The Costs of Doing Nothing

Luis Rubio

The Mexican book of anecdotes tells the story of President Adolfo Ruiz Cortines (1952-1958) keeping a completely tidy desk, with the exception of two bins: the first was labeled “Problems that resolve themselves” and the second, “Problems that time takes care of”. This political philosophy, carried over time, allowed successive Mexican administrations back in the middle of the 20th century to maintain the country in peace during some time, but was not able to avoid the regime’s collapse. Like so many moments in Mexico’s history –and that of the world-, things work until they don’t.

The epoch of Porfirio Díaz (1876-1910) functioned for a time, but later collapsed; the “stabilizing development” era (1940s-1970s) afforded the country some decades of accelerated growth until its inherent limitations ended it on rendering it unviable. The different French Republics encountered a similar fate, precisely akin to that which took place in the era of the reforms during Mexico’s most recent decades. Each of these examples dawned with great expectations but arrived at its destination exhausted, in good measure due to the complacency generated.

A great initiative is launched, whatever necessary is done for it to work effectively but, some years later, it wears out and no one does anything to correct its errors, insufficiencies or negative byproducts. The much-heralded process yields decreasing benefits until it collapses; that is what happened in Mexico from the 1940’s and until the beginning of the 1980’s. Instead of resolving the problems, updating the model, introducing novel elements and components, paving the way forward, Mexico’s history has been one of steering clear of difficult decisions, preserving predatory interests, protecting politically favored groups and, in a word, coddling the status quo. The outcome should surprise nobody: insufficient or incomplete results, unsatisfied expectations and, at the end of the day, collapse in the form of electoral rejection of the reformer project.

If something is clear about the reforming process of the 1980’s to date it is that the reforms were not sufficiently ambitious or, at least, they were not imbued with the integral drive required to be successful. It was claimed that it was possible to liberalize the importation of goods, but not to do so with services, leaving the industrialists facing top-notch competition without access to credit, insurance and diverse services (communications, infrastructure, etc.) similar to those typifying the producers of other countries.

It was claimed that it was possible to transform education and provide Mexican children with the tools and opportunities that would be required for them in the future to compete with their Japanese, French or Brazilian peers, without modifying the petty tyrannical control characterizing the Teachers Union (SNTE) or its radical appendages like the CNTE. It was claimed that some could be submitted to competition while others were protected. Under conditions such as these, it is impossible to envisage the success of a project. The evidence is reality.

Each of the decisions to impede the reforms can be explained analytically in terms of the actors and the specific correlation of forces at each particular juncture, a circumstance that is neither exceptional nor exclusive to Mexico, but it is also evident that there was enormous complacency in all of the ambits of political, economic, and union power. In contrast to countries that had no alternative other than to keep working to make possible a substantial improvement in their populations’ life levels, in Mexico migration to the United States and NAFTA let everyone rest on their laurels: migration diminished the social pressure and NAFTA created a state of exception within the country that attracted investment. Rather than extending that space in order to generalize it and for the exception to be what was not working, which would have required affecting diverse interests close to the “system,” all of the key actors became complacent and engendered an environment that rendered inevitable, in retrospect, the excess and consequent popular rejection of the status quo.

It is fortunate that the country enjoys the privilege of having an increasingly wealthy population residing outside of Mexico that sustains a huge part of the citizenry, above all in rural areas, through its ongoing remittances. Also implicit in this are the exports, which permit maintaining stability in the balance of payments and contributing decisively to the growth of vast regions of the country. However, these are exceptions and, given the current American context, overly precarious situations. Like its predecessors, the government of Andrés Manuel López Obrador (AMLO) benefits from these elements but cannot rely on them, because both are in the sights of Trump.

 

Whichever way President López Obrador takes in matters of economic development, there are two circumstances that he will be unable to avoid: on the one hand, he must procure a high growth rate: the notion that development can be achieved without growth is mere fantasy. On its part, growth requires private investment, which will only be attained when the uncertainty emanating from the government ceases. On the other hand, the only way to achieve growth that is likely to advance toward development is with an inclusive strategy that promotes social mobility, something natural in the 20th century but nearly nonexistent at present.

 

* Luis Rubio is chairman of the Mexican Council on Foreign Relations and of México Evalúa-CIDAC. A Spanish version of this Op-Ed appeared first in Reforma’s newspaper print edition. 

Twitter: @lrubiof

https://mexicotoday.com/2020/02/25/opinion-the-costs-of-doing-nothing/