1991, Mexico in
Mexico thrived in 1991. Government efforts to stimulate the economy by encouraging
private enterprise continued to pay off as the economy performed well for still another
year. Less successful, however, were efforts to rid the nation's electoral system of its
reputation for fraudulent practices. Serious negotiations for a free trade agreement began
in June.
Politics. The August 18th elections for the National Chamber of
Deputies, half the Senate seats, and six governorships served as a test of the
government's willingness to democratize the political system. In addition, fraud-free
election were important to improve the nation's reputation in the United States, with
which it was negotiating a free trade agreement. In 1988, President Carlos Salinas de
Gortari of the Institutional Revolutionary Party (PRI) barely squeaked to a victory amidst
widespread charges of voter fraud. Since then, Salinas promised a fraud-proof electoral
system. New laws created a relatively independent Federal Electoral Institute, tough vote
fraud penalties, and a hard-to-counterfeit voter credential. Fear that PRI was losing
control prompted the passage of a provision giving an automatic majority in the Chamber to
any political party which received 35% of the national vote; PRI was the only party likely
to obtain such a percentage.
In spite of these new measures, opposition groups began fearing that
the government would use any means necessary to insure a PRI victory. Few people doubted
that PRI would win a majority of the votes, for a July public opinion poll showed that
over 60% of the electorate supported PRI. The opposition parties feared that the
government and PRI would commit fraud in those elections which the opposition parties
thought they could win. The Federal Electoral Institute was so slow in issuing the new
voter credentials that perhaps as many as nine million never received them. Opposition
parties complained. Some demanded the postponement of the elections. Some demanded that
foreign observers be invited to monitor the elections to prevent fraud, a demand the
government rejected on the grounds of national sovereignty. Government welfare
expenditures rose significantly before the election, particularly in places where PRI
faced electoral difficulties.
As expected, PRI steamrolled the opposition with about sixty-one
percent of the national vote. The National Action Party (PAN) was second with over
eighteen percent. The Democratic Revolutionary Party, whose candidate almost beat Salinas
in 1988, saw its vote percentage drop from about thirty percent to below ten as a result
of its internal disarray. PRI won 320 of the 500 deputy seats, including all forty in the
Federal District, where opposition parties had been strong. It also won back a Senate seat
there and claimed victory in all the gubernatorial races. PAN won one hundred deputy seats
and a Senate seat in North Baja California state. The other parties fared poorly,.
Two gubernatorial races provoked so much controversy that the PRI
candidates had to abandon the posts they had just won. PAN claimed that its candidate,
Vicente Fox, former president of Coca-Cola of Mexico, won the Guanajuato governorship but
that it was stolen by PRI. In the face of PAN-led demonstrations, the newly-elected
PRI governor took the oath of office and then resigned, forcing a new election. To insure
that Fox could not run, the Guanajuato state legislature enacted a law requiring
gubernatorial candidates to be natives of the state, which Fox is not. In nearby San Luis
PotosÃ, the new PRI governor also resigned amidst opposition charges that opposition
candidate Salvador Nava had actually been elected.
Most observers agree that these elections demonstrate Salinas'
determination to achieve economic reform before tackling political reform. To do so, he
must have the support of the PRI machinery and a free hand in the Chamber of Deputies.
During the 1988-91 term, he had to bargain with PAN to pass some laws. The new PRI
majority, added to the votes of some small, tame opposition parties, not only guaranteed
passage of ordinary laws but also enactment of new constitutional amendments. Speculation
quickly arose that Salinas wanted a constitutional amendment allowing him to run for
another six-year term in 1994. More important, however, is the fact that the new majority
allows Salinas to pass whatever laws necessary to implement the forthcoming free trade
agreement with the United States and Canada.
Mexico remains politically stable, but its political system shows
serious signs of trouble. In March, Salinas had to fire his attorney general and launch a
probe and reorganization of the federal judicial police because of alleged human rights
violations. In April, eavesdropping devices were discovered in the offices of the
government's National Commission on Human Rights. International human rights organizations
issued reports severely criticizing Mexico's human rights record.
Economics. The Mexican economy performed well even though it is closely
tied to that of the United States, which was in recession. The gross domestic product grew
almost five percent between January and June. Exports, led by non-petroleum products, rose
almost sixteen percent compared to the previous year. The stock market boomed with the
index rising ninety percent in the first eight months of the year. The labor-business
solidarity pact help drop inflation to its lowest level in thirteen years, estimated to be
about 15%. The foreign debt declined. Foreign investors, principally from the United State
and Japan, significantly increased their participation in the economy. Automobile and
truck manufacturing rose from 550,000 units in 1990 to 650,000 in 1991. The rising
domestic economy and the concomitant demand for oil led PEMEX, the government oil
monopoly, to adopt a three billion dollar exploration budget.
Encouraged by the success of his earlier reforms, Salinas continued
to liberalize the economy. The government sold controlling interest in its largest bank,
BANAMEX, to a group of Mexican private investors for over three billion dollars. Mexican
financier Carlos Slim gained control of the former government-owned telephone company
through a 1.7 billion dollar investment. Another twenty percent of the company's stock was
sold abroad. In June, Salinas ordered the union-controlled Veracruz Port Service, long
noted for corruption and inefficiency, dismantled and replaced by a private sector firms.
This reorganization quickly and dramatically increased cargo handling at the nation's
largest port. Foreign companies were invited to explore and drill for oil, a move
reversing over fifty years of government policy.
Mexican firms launched a number of cooperative ventures with U.S.
firms which promised to expand their markets. Vitro, the $2.76 billion glass manufacturer
in Monterrey, signed aa agreement with Corning Glass that will put Vitro's products in
U.S. stores. Wal-Mart, the U.S. retailing giant will open three stores in Mexico in
collaboration with a Mexican retail firm.
Social welfare. Salinas created a new agency, Solidarity (PRONASOL), to
encourage private citizens to invest sweat equity as well as money in efforts to improve
health conditions and to build small public works projects. Funded with over three billion
dollars, Solidarity made important gains in improving living conditions among the nation's
poor, reaching people who had never benefitted from previous programs. The adoption of
this approach represented a break with past government policies whereby the central
government was ladled out the largess, often on purely political grounds.
Foreign affairs. The main foreign policy goal of the Salinas
administration is the successful negotiation of a free trade agreement with the United
States and Canada. Mexico lobbied diligently to help President George Bush successfully
obtain fast-track negotiating authority for a North American Free Trade Agreement. Since
that authority was obtained in May, Mexican representatives have met with their
counterparts in Canada and the United States to hammer out a series of agreements to be
submitted to their respective governments in 1992 and tobe effective in 1993.
Simultaneously, Mexico sought expansion of its economic activity in
Central America. In January, the presidents of Costa Rica, Guatemala, Honduras, Nicaragua,
and El Salvador met with President Salinas in southern Mexico to discuss plans for a free
trade agreement by 1996 and devise a new payment schedule for Mexican oil. Mexico has long
been a supplier of subsidized oil to these nations, a special relationship it is now using
to obtain more favorable trade terms.
Continued trade and investment initiatives were made in Japan and
Europe as the government sought to open new markets and attract more foreign capital.
Mexico supported the Persian Gulf War but limited its participation.
Many citizens opposed any participation but the government joined the coalition in order
to improve relations with the United States.
