What’s next?

The story tells that on the eve of the Battle of Trafalgar, Admiral Nelson called his captains and showed them a fire poker and told them: “I do not care where to train this instrument, except where Napoleon tells me to, because then I will do exactly the opposite.” The members of the Mexican Electrical Workers Union (SME in Spanish) seem to have concluded that they could do anything, even poke the president’s eye, without any consequences. After decades of waiting, Mexican society got the news that they would finally get rid of the plague that not only produced constant blackouts, but stole from it without scruples. In a single act, President Calderon was able to shake off three years of mediocrity, and the “Atenco syndrome” (namely, Fox’s inability to build the Mexico city airport when faced with the slightest popular mobilization), and open a door of opportunity that he and his party had been promising Mexicans for years.


So far, the government has demonstrated something that we knew the president had in him (an unstinting capacity to make decisions), but also the ability to carry them out (something that has not always been true). The way this process has evolved allows us to assess each component of the decision separately, together with the rest of the political forces and myths that accompany them. The Mexican Electrical Workers Union has given us a unique window of observation.


Let’s start with the obvious: the explanation of the measures taken by the government has been less than optimal. While the SME has for years been a very militant union -always ready to create conflict, block roads and raise havoc, even before the company was acquired by the state-, the ills of the Light and Power Company cannot be solely attributed to its union. Instead of managing the company, many administrations over the past several decades simply relinquished control of the company to the union, a fact which may explain its poor condition, but certainly does not free the government of its responsibility. In their very particular way of solving (or hiding) problems, the system devised by the PRI always favored cooptation over exercising the authority and responsibility that was required to manage the company. This defective relationship led to a company that did not operate on the basis of productivity or efficiency but on relationships of power. The SME became abusive because the other side was always willing to pay in exchange for peace. The rationale of blackmail -and the permanent threat of upsetting the most politically explosive region and part of the population (those living in such a complex urban environment as Mexico city and its surrounding areas)- gave the union an aura of invulnerability. The union, in turn, sometimes supported some governments while others were simply subject to extortion. Both tactics seemed to work for the government and the union. As to the cost it entailed, well, too bad.


The government of President Calderon was about to follow the same logic of accepting endless extortion of this and other unions and interests. Unlike the PRI governments, whose letter of introduction was political stability, even if costly, the two PAN administrations offered change, cleanliness and the end of corruption. However, until this juncture, they had not shown the ability or willingness to do so. The act of liquidating the Light and Power Company changes the context and, to the extent that the government upholds its decision, it opens up enormous opportunities for the future. It all depends on what the government does from now on.


The context here is crucial. In the old political system there was a counterweight against abusive powers that prevented them from going too far. It was in these circumstances that the so called quinazo (after the jailing of the infamous oil union leader named La Quina early in the Salinas administration) took place: beyond the unquestionable fact that it took huge guts to imprison the oil leader, actually it was the enormous power of the old presidency against a quasi independent power that had violated with the unwritten rules of that regime (to never challenge the president). The decision by President Calderon takes place in a very different context where there is a host of hyper-powerful groups (hence the name “de facto powers”, that describes those who live above the law –in all walks of life- and with sufficient power to challenge the government and avoid any competition), which today’s presidency lacks the power to submit the way it happened in the past. The closing of the Light and Power Company is therefore infinitely more courageous, but also more risky.


We still need to know if this is the beginning or end of the story. Once the current process is concluded, where many elements of risk will persist for some time, the big question is what comes next. The reactions we have observed so far are, in almost all cases, predictable. Society is expectant, hoping there are no blackouts and that the transition towards the Federal Commission of Electricity (the utility that serves the rest of the nation) is uneventful. If these expectations are met, everybody will remember this moment happily. The political parties have faced the very difficult position of having to define themselves against a union characterized more by its excesses and corruption than by its productivity. Anticipating this, and disarming many critics, the government proposed an extremely generous severance package for company’s employees and also stressed that it does not intend to carry out the privatization of any part of the company. The oddest thing was that all these critics, including some political parties, were forced to defend their cronies on the basis of their ineptitude, abuse and corruption. It looked beyond dignity and not naturally endearing to an electorate that has known only bad service.


What is not obvious is whether the government will leverage this success to advance the project of change than its predecessor and its party have been feasting on, but have not accomplished, or whether this will be an exceptional and isolated act of courage in a sea of tears. The quinazo is also relevant here. President Salinas deposed a leader who had dared to challenge the presidency, but did not go any further. It proved to be no more than a settlement of scores among contending powers: he did not change the company, in that case Pemex, that continues to be the same nest of corruption, nor did he benefit society in any way. The issue, of course, is not the Light and Power Company since this has been liquidated, but the rest of the government-owned enterprises and, generally, the very core of the way the government operates. History and tradition in the Mexican government always involve the purchase of wills, as the labor contracts of other public entities show (like oil and education) and the endless transfers of monies -legal or illegal- to the media conglomerates. No wonder the “de facto powers” do as they please and shamelessly end up getting away with anything.


President Calderon has created a great opportunity: to begin to transform Mexico into a modern society, where the interaction among all parties (unions, government, business, media and political parties) is based on open and transparent laws and procedures. The opportunity lies in beginning to turn Mexico into a law abiding country with strong institutions. That is the real challenge.