FORBES – Luis Rubio
The incapacity of the Mexican economy to achieve high growth rates has been a theme of controversy for decades. In fact, at least since the seventies, there’s been no government that hasn’t undertaken some initiative oriented toward stimulating growth. Some did this with debt-financed governmental spending, other with ambitious reforms and yet others with stable and reliable financial administration. Although there have been some good years, the fact is plain that growth has been markedly inferior to the needs of the country and to that which the economists estimate as feasible. This year, for example, the two main sources of growth will be exports and internal consumption, both of these the product of the U.S. economy through remittances sent by Mexicans residing there and exports from Mexican manufacturers.
Countless diagnoses seek to explain the phenomenon of lack of growth. Some emphasize problems of security and infrastructure, others maintain the absence of the Rule of Law and of the capacity of rendering that contracts be complied with. I have no doubt that all of those diagnoses are part of the problem, but it seems to me that there is a more profound issue that explains the set of circumstances more convincingly. If one were to observe the fact that the rates of growth of foreign investment are discerningly superior to those of national investment, it is not difficult to explain why: while foreign investment enjoys solid legal guarantees thanks to NAFTA, domestic investment depends on the tenor of the government in turn. The fact that a government holds the capacity to influence outcomes constitutes a highly obvious factor that something is wrong.
My impression is that the underlying problem we are dealing with is that the country is emerging from an era in which the government was constituted from a revolutionary movement and has not stopped acting as such. That is, in contrast with governments emanating from the society or attempting to respond to the society’s demands and needs, Mexico’s derives from the group that won the revolutionary war and that never felt obligated to the population. Fidel Velázquez, the legendary labor leader, affirmed on one occasion that the government “came in by way of arms and will have to be removed by way of arms”. The point is that the system of government has not evolved toward democracy or in the search for forms that allow it to professionalize itself. If one observes the way that the rules of the game (the real rules, not those found in the laws and bylaws) are modified every time a new administration takes office, it is difficult not to conclude that there is a fundamental problem of institutional weakness in the governmental structure.
The problem has become more acute in that the system was modified since the nineties when the first transcendent electoral reform (1996) led the one-party system to become tri-party. That is, Mexican democracy has taken important steps forward in electoral matters, but it has never opened the system in terms of power. What the diverse electoral reforms since 1996 accomplished was to open the system to two new actors, the PAN and the PRD, but without altering the power structure in Mexican society. This is neither good nor bad, except that, aside from incorporating those parties into the power structure, the quality of the government did not take a turn for the better nor did the legitimacy of the system. The fact that the growth of the economy has not improved says it all.
The problem at the core is that the objectives that have been sought by means of that ensemble of (dissimilar) reforms cannot be achieved without modifying the system of government, because much of what impedes the accomplishment of the reforms and their success refers to the manner of functioning (or not functioning) of the political system. The problem of the power manifests itself in diverse ways: in the permanently conflictive nature of the system, in the dreadful quality of governance that equally characterizes the federal government and that of the states and municipalities, in the lack of continuity of public policies, in the question of security, and in the absence of a judicial system that solves everyday problems.
The problem is an obvious one and is manifested in the diagnoses debated in the public arena, but it will only be solved to the extent that the society obliges the politicians to respond or for leadership to materialize that is capable of initiating a modern and functional institutional buildup. The recent elections were a good start, but the challenge is enormous.
@lrubiof