Mexico's neoliberal transition

...One of the pollsters said, "It was the yuppie revolution...

...DISSENT / Fall 2000 n 31...

...Munoz Ledo, who has angled his entire political life to get into Los Pinos, first tried to start his own organization, then wangled a presidential nomination from a fringe party...

...The Clinton administration applauded Fox's victory as "a triumph for democracy," as if all along it had been part of the school that believed there could be no democracy in Mexico until the PRI was ousted...

...Given the primacy of commercialism in U.S...

...DOUGLAS W. PAYNE is a New York-based writer...

...or European norms, with many surviving on as little as $200 per month, and numerous family members DISSENT / Fall 2000 n 29 POLITICS ABROAD pitching in to afford a small home and a secondhand car...

...Part of the strategy in Mexico was to wrap Labastida, a former POLITICS ABROAD interior minister (as in internal control), in the banner of the third way, portray him as an advocate of "an economy with a human face...

...A great deal disappeared into PRI pockets and offshore accounts such as those in Switzerland and the Caribbean in which Salinas's brother Rad' stashed an estimated hundred million dollars...

...foreign policy since the end of the cold war, the White House surely would have endorsed a continuation of the PRI's seven-decade tenure if Labastida had won...

...Interest rates soared, and the middle class, having borrowed heavily on Salinas's promise to make Mexico a first-world country, nearly drowned in debt...

...Fox was advised for a time by Dick Morris, another consultant who gained notoriety in the Clinton stable...

...About the only thing the PRI factions seemed to agree on was that shredding begin immediately...

...But laboring in that unforgiving post for two years didn't help Cardenas's presidential chances, and the PRI made it all the more difficult as its minions stripped city coffers and offices of everything including the wall sockets before Cardenas arrived...

...The money did flow into Mexico with NAFTA, which is more an investor and propertyrights protection pact than a trade agreement...

...For Salinas the remedy was twofold: refinance PRI domination with foreign investment and attack the left, destroying it if possible, but at minimum making it clear that Cardenas's Party of the Democratic Revolution (PRD) would never be allowed to reach Los Pinos, the Mexican White House...

...As James Nash, senior economist for Latin America at the New York Federal Reserve, explained at a conference in Washington, it mattered little which of the two top contenders won, right-wing businessman Fox or Francisco Labastida of the reigning Institutional Revolutionary Party (PRI), because both pledged to continue the neoliberal, free-trade policies embraced by PRI governments since the 1980s...

...For Carville, who advised the failed Feminist candidate in the 1999 elections in Argentina, the Mexican election made it two straight losses advising Latin American political parties with histories of thuggery and graft...

...huffing in the Wall Street Journal, "This sounds like code language for antigrowth tax-rate increases...

...But it aims for the same upward mobility as its counterparts everywhere and was drawn to Fox's promise of accountable government and high growth rates...

...ALTHOUGH THE government onslaught against the PRD took its toll, the party had rebounded in the 1997 mid-term elections, when Cardenas won the race for mayor of Mexico City, the nation's chaotic, crime-ridden, and virtually ungovernable capital...

...Under increasing international scrutiny, the party relied less on fraud and resorted to massive state spending in a decidedly unfair exercise...

...In 1994, the PRI dug deep into the Mexican treasury to elect Salinas's successor, Ernesto Zedillo, another Ivy-educated economist...

...Many Mexican analysts believed a fracture was inevitable, with possibly some of the technocrats realigning behind Fox, whose party failed to gain a majority in Congress, and the dinosaurs aiming to make his life miserable...

...Overnight, the money in Mexican pockets lost 40 percent of its value...

...The party did retain the mayoralty of Mexico City, though barely, but morale remained low and direction unsure...

...Labastida received 37 percent, doing best among the old, the uneducated, and rural dwellers, traditional PRI constituencies...

...Still, Fox ended up running as a third wayer, too, even employing the same "economy with a human face" slogan...

...Others expressed abhorrence at the PAN's ideology, rooted in the Catholic conservatism of its founders, many of whom took up arms against the anticlericalism of the Mexican Revolution in the Cristero War of the 1920s...

...No surprise, then, that telecommunications tycoon Carlos Slim, a long-time PRI supporter who became the richest man in Latin America (according to Forbes) as a beneficiary of the party's privatization program, stated after the election that Fox "has the best intentions of moving Mexico forward...

...Which is why younger, better educated, and urban voters became Fox's biggest backers and, in the end, put him over the top...

...A majority of left luminaries stayed with Cardenas, believing that Fox could turn out worse than the PRI...

...Mexican historian Adolfo Gilly predicted that Fox would rule in the mold of Ronald Reagan, Margaret Thatcher, and Carlos Menem, the flamboyant former rightwing leader of Argentina...

...But Fox let Morris go in favor of homegrown strategists, some of whom went back with Fox to the 1970s when he ran CocaCola's Mexican and Central American operations...

...Today, in the handful of states where the PAN has won elections, the party has tried to dictate skirt lengths in public offices, and one PAN state pressured a teen to give birth after being raped...

...A number of other leftist figures also went over to Fox...

...Gore, meanwhile, maintained close ties with the Labastida camp through the consultant-pollster team of James Carville and Stanley Greenberg, who were working for both campaigns...

...But few concerns were voiced in 1994 either, and Mexicans, rightly ever skeptical, will tell you that when it comes to crises in their country, nothing ever happens—until it happens...

...In the run-up to the 2000 vote, it seemed to bog down amid worsening internal disputes, one of which led to the exit of Porfirio Munoz Ledo, a former PRI heavyweight who, with 30 n DISSENT / Fall 2000 Cardenas, had co-founded the PRD...

...Dutch brokerage giant ANB AMRO, echoing firms from one financial center to the next, encouraged clients to "buy on the news" and raised Mexico to an overweight from an underweight position in its model Latin American stock portfolio...

...Much of the proceeds went to replenish the PRI patronage engines...

...A U.S...

...Amnesty International's most recent annual report states, "Arbitrary detentions, torture, killings and death threats continued to be reported...

...In the aftermath, the PRI old guard, the "dinosaurs," railed against the "technocrats" headed by Zedillo, who, pursuing a legacy as a democrat, had kept his word by guaranteeing that the electoral authorities for the first time were completely independent...

...Cardenas, with 17 percent, did poorly not only among the middle class and youth, but failed to connect with the large numbers of disaffected who probably longed for change but may have feared Fox's social conservatism and just stayed home...

...Two of the more prominent signers were Jorge Castaneda and Adolfo Aguilar Zinzer, both former Cardenas advisers who became part of Fox's inner circle...

...Fox aides said that prior to the vote, both had snubbed overtures from his campaign and that the tempestuous Fox was livid...

...The result was that, as in most of Mexico, as in Britain under Blair for that matter, the gap between rich and poor widened...

...presidential candidates Gore and Bush, as interchangeable as Fox and Labastida when it comes to markets and trade, were caught flat-footed by the PRI's defeat...

...Wendy's International announced plans to expand its roster of eight fast-food franchises to more than a hundred outlets, joining a phalanx of foreign concerns poised to ramp up their stake in Mexico...

...The 1988 election showed how far the PRI had descended into political and economic bankruptcy...

...The victims included peasants, indigenous people, human rights defenders and political activists...

...Fox, who was not due to take office until December 1, continued to promise everything to everyone...

...Meanwhile, the PRI unleashed the entire repressive apparatus of the state against the PRD and its left-progressive allies among workers, peasants, and students, an assault that has abated somewhat only in recent years...

...Mexico's middle class is poor by U.S...

...Castafieda told the Spanish daily El Pais, "This election is not about principles . . . . It is a referendum on change or no change...

...THE MARKETS were pleased when Vicente Fox won Mexico's presidential election in July: not because he had done what many still thought impossible—defeat the authoritarian machinery of the longest ruling party in the world—but because there had been no unrest, nothing to shake investor confidence...

...The only concern was that the vote could be close and spark allegations of fraud, protests in the streets, the kind of thing that makes capital skittish...

...He even visited Fidel Castro in Havana, a gesture that might have been more significant if the Cuban POLITICS ABROAD leader's calendar wasn't already brimming with Republican congressional representatives and Fortune 500 executives...

...So, when Fox won by a relatively comfortable margin and the PRI conceded, stocks rallied in Mexico City and New York, and the Mexican peso rose against the dollar...

...Stung by such attacks, Fox undertook an image adjustment, aided by his new advisers from the left...

...Joel Ortega, a former communist who organized a declaration of support for Fox signed by more than two dozen leftist intellectuals, said, "The most important task is to free ourselves from PRI domination...

...The rationale was later apparent during a Pentagon workshop on Latin America, which warned that "a 'democratic opening' in Mexico could test the special relationship by bringing into office a government more interested in challenging the United States on economic and nationalistic grounds...

...There was also much finger-pointing and consternation within the PRD...

...Still, voter turnout overall was just 64 percent, meaning that Fox, with 43 percent of the vote, actually had the support of only about one in four registered voters...

...Ordinary citizens, meanwhile, hoped the election would somehow lead to a Mexico more livable and respectful of human rights...

...The true count will never be known because the PAN voted with the PRI to incinerate the ballots...

...Gilly warned that if the left supported Fox, the PRI would benefit from the inevitable discontent over Fox's economic policies, "just as the corrupt bosses of the dismantled Communist Party of Russia did when the people began to resist Boris Yeltsin's neoliberal outrages...

...Since birth, the PRD has been a fractious amalgam of competing currents and personalities...

...During the last decade, hundreds of PRD members have been killed by Mexican security forces with impunity, at least six hundred according to the party's own count...

...With returns showing opposition leader Cuauhtemoc Cardenas, once a rising star in the PRI, substantially ahead, the PRI-controlled electoral body announced that the computers had crashed due to "atmospheric conditions...

...In other words, no democratic transition would be permitted in Mexico unless there were a reliable alternative to the PRI...

...He stopped displaying a banner of the Virgin of Guadalupe at his rallies, eased his position on homosexuality—which he had been referring to as a "degenerate act against human nature"—and adopted third-way language on education and health care...

...When both schemes proved to be non-starters, he showed up at Fox's door and was taken in as adviser...

...That was part of the reason why Zedillo inherited a greatly overvalued peso, which collapsed just weeks after he was sworn in...

...What is clear is that a majority of Mexican voters, whether they preferred Fox or Cardenas, got at least part of what they voted for: an end to the state-party system...

...THE DEGREE to which the split among the left may have influenced the outcome awaits deeper study...

...The Reagan administration recognized Salinas's victory before Cardenas could even initiate a legal challenge...

...It may be that Gore and Bush put too much stock in Greenberg's work in Mexico: several of his polls showed Labastida ahead while none ever showed Fox in front...

...Its members also include PRI-hating professionals, cyber-types, and assorted cosmopolitans, one of whom gushed to Reuters after Fox's victory, "I wanted to tap dance and sing 'CA Obla-da.'" Although the middle class accounts for less than a third of the country's population, it apparently registered and turned out to vote in bigger percentages than other social groups...

...team hired by Mexican businesspeople to conduct exit polls found that Fox's greatest support came from people under forty-nine, people with at least a high school education, and people who resided in urban and suburban areas...

...FOX'S WIN was bitter irony for the Mexican left, which inflicted the first body blow against the PRI when it almost certainly won the 1988 elections...

...U.S...

...Cardenas went back and forth on whether to accept Fox's invitation to the PRD to cooperate with his government, and observers wondered whether the party might eventually turn to a younger standard-bearer...

...Many wondered, too, whether the ouster of the PRI finally would mean an end to the sixyear cycle of economic disasters known as "the sexenio curse...

...In 2000 there seemed to be a consensus in the international financial community that the Mexican economy was sound...

...Carville himself kept an uncharacteristically low profile, probably because the PRI played the nationalist card by trying to tar Fox, a descendant of Spanish and Irish immigrants, as beholden to unnamed foreign influences...

...Other financial analysts were not as exercised, noting that when Fox was the governor of the state of Guanajuato, the economy there grew steadily in a capitalfriendly environment of low wages and socialspending cuts...

...human rights activists from Chiapas—Carville and Greenberg were welcomed into the ruling party's brain trust...

...So, although Article 33 of the Mexican Constitution provides for the expulsion of foreigners who interfere in Mexican politics—the PRI has used this for years to eject U.S...

...When the count resumed, the PRI's Carlos Salinas was declared the victor...

...Fox's National Action Party (PAN) had supported the North American Free Trade Agreement (NAFTA) from the beginning, voting for the constitutional amendments the PRI needed 28 n DISSENT / Fall 2000 to implement the agreement even as it continued to denounce the PRI's imperious rule...

...Wall Street didn't mind his vow to establish an anticorruption commission, but was concerned by his commitment "to reduce the gap in income distribution," with David Malpass, chief international economist at Bear, Stearns & Co...

...They said Bush had refused to meet with Fox's daughter Ana Cristina, who will act as first lady for the divorced Fox, but had sat down with L,bastida's wife in Los Angeles...

...In the last quarter-century, nearly every presidential transition has been accompanied by an economic disaster, such as the currency crashing in 1994...

...Mexican big business was no less sanguine...