Going up?

Posted: 29 November 2012 in Uncategorized
Tags: , , , , , , ,

Is Mexico “going up in the world”?

It is according to the Economist, which gives scant attention to electoral fraud and to the student movement #YoSoy132 but showers praise on the improving environment for foreign investment.

As Adam David Morton explains,

reading like some sort of advertisement, Mexico is regarded by the Economist to be on “the rise”, especially as it’s labour costs have shifted closer to China. In 2000 it cost just $0.32 an hour to employ a Chinese manufacturing worker, compared to $1.51 in Mexico. By 2011, the cost of Chinese labour had quintupled to $1.63, compared to $2.10 in Mexico. This means that the minimum wage in Shanghai and Qingdao is now higher than in Mexico City and Monterrey with cheaper transportation costs, favourable tariffs, opening financial credit, and a looming oil boom adding to Mexico’s attraction for foreign capital. With plants in Cuernavaca and Aguascalientes, the Japanese car giant Nissan will soon be producing a car nearly every 30 seconds in Mexico. Meanwhile, in nearby Guanajuato, Mazda and Honda are building factories and in Puebla Audi is constructing a $1.3 billion plant. Mexico is the world’s fourth-biggest auto exporter soon to be producing some 4 million vehicles.

Lurking behind this glitzy façade, though, is the approval of radical labour law reforms that enables firms to hire and fire workers more easily, that aims to shorten labour disputes, and converts the minimum wage from an hourly to a daily rate. Productivity and competitiveness might increase but even though a full attack on unions was offset, labour will be exploited to the full in order to fulfil such “modernisation”. As detailed in The New York Times, there is ‘a strong push to “modernise” trade deals, speed up or add new crossings at the border for commerce, court foreign investment to take advantage of vast, newly discovered shale gas fields near the United States border and generate more quality jobs’.

Yet the bigger picture here is linked to the earlier moves by Calderón to privatise the electrical system and energy sectors in Mexico as an extension of neoliberalisation, which gained increased opposition from the Mexican Electricians’ Union (SME) and factions within the General Union of Mexican Electrical Workers (SUTERM). Such labour activism was at the centre of forming the Front Against Privatisation of the petroleum and electric power industries in order to articulate a more significant demonstration of wider democratic struggle in Mexico. This focus became highly significant following Calderón’s decree to coercively liquidate the state-owned Compañía Luz y Fuerza del Centro (LyFC), in October 2009, seize its facilities with federal police, and sacking 44,000 workers of the militant SME in an attempt to weaken the power of organised labour and establish a new round of investor growth in the energy sector, while leading to general strike mobilisations by the SME facing a struggle for its survival. Further energy reform is now on the agenda in Mexico with Pemex, the state-run oil and gas company, targeted for privatisation in order to unleash exploration of the 30 billion barrels of oil under the Gulf of Mexico and compete with Brazil’s Petrobras.

The sanguine view of the Economist – once dismissed quite nicely by Nikolai Bukharin as ‘the organ of the English financiers’ – is that Mexico is “going up” as its economy grows faster than Brazil’s in both 2011 and 2012.

Meanwhile, the price will be paid by ever more super-exploited Mexican labour backed up by the armour of coercion in terms of vote rigging, authoritarianism, and corruption. Whether the #YoSoy132 democratising movement and wider labour struggles can challenge this and reclaim spaces for anti-capitalist struggle and “unite the contingent” remains to be seen.

And one last note: while Bukharin was certainly correct in his time, the Economist (as Martha Starr has shown) has today become the organ of the U.S. global business elite.

  1. Just to put some objective numbers on the ‘rising economy’ of Mexico, since 1982 (the debt crisis) growth has averaged around 2.3% and since 2003, when the periphery grew really fast, at around 2.5%. Rising without growth or better income distribution, that’s truly a Virgin of Guadalupe’s miracle.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s