Letters from Mexico is a Dream Machine Site The Dream Machine --- The Imagination of the World Wide Web

Privatization And The National Pride

On Monday, March 18, 1996, the middle class marched to save their last national treasure: Petroleos Mexicanos (Pemex). They may indeed have put the impending sale of their nationalized petroleum industry on the back burner. Whether they will be able to keep it there is yet to be determined. Outside our apartment, the march went on for two hours. Variously estimated at from 50 to 100 thousand people, they were disciplined, relatively well dressed, and in high spirits. They came from throughout the State of Oaxaca, carrying the banners of their unions, associations, and municipalities. In Mexico City, and other cities throughout the country, their brothers and sisters did likewise. The amount of organization necessary to call for, bring in, launch and evacuate such crowds boggles the mind.

Led by the left-of-center opposition Party of the Democratic Revolution (PRD), State teachers' unions, and the National Small Farmers' Movement (Barzonista), and timed to coincide with the 58th anniversary of Pemex's nationalization, this outpouring of public sentiment wasn't lost on the ruling Party of the Institutional Revolution (PRI).

Mexican President Ernesto Zedillo Ponce de Leon, not known for his snappy patter, announced that "Pemex is safe in my hands" (but avoided any references to the proposed sale of natural gas subsidiaries to "private investors", some of whom are believed to be foreigners). In contrast, the clashes between PRI senators in the chamber of deputies have begun to reveal a deep and serious rift in his own party, over privatization - and the whole enchilada of neoliberal economic measures that have come to represent the Salinas and Zedillo administrations.

For most Mexicans, Zedillo is the personal embodiment of neoliberalism. Loosely defined, neoliberalism promotes "globalization" of the Mexican economy as a way to bring Mexico into the "first world". In this view, vast natural resources and a cheap labor force attract large infusions of foreign capital, resulting in high employment, advanced technical facility, and the money to buy desirable consumer goods on the world market. In this scenario, the most essential missing ingredient is foreign investment. Unfortunately for the neoliberal s, that investment comes with a high price tag: turning over the control of the nation's economy to the investors, in the form of corporate stock, outright purchase of domestic industries, bank shares, and privatization of public enterprises.

In fact, there is a strong case to be made for opening up the petroleum industry to foreign investment. Neglected for more than ten years, and now requiring an estimated 20 billion dollars in plant upgrades and environmental cleanup, Pemex doesn't have the money to get the job done -- and neither does the Mexican government. If the Mexican petroleum industry is to move ahead, it must get large infusions of foreign capital.

Inefficiency and corruption are also issues. Forty thousand jobs are said to be "redundant" in Tabasco alone, and the workers and their unions are fierce in their opposition. On the management side, Pemex -- responsible for a significant percentage of the gross domestic product, and for much of the hard currency income -- offers unparalleled opportunities for favoritism, bribery, nepotism and skimming.

The biggest stumbling block to "globalization" is Nationalism, a sentiment that has been used by the haves to placate the have-nots since before recorded history. Mexicans are fiercely nationalistic. Though they have not, except for a handful of workers, benefited from the "modern miracle" of Pemex, they have taken pride from it. Since its' nationalization by Lazaro Cardenas in 1938, along with the railroads, the telephone company, and other basic industries, they have regarded it as "ours". The revelations that the railways, the ports, and now Pemex have been mismanaged and allowed to fall into terminal disrepair have been disturbing. Even more disturbing was the sale of the railways and the ports to foreign investors. Putting Pemex on the block is a lot like having the farm foreclosed on: what's left?

Well, what's left turned out to be the nation's pension plans, comprising 20% of the total investment capital of Mexico. At present, they are publicly administered. Plans are now afoot to turn administration over to the bankers and brokers, in an attempt to shore up the bankrupt Mexican banking system. Private since 1988, the banks are arguably the worst-run and most corrupt of the economic sectors. The implications of such a plan have sent great tremors through the population, as they contemplate the evaporation of their pensions.

While the Chamber of Deputies agonizes over whether NAFTA requires allowing foreign branch banks in Mexico to compete for the pension plan business, Pemex is still at the forefront of current concern. Pemex has become the paradigm for neoliberalism, and it is here that the rubber of globalization meets the nails in the road of nationalism.

The Dream Machine --- Network Services

...the best independent ISP in the Twin Cities

A travel agent near you.