The EPR has also established a parallel political party, the Democratic People's Revolutionary Party (el Partido Democratico Popular Revolucionario--PDPR). While the EPR's various manifestos simply call for democracy and social justice, the real politics of the group are rather more complicated.

The most important of the EPR's fourteen founding organizations is the Party of the Poor or PROCUP-Pdlp, an organization with a long and controversial history. The Party of the Poor has roots in Mexico's own native tradition of armed peasant insurrection which goes back to Emiliano Zapata, traces its way through Ruben Jaramillo in the 1950s and `60s, and then to Genaro Vazquez and Lucio Cabanas in the 1970s.

In addition to the Mexican nationalist roots, however, the PROCUP holds the Stalinist notion of creating socialism by centralizing politics and economic power in the hands of a single revolutionary communist party, namely themselves. That view appears to be combined with the "foco" guerrilla theory that tiny guerrilla bands can spark revolution among the oppressed, as well as a theory of "prolonged" or "protracted" struggle which foresees years and perhaps decades of guerrilla warfare before toppling the government.

Thus the EPR holds a vision of state socialism imposed from above by a tiny revolutionary elite. The EPR's objective, says Mexican writer Adolfo Gilly, appears to be the creation of a society like North Korea. Gilly writes of the EPR: "A movement with this kind of goal and discourse is, from a socialist point of view, a reactionary movement, whatever may be the subjective intentions or convictions of its individual members."

The Mexican government estimates the EPR at fiftyny members, and it may even have a few hundreds, but in any case it is not a mass movement by any means. Like the EZLN, the EPR has called upon the Mexican people to rise up and overthrow the "bad government" of the PRI, and has made appeals for support to Mexican peasants, workers and intellectuals. But so far the appeals have found little response, no doubt because of the group's violent history of attacks on the left.

In February of 1985, the forerunners of the current EPR kidnapped Felix Bautista, a former communist and guerrilla, and Arnold Martinez Verdugo, a former Communist (PSUM) candidate for president of Mexico. The two were not released until June 17, 1985 when the PSUM paid 100 million pesos for their release.

On April 2, 1990, the Party of the Poor also killed two security guards in an attack on La Jornada, the country's most important leftist daily newspaper published in Mexico City. These violent attacks on other radicals made the Party of the Poor the pariah of the left, a group often accused of being infiltrated by government agents. What remains unclear is the extent to which the politics of the Party of the Poor (PROCUP-PDLP) are the politics of the EPR.

Finally, the question of the EPR has been complicated by claims that members of the ruling Institutional Revolutionary Party (PRI) has been involved in the guerrilla group. The supposition is that the hardliners or "dinosaurs" opposed to the technocrats' neoliberal policy want to topple Mexican president Ernesto Zedillo.

Several PRI members from Tabasco were arrested for illegal possession of arms and presumed involvement in the new guerrilla group, though they were subsequently released. So far none of the PRI members has been proven to have ties to the EPR.

Whatever the EPR turns out to be, however, the organization is perhaps less important in and of itself, than as a symptom of Mexico's malaise. The new guerrilla uprising is the most spectacular symbol of Mexico's continuing social decay, political deterioration and radical desperation. Perhaps more important are the many other outbursts of hunger, anger, and demands for justice and dignity:

* Back in May hundreds of men, women and children, ordinary people from the town of San Nicolas de los Garza in the northern state of Monterrey, stopped, stormed and sacked a train carrying corn and beans. "At least we'll have tortillas," said one of those who carried off the corn in bags and buckets.

* Two months later in San Quintin a group of nearly 1,000 mostly Mixtec Indian farm laborers who hadn't been paid in two weeks went on a rampage and destroyed police cars, busses, local business and part of a packing plant.

* In early August about one hundred peasants armed with rifles and shotguns freed four prisoners, including a local peasant leader, from the jail in Simojovel, Chiapas on Mexico's southern border.

These are the kinds of events associated with profound breakdown of society, harbingers of social upheaval, real social change, or drastic repression.

While Mexico boils at the bottom, it is also cracking up at the top. Andres Oppenheimer in his recent book Mexico: on the Border of Chaos describes the pervasive corruption of the Mexican state. Mexico is plagued by hundreds of kidnappings, bank robberies, and murders each year, many of them perpetrated by the very police supposedly entrusted to prevent such serious crimes.

But when the police actually work at the job of being policemen they are perhaps worse, shaking down the citizenry, extorting money from small businessmen, engaging in kidnapping, torture, and extrajudicial execution--that is, murder--as many reports by Amnesty International and Americas Watch have pointed out.

Mexico's police forces and more recently sections of the Mexican Army have become deeply involved in the drug business, several times having lead to shoot outs between rival police and army units. In mid-August Antonio Lozano Garcia, the Attorney General, decided that something had to be done to stop the growing criminalization of the police and fired 737 officers of the Federal Judicial Police because of their involvement in a wide array of minor and serious offenses.

Given the difference in the size of the countries, this would be something like announcing the firing of 2,000 FBI officers, that is to say, a spectacular revelation of the profound corruption of the highest police force in the land. Eleven days later armed men attempted to kill or kidnap Lozano Garcia's wife, and the guess is that this was the revenge of disgruntled police officers and/or drug dealers.

Murder haunts Mexico. The government has still not solved the murders of Cardinal Juan Jesus Posadas Ocampo in May of 1993, presidential candidate Luis Donaldo Colosio in March of 1994, and Jose Francisco Ruis Massieu, general secretary of the Institutional Revolutionary Party in September of 1994. While those crimes remain unsolved to
the satisfaction of the Mexican people the government continues to lack legitimacy and authority.

As Mexican writers Adolfo Gilly and Jorge G. Castaneda both have suggested, the assassinations result from the struggles for money and power within the Mexico's power elite, an elite which includes the Institutional Revolutionary Party (PRI), the nation's great capitalists, the drug deals, and the church. But this is hardly a secret confined to the Mexican intellectual elite. The whole seamy and sordid business has become the subject of a Mexican telenovela or soap opera on Television Azteca called "Nada Personal" or "Nothing Personal," which portrays Mexico's political elite as a cynical and malicious caste.

These struggles among the ruling elite express the profound changes taking place within Mexican society, changes driven by the internationalization of capital, the entrance of Mexico into the North American Free Trade Agreement (NAFTA), the transition to the new processes of "lean production" which mean both higher productivity, but also higher unemployment.

In Mexico these changes have affected the traditional role of the ruling party, now pushed and pulled not only by the bureaucracy of the one-party state and its phoney labor unions and peasant leagues, but also increasingly by capital and powerful drug dealers.

The technocratic leadership of the PRI has moved far from the party's traditional politics and organization, and Zedillo and other party and government leaders often seem out of touch not only with their own party, but also with the reality of Mexican life. Zedillo seems a distant leader whose presidential discourse finds little resonance in the society. The PRI appears to be losing its historic ability to co-opt its opponents and placate the opposition. Consequently there is a growing gap between the PRI leadership and the party ranks, and between the government and the people.

But political power, like nature, abhors a vacuum. The Mexican Army begins to fill the gap between party and people as it carries out a gradual militarization of Mexico. Generals and Colonels have begun to take charge of many of Mexico's states and cities, and tens of thous<->ands of Mexican soldiers now occupy several states. Military checkpoints block highways across the country, and truckloads of soldiers rumble into small towns and rural villages, almost inevitably leading to torture, rape, and murder.

Some leaders of the Mexican military have begun to call for the invocation of Constitutional Article 29, which suspends civil liberties. Mexico in the 1990s begins to resemble countries in Latin America in the 1960s and `70s as the military pulled on their boots, picked up their guns, and brought "peace and order" to Argentina, Brazil, Chile and Paraguay.

The driving force behind these changes is to be found in phrases that have become contemporary by-words: the multinational corporation, the globalization of capital, and neo-liberalism. These radical changes at the very center of economic life, ramify throughout society, bringing about shifts in the balance between social classes, leading to new alliances, producing new political forces, and finally perhaps, even new political regimes.

At the moment these changes appear to lead either towards democracy and demands for social justice or toward militarization and totalitarianism. If we want to understand these developments we have to look at the relations between capital and labor both in Mexico and internationally.

A Social Crisis Driven by Capital

President Ernesto Zedillo continues with the economic policy inherited from his predecessors Carlos Salinas de Gortari and Miguel de la Madrid, because Mexico sometime ago passed the point of return to economic nationalism. For almost fifteen years now Mexico has pursued a policy which has come to be called neo-liberalism, supposedly meaning a return to the classical liberal economic policies of the late nineteenth and early twentieth centuries when there was less state-owned industry, little government regulation, and few social welfare programs.

The neoliberal policy found fullest expression in the North American Free Trade Agreement (NAFTA), which created a free market between the United States, Mexico and Canada. In Mexico these neoliberal policies have meant privatization of state-owned corporations, opening the country to foreign investment, free trade based upon ending protectionist policies such as tariffs and import quotas, and reduction of the government's social welfare programs.

Zedillo will hew to the neoliberal policy--despite the December 1994 devaluation of the peso by 50%, the Mexican stock market crash, and the worst economic depression since the 1920s and `30s--because, he argues, the program has been successful. The question of course is: successful for whom?

Zedillo points to the fact that in the second trimester of 1996 Mexico's gross national product grew by 7.2%, while the manufacturing sector grew by 8.9%. Leading Mexico's economic growth were metal, machines and equipment, which grew at 18.2%, basic metal industries at 17.3%, textiles, clothing and leather goods at 16.9%. Automobile production between January and May of 1996 was up by 43.3%; autos are a big export product.

What this means is that the technocrats, as the Mexican advocates of neoliberalism are known, have been rather successful in making a turn to manufacture for export. The most successful part of this manufacture for export program is still to be found in the maquiladoras, the assembly and packing plants mostly located along the U.S.-Mexico border.

During the first three months of 1996, one and a half new maquiladoras opened every day. In the month of March 1996 alone eleven new factories appeared in Tijuana, six in Reynosa, four in Matamoros, two in Ciudad Juarez, and so on. By June 1996 there were 3,138 maquiladoras employing 833,103 employees. These workers, of course, because of the December 1994 devaluation, continue to earn between three and four U.S. dollars per day, on the average.

Mostly owned by foreign multinationals, the maquiladoras, except for the employment they provide, do little for the Mexican economy. Of the $30 billion in raw materials and parts consumed by the maquiladora industry, only l.6% comes from Mexico, interestingly down from 2% before NAFTA. The United States provides 50% of those materials and parts. Maquiladora exports grew by 17% in the first quarter of the year, representing $42 billion foreign trade income.

The center of Mexico's neoliberal program has been privatization of state-owned industries. In 1983 Mexico had about 1,115 state owned industries, today it has about 200. The centerpiece of the first phase of the great Mexican auction was the sale of TELMEX, the state-owned telephone company purchased by a consortium of Mexican, European and U.S. companies, including Southwest Bell Telephone.

The beneficiaries of this process have been U.S.-based and other foreign multinational corporations and Mexican business groups. Over the last fifteen years, Mexican corporations have undergone a rapid process of concentration, merging to form oligopolies or monopolies. For example, Televisa, the powerful Mexican television firm which controls about 90% of the Mexican market earns $l.2 billion per year. Telefonos de Mexico (Telmex), another big monopoly, produces some $5.9 billion per year.

The tendency is for big corporations to fuse into ever larger ones. For example, the two now private airlines, Aeromexico and Mexicana, recently merged, putting both companies under the control of Ernesto Martens. In Mexico today some 300 firms produce 70% of the exports, according to the National Association of Exporters and Importers of Mexico.

Mexico's big corporations are doing well. The value of the 178 most important firms trade on the Mexican stock market rose by 60% over the last year, partially recuperating from the crash of December 1994. This year fifteen Mexican multimillionaires made the Forbes magazine list of the 447 richest individuals in the world. Led by Carlos Slim, who heads TELMEX, Grupo Carso and Inbursa, these fifteen Mexicans are worth $25.6 billion, which represents 9.2% of Mexico's gross national product, 28% of the balance of its public foreign debt, and 162% of its international reserves.

Since everything is going so well for business, Zedillo and the ruling Institutional Revolutionary Party will continue the process of selling off the state owned industries. Early this year, the government privatized the finances of the pension funds of the Mexican Institute of Social Security (IMSS), following the model of Chile.

Now attention is turned toward the privatization of the 26,477 kilometers of the national railroads. This will take the form of fifty-year concessions permitting 49% foreign ownership. The U.S. railroads will most likely play the most important foreign role in the new privatized Mexican rail systems.

Mexico has about 55,000 active railroad workers, who with privatization will apparently be fired and 18,000 rehired by the new private owners. Mexico also plans to privatize its sea ports and airports; the big hotels are demanding that it also privatize its beaches, which under present law must be open to the public.

The big issue, of course, is the privatization of the petroleum industry. The PRI government has over the years privatized parts of the petroleum industry, for example, by modifying the list of strategic petro-chemicals controlled by the Mexican state petroleum company PEMEX. The government gradually declared more chemicals to be non-strategic, permitting them to be handled by the private sector and foreign corporations.

The government has announced its intention of selling off the petrochemical industry, a process now underway, despite a resolution passed at the PRI's Seventeenth National Assembly opposing the privatization of the petrochemical industry. U.S. corporations would like Mexico to sell off the entire oil industry--exploration, drilling, fields, storage facilities, refineries and all. Yet such a move remains enormously controversial, so the process will probably continue to be gradual.

Pleased with the Mexican government's adherence to the guidelines of the International Monetary Fund (IMF) and the World Bank, Wall Street investment firms such as Santander, Barings and Bear Stern this year gave Mexico high ratings, and encouraged their clients to invest here. Foreign investors returned to Mexico in 1996 in force, both buying stocks and investing directly in the construction of plants, services and offices in Mexico.

Foreign direct investment in Mexico in 1996 also grew by 58.9%, with 60.1% going into investment in industrial plants. Of that $1.3 billion in foreign investment, 53% came from the United States, 13.7% from Canada, and 13% from Germany. The United States is by far the dominant foreign economic power in Mexico.

Michel Camdessus, the director of the IMF, recently stated that Mexico "is doing well, surprisingly well," and indicated that Mexico should stay on the same political course. Camdessus was particularly pleased with Mexico's repayment of $4.7 billion on its public foreign debt, part of the $50 billion "rescue package" arranged by U.S President Bill Clinton.

The foreign debt nevertheless remains an enormous burden. Mexico has had serious difficulties with its foreign debt since the 1970s, a debt mostly owed to U.S. bankers. Mexico's foreign debt (public and private) rose from $30.9 billion in 1977, to $74.8 billion in 1981, and finally to about $100 billion in August 1982 when because of a fall in oil prices, Mexico announced it was insolvent and could not make its interest payments on the debt.

The 1982 Mexican debt crisis caused a chain-reaction, a world-wide crisis in foreign debt, especially affecting third world countries. In 1982 the Mexican foreign debt of $75 billion represented 45% of the gross national product (GNP), but by 1987 the foreign debt of $108 billion represented 76% of the GNP.

Predictably then, again in January of 1995, Mexico was insolvent, sparking another international financial crisis, known as the "tequila effect," particularly affecting Latin American countries.

The International Monetary Fund, policeman of international banking institutions, has gradually taken control of Mexico's economy. Between 1976 and 1995 Mexico signed seven agreements with the IMF, pledging to reduce its Federal budget, while adopting structural changes in its economy such as privatization, and permitting an increased role for foreign investors.

The IMF program was consistent with Mexico's entrance into the General Agreement on Trade and Tariffs (GATT) and the signing of NAFTA. Mexico's technocratic presidents de la Madrid, Salinas and Zedillo adopted the IMF multinational corporations' vision of Mexico as a platform for foreign investment within the context of a North American common market dominated by the United States.

Today Mexico's public debt amounts to $98 billion, while the public and private debt together total approximately $165 billion. The public debt is principally with the Treasury Department of the U.S. government, and as collateral Mexico deposits all of its income from petroleum in an account with the Federal Reserve Bank of New York.

In the next six-and-a-half years Mexico will have to pay $97.4 billion to those institutions. The IMF, the U.S. Treasury Department, and the New York banks are the institutions primarily responsible for Mexico's current economic policies of austerity.

Austerity means cutting the budgets for health and education in order to pay the bankers. But in addition it means keeping workers' wages low, while preventing any growth in benefits. So while Mexico's manufacturing industry and exports boom, for most of the people of Mexico, things have gone bust.

[Part 2 will appear in our next issue.]

ATC 65, November-December 1996

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