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Mexico: Light at the End of A Long, Dark Tunnel?

BY Jim Cosgrove

September 1, 1996 Issue | Posted 9/1/96 at 2:00 PM

 

FROM 1988-1994, the brother and friends of former President Carlos Salinas amassed some of the largest fortunes in the world, in a country where most of the population lives in poverty.

This was done through the selling of public property to private buyers (“privatization”), a tactic that mirrored the confiscation and sale of Church property in the middle of last century. In those years, the radically anti-Catholic Liberal Party appropriated all the Church possessions and auctioned them off.

At the time there was a wide and efficiently organized Church network of educational, religious and welfare institutions. These properties were considered “dead beat” goods, because they were out of commercial circulation. The Liberals insisted on confiscating and auctioning them. The same fate befell Indian communal property, their agricultural and livestock communal lands. Most of that real-estate fell into the hands of speculators and adventurers.

The Liberal Party, which had come into power thanks to arms and money from the international Masonic lodges, was isolated and weak. It was thud forced to build a make-shift social base, opening its doors to opportunities drawn by the chance to get rich quick. Joining a lodge was all that was needed in order to be able to purchase choice properties at ridiculously low prices. Monetary concessions and enviable public appointments were added enticements. Under the shelter of political power, a new kind of “businessman” emerged in Mexico, ancestors of families that are today among the richest in the world.

The peasant revolution at the beginning of this century, which overthrew General Porfirio Diaz after more than 30 years in power, changed little more than the names of the beneficiaries. The best properties of the old “Porfirian” haciendas confiscated by the new liberal regime fell not into the hands of the peasants that had joined in the armed struggle, but into those of the chief generals and their “compadres.”

In 1940, the so-called “golden” post- Mexican Revolution era began with an economic boom. But the big public projects, such as freeways, irrigation systems and energy distribution, benefited mostly the former revolutionaries and their heirs, who “won” contracts with gigantic state monopolies such as Petroleos Mexicanos (PEMEX) the Federal Electricity Commission.

When the national bankruptcies of 1982 and 1987 seemed to announce the end of the old system, a surprising change took place: the old “nationalist revolutionary” demagogy changed to the cold and technocratic Ivy League-educated politicos that came to power with Salinas in 1988. The old doctrines of absolute market freedom were resurrected and an aggressive “privatization” program of the state companies and monopolies was launched. Everything was put on sale. This was necessary, of course, because the state had monopolized entire sectors of the national economy, including the banking system. The problem, once again, was that the public auction of these goods was carried out in a fraudulent manner aimed at benefiting the president and his cohorts.

During the so-called golden years (1988- 1994), Mexico became one of the leading countries in the world in number of super-millionaires, according to Forbes magazine. It also remained one of the poorest countries in the world.

Since the disastrous bankruptcy of December 1994, at least one part of the system— political impunity—has changed, and greater civic participation has hobbled the old State-party system. For the first time in 70 years, the opposition parties are gaining significant political positions in the country. Under the present system it is impossible to terminate or significantly reduce public corruption, but the final defeat and profound transformation of this system is now a realistic possibility.

President Ernesto Zedillo has insisted that he will seriously reform the Mexican political system. Restoring to the Church the goods confiscated by the State at the beginning of this process of public corruption would be a welcome sign that he means what he says.

Ricardo Olvera is based in Tijuana, Mexico.