Luis Rubio

“Raise ravens and they’ll pluck your eyes out” is the epitaph of Carlos Saura’s extraordinary film Cría Cuervos. The same can be said for all of the unions, radical groups, dissidents and parallel organizations that the PRIists and their acolytes created over time with the idea of these serving to counterbalance or as alternatives in the face of the excesses of their own constituencies. Fifty years later, the reality is quite distinct: the original party sectors (workers, peasants and the so-called “popular”) languish (although their leaders continue to plunder) while the groups engendered as supposed counterweights defy the government in Guerrero, Oaxaca and in diverse sectors of the economy. A government that aspires to enforce its authority will not achieve this insofar as it does not put its own house in order.

In the Greek tragedies the audience knows ahead of time that the matter will end in disaster. The only ones who appear to be undaunted are the bureaucrats and politicians who imagine, as if they thought of themselves as Sophocles, that they can avoid the horror to come. The tragedy unfolds and plays out toward its inevitable conclusion, but the actors seem impassive, ignorant of what is to follow. They brought about the phenomenon, financed and drove it, but are not responsible for anything. The tragedy develops as if it were an inexorable process, one in which no one can interfere. The only thing left is arrogance, pride and the politician’s deception because, although clearly being the guilty parties, they exist in a state of forgetfulness, adopting maximalist stances, as if their actions involved no consequences. History is marked by politicians who changed parties, acquired new loyalties or continue, deep down, to espouse the same ones, but who are incapable of uttering a lone mea culpa. What is left are union bosses who everyone now wants to forget, the guerillas created ex profeso, the dissidents operating under the auspices of the federal government and the paid demonstrators. What can’t be ignored are the consequences for the peace of the country and for the daily lives of the citizenry.

If one does not accept the origin of the rampant disorder it is impossible to respond or, more to the point, to aspire to recovering the authority’s legitimacy. It’s easy is place the blame on whatever or whichever ex-president or party, but the reality is that the disorder in the country began as far back as 1968 and nothing since then has altered the trend. I don’t want to suggest with this that all governments after that date were dishonest, ignorant or irresponsible. The point is not to grade them but to ascertain the reality in which we live today.

The disorder was the product of two factors that were in certain fashion contradictory. One was the decision (explicit or implicit) of the governments to abdicate their responsibility of governing, defining this as keeping the peace, creating conditions for the country’s development, penalizing clearly illegal behaviors and adhering to the mandate of the law and that of the institutional framework. Governmental paralysis set in due to the weight of the sensation of the illegitimacy that characterized the PRIists since then and of the PANists’ incompetence that came later. This factor is no longer real.

The other factor that led to the current disorder concerns the clash of perceptions, realities and actions that has distinguished public policy making in these decades and that has paralyzed the present government. First is the fact of Mexico’s open economy. Although many continue to dispute and condemn the fact, the reality is that the Mexican economy has been basically open since the mid-eighties; contradictions in the bosom of this opening and the absurdities that some of its limitations has spawned can be discussed, but the fact is that the main motor of the Mexican economy are its exports. This can please or displease, but nothing changes the facts. The government can accept or reject this reality, but it would be to its benefit to accept it soon.

In second place we come upon the immaculate past, this as if it were an absolute condition. From the past emanate all of our myths and others that have been affixed to these. Here we encounter an obsolete petroleum policy, apathy about gas, the myths about the U.S., the lack of recognition of the chaos that specific PRIists generated in their pursuit of power without making amends for the costs and risks entailed in their actions, and the pretension that it is possible to differentiate between domestic and foreign investors. In a global economy the only thing that exists is a market in which investors require judicial, patrimonial and physical certainty, energy resources and functional dialogue with the government. If order is sought, we must begin by resolving the problems and myths generated in the PRIist  tent, that of today and that of before.

Finally, perhaps the country’s greatest challenge can be summed up in a very simple contraposition: modernity vs. tradition. Modernity implies constructing the country in form: with all of the structures of authority, but also with the checks and balances that are crucial for guaranteeing certainty to the population, to the investors and to our foreign partners. Modernity implies a government capable of acting (and the present one has exhibited an abundant capacity for this) but also a viable and realistic development project, something that does not appear to be present in the contemporary vision.

What’s important to citizens is a functional government that does not abuse them as well as a growing economy. This is a definition of modernity that, it seems to me, the entire population would accept. The problem is that as long as the government does not embrace modernity as its own, the latter will never put in an appearance.

Within this context it is logical for the population to subscribe more to skepticism than to the optimism evinced by international publications. Surveys show an acute abyss between the population’s opinions with respect to those of the opinion makers. The experience of past few presidential terms suggests that, to the degree that there is a divorce between both contingents, the government will come out losing. Will Rogers, an American actor of the early 1900s, said it well: “it’s easy to be a humorist, you have the whole government working for you”.

The last thing President Peña’s government wants is for the population to end up engulfed in the traditional pessimism of the Mexican, but the only way to avoid this is guaranteeing its rights and freedoms and achieving sustainable economic growth. Ironically, in contrast with the PRIist era of yesteryear, both will coincide when the government accepts the legitimacy it earned in the ballot boxes and complies with its responsibility of enforcing the law and constructing solid and permanent institutions.

www.cidac.org

@lrubiof

 REFORMA

Luis Rubio

Mexican governments have been talking about reforms for decades. The issue has become a mantra: without reforms, they say, it is impossible to achieve high growth rates. Act Two, from the eighties on, a not inconsequential number of reforms have been proposed, the majority of which have had benign effects. In objective terms, the country has been transformed during these years and many things have improved in impacting fashion. However, two paradoxical things have taken place: on the one hand, the mantra of the reforms remains alive and well and is the source of controversy and permanent political conflict. On the other hand, no one seems to be satisfied with the results.

David Konzevik, an exceptional observer of this changing world, years ago developed a thesis on the “Revolution of Expectations”, with which he explains that, in a globalized world, it doesn’t matter how much the reality has improved if the perception –the latter understood as the comparison people make with what happens in other latitudes- is that much is lacking to catch up with the others. From this relativity, states Konsevik, emanate many of the problems of governance and stability of emerging countries. The thesis explains the side of expectations and perceptions, thus of a key source of conflict. What this leaves for analysis is why reforms, supposedly conceived of and designed to improve the reality and render possible a favorable comparison with other nations, do not fulfill their mission.

The answer doubtlessly lies in the basic problem of reforms: to be successful, reforms entail affecting interests, precisely those that benefit from the status quo. If one accepts the notion that to reform implies affecting interests, then the conflict that lies behind the reforms –in fiscal as well as in labor, energy or education- contains very little of the ideological and a great deal of the substantive. Ideology and discourse are instruments to appeal to people’s emotions, garnering supporters and creating a sensation of chaos and epic conflagration. What are relevant are the interests.

Many of the reforms that come to be formally proposed are already impaired by many limitations. In the eighties, the main problem was the inherent contradiction in the reform project: the government wanted to reactivate the economy but didn’t want to undermine the structure of PRIist interests. This rationale entailed evident consequences: the economy advanced on some fronts but continued to be immobilized on others. The relevant question is whether something changed between then and now. In that era the government understood the need for reform, but its ulterior motive was to maintain power. Now that there have been two processes of alternation of parties in government, it is reasonable to ask whether the rationale has changed. One possibility is that, given that the PRI never had to reform itself, the logic continues intact. Another would indicate that it is precisely to preserve the power in a competitive political environment, that the government has all of the incentives to reform properly and fleet-footedly. Time will tell which of these possibilities proved to be the right one.

In their public dimension, reforms have two moments of dispute and much of their limited achievement is explained by the excessive concentration of debate in the first of these. The initial dispute is always in Congress, for it is there that the content of what is proposed to be reformed is debated. It is there that the defense and attack are concentrated –as well as the eye of the analysts and politicians- and where the special interests and those promoting the reforms butt heads. However, beyond the disputes, history shows that, however diluted, many of the proposed reforms are ultimately adopted but the reality practically doesn’t change. The question is why.

The answer lies at the second moment of the reforms: what’s really transcending about a reform is its process of implementation. We all know that in Mexico there’s an enormous gap between the letter of the law and the reality; in the matter of reforms the relevant moment is when a law (a given reform) has to be made effective. The execution of what is proposed for reform is where the true test of the capacity of transformation lies, for it is there, in real life, where the special interests and those charged with turning the reform into reality confront each other. It is at this second moment where, in many cases, Mexico has failed miserably.

Some of the failures are directly concerned with the way the reform itself was decided upon and there is no better example than that of the privatizations, in which the criterion was fiscal revenue and not industrial organization, that is, the manner in which the respective market would function after the transfer is carried out of the privatized entity to a private entrepreneur. Others fail due to their poor or incomplete implementation. For example, some international companies affirm that, in the case of deep-water oil, the law is sufficient for them to be able to compete for a contract, but also that they anticipate an enormous political conflict the day that a bidding process for a contract were to be announced. That is, the law has been reformed but not so the reality,

However conflictive the approval process of a reform, the crucial moment is that of implementation. A reform of the educational system implies a change in the relationship of the government with over one million teachers and the entire structure of union leadership as well as the bureaucracy. Reforming PEMEX would imply, first turning PEMEX into a company rather than the bureaucratic-political entity that grants favors, corruption and slush funds. A reform in any of these ambits implies a political operation of tremendous scope and risks. The point is that the execution of a reform process is much more complex than the debate at the legislative level that precedes it. It is here that the reform touches ground: where it triumphs or fails. Where it achieves a positive result or a mediocre one.

In his great history on the end of the Roman Empire, Edward Gibbon wrote that, for change, “a heart to resolve, a head to contrive, and a hand to execute” are required. What Gibbon knew in the XVIII Century continues to be valid today: a reform is irrelevant if not administered to perfection and this demands a great capacity of political operation. This capacity is inherent in the present government. What remains to be seen is the quality of the reforms that it ends promoting and its willingness for affecting the beneficiaries of the status quo, many of these close to the heart of the PRI.

Luis Rubio

Mexican governments have been talking about reforms for decades. The issue has become a mantra: without reforms, they say, it is impossible to achieve high growth rates. Act Two, from the eighties on, a not inconsequential number of reforms have been proposed, the majority of which have had benign effects. In objective terms, the country has been transformed during these years and many things have improved in impacting fashion. However, two paradoxical things have taken place: on the one hand, the mantra of the reforms remains alive and well and is the source of controversy and permanent political conflict. On the other hand, no one seems to be satisfied with the results.

David Konzevik, an exceptional observer of this changing world, years ago developed a thesis on the “Revolution of Expectations”, with which he explains that, in a globalized world, it doesn’t matter how much the reality has improved if the perception –the latter understood as the comparison people make with what happens in other latitudes- is that much is lacking to catch up with the others. From this relativity, states Konsevik, emanate many of the problems of governance and stability of emerging countries. The thesis explains the side of expectations and perceptions, thus of a key source of conflict. What this leaves for analysis is why reforms, supposedly conceived of and designed to improve the reality and render possible a favorable comparison with other nations, do not fulfill their mission.

The answer doubtlessly lies in the basic problem of reforms: to be successful, reforms entail affecting interests, precisely those that benefit from the status quo. If one accepts the notion that to reform implies affecting interests, then the conflict that lies behind the reforms –in fiscal as well as in labor, energy or education- contains very little of the ideological and a great deal of the substantive. Ideology and discourse are instruments to appeal to people’s emotions, garnering supporters and creating a sensation of chaos and epic conflagration. What are relevant are the interests.

Many of the reforms that come to be formally proposed are already impaired by many limitations. In the eighties, the main problem was the inherent contradiction in the reform project: the government wanted to reactivate the economy but didn’t want to undermine the structure of PRIist interests. This rationale entailed evident consequences: the economy advanced on some fronts but continued to be immobilized on others. The relevant question is whether something changed between then and now. In that era the government understood the need for reform, but its ulterior motive was to maintain power. Now that there have been two processes of alternation of parties in government, it is reasonable to ask whether the rationale has changed. One possibility is that, given that the PRI never had to reform itself, the logic continues intact. Another would indicate that it is precisely to preserve the power in a competitive political environment, that the government has all of the incentives to reform properly and fleet-footedly. Time will tell which of these possibilities proved to be the right one.

In their public dimension, reforms have two moments of dispute and much of their limited achievement is explained by the excessive concentration of debate in the first of these. The initial dispute is always in Congress, for it is there that the content of what is proposed to be reformed is debated. It is there that the defense and attack are concentrated –as well as the eye of the analysts and politicians- and where the special interests and those promoting the reforms butt heads. However, beyond the disputes, history shows that, however diluted, many of the proposed reforms are ultimately adopted but the reality practically doesn’t change. The question is why.

The answer lies at the second moment of the reforms: what’s really transcending about a reform is its process of implementation. We all know that in Mexico there’s an enormous gap between the letter of the law and the reality; in the matter of reforms the relevant moment is when a law (a given reform) has to be made effective. The execution of what is proposed for reform is where the true test of the capacity of transformation lies, for it is there, in real life, where the special interests and those charged with turning the reform into reality confront each other. It is at this second moment where, in many cases, Mexico has failed miserably.

Some of the failures are directly concerned with the way the reform itself was decided upon and there is no better example than that of the privatizations, in which the criterion was fiscal revenue and not industrial organization, that is, the manner in which the respective market would function after the transfer is carried out of the privatized entity to a private entrepreneur. Others fail due to their poor or incomplete implementation. For example, some international companies affirm that, in the case of deep-water oil, the law is sufficient for them to be able to compete for a contract, but also that they anticipate an enormous political conflict the day that a bidding process for a contract were to be announced. That is, the law has been reformed but not so the reality,

However conflictive the approval process of a reform, the crucial moment is that of implementation. A reform of the educational system implies a change in the relationship of the government with over one million teachers and the entire structure of union leadership as well as the bureaucracy. Reforming PEMEX would imply, first turning PEMEX into a company rather than the bureaucratic-political entity that grants favors, corruption and slush funds. A reform in any of these ambits implies a political operation of tremendous scope and risks. The point is that the execution of a reform process is much more complex than the debate at the legislative level that precedes it. It is here that the reform touches ground: where it triumphs or fails. Where it achieves a positive result or a mediocre one.

In his great history on the end of the Roman Empire, Edward Gibbon wrote that, for change, “a heart to resolve, a head to contrive, and a hand to execute” are required. What Gibbon knew in the XVIII Century continues to be valid today: a reform is irrelevant if not administered to perfection and this demands a great capacity of political operation. This capacity is inherent in the present government. What remains to be seen is the quality of the reforms that it ends promoting and its willingness for affecting the beneficiaries of the status quo, many of these close to the heart of the PRI.

FORBES- Luis Rubio

In the independent Mexico there have been two eras of high economic growth: that of the Porfiriato at the end of the XIX Century and the good years of stabilizing development, between the forties and the end of the sixties of the XX Century. The political characteristic of both moments was centralization of power. In a country with such prominent geographic, ethic, demographic and physical dispersion and diversity, the centrifugal forces have always been enormous, the reason why it’s tempting to establish an automatic correlation between the two phenomena: control commensurate with growth; diversity and decentralization commensurate with chaos. However, this correlation is non-existent: there are many factors that intervene. More importantly, the era of globalization creates new realities that make it impossible to establish a causal relationship between political centralization and economic success.

To begin with, the context is decisive: with distinct characteristics, the common denominator between the Porfirio Díaz years and those of stabilizing development was the existence of a capacity of process control, information control and, above all, control of crucial factors such as financial stability, infrastructure development,   credit growth and control of the work force by means of the unions operating under the aegis of an all-powerful government. Some of these factors continue to be crucial to economic growth, but others are the product of the specific moment. The context matters and the current one has changed radically.

Today’s success factors include many of those from the past (such as infrastructure, financial stability and the existence of a functional government), but the key to add value resides in the capacity of individuals to furnish ideas, creativity and, in general, contributions that are the product of intellectual activity that raises productivity in the era of information and services, very distinct from that which preceded it in the agricultural and industrial ambit. In terms of their essence, two things have changed: physical force has been replaced by intellectual creativity and physical boundaries -like national borders- have ceased to be a limiting factor. At present commerce and the exchange of ideas are vital for growth. The importance and transcendence of the government has not changed: what has changed is the nature of its function.

Kofi Annan, former Secretary General of the United Nations, said that “we cannot wait for the government to do everything. Globalization operates on Internet time”. In effect, a government cannot do everything, but in an era of vast change, of permanent change in fact, what is crucial is for the government to adapt itself to the needs of the economy and the society, which undergo constant transformation. Of course, there are leading functions that do not change –such as maintaining the population’s social peace and security- but there are others that modify themselves constantly: some become obsolete, others take on unfathomable transcendence.

The new government has instated itself as a factor of control and of power. With this it has been able to devise the perception that the solutions to the dilemmas facing the country are found in its hands. This is no small achievement, above all after an era of conflict, violence and uncertainty that began in 1994 and only got worse. The presence of a government that emblemizes a sense of authority with its presence has been welcomed by the population. However, the form and content that it has exhibited to date is very similar to that of the sixties of the past century, as if it were keen on recreating that era. The problem is that both globalization as well as the factors that make success possible at present alters the panorama. Success today depends on the existence of a government that works but also on an economic strategy compatible with the reality of globalization and with the characteristics of an economy in which the manpower component is increasingly less relevant in terms of adding value. Instead of controlling the population, what must be created is an educative, health and cultural environment that favors the development of human capital; rather than control over the economy the key lies in promoting entrepreneurial activity, eliminating restrictions and allowing for constant change.

The key in the era of globalization resides in the capacity of individuals to create and add value as well as to increase productivity. The presence of a strong government with clearness of vision is a crucial factor in the process, as long as it plies this strength to engender conditions for progress and not merely for controlling the population. That is, in this historic era, control and development are contradictory.  If one desires to achieve the latter it will be imperative to employ the former with parsimony and intelligence.

www.cidac.org
@lrubiof

Luis Rubio

The country continues to be divided, not only in positions and preferences but also in the concept of how Mexicans find themselves as a society. For some Mexicans blocking a highway is something natural and acceptable: all’s fair in love and war. For others the blocking of a means of communication constitutes a constitutional violation. For the former the use of force is tantamount to repression, thus reprehensible and should never take place; for others, force is a central instrument of the rule of law. This is about not only views at cross-purposes but also about radically different lifestyles: for some “the worse the better”, for others “we’re just getting along”. In the last analysis, the deep-seated issues that confront Mexican society are never confronted: the division that stupefies the country and that hinders it from constructing a platform of development in which we all dovetail. None of this is new, but the terrible thing about it is that for fifty years Mexicans have been, at least since 1968, entangled in this labyrinth and there’s nothing to suggest that we have advanced even an iota.

It’s easy to assign blame, insults or epithets in every direction, as has happened with the roadblocks organized by National Coordination of Education Workers (CNTE) zealots, but that won’t get us very far. To the extent that these groups live within an environment or a power rationale distinct from that of those who accept the formal rules of the game (be these wrong, wanting or insufficient), the rules are inapplicable. From this perspective, it’s worthless to condemn a behavior when the selfsame objective of an individual who behaves in a determined manner is to make the opposition or reprehension of the normative framework felt that “others” consider valid. The contradiction is what lies at the heart of the level of conflict that the country is undergoing (without including organized crime, another matter entirely) and due to which, for decades, there has been not even an attempt at response.

Worse yet, the existence of views, positions and strategies at cross-purposes has fostered the development of an entire industry of political manipulation –created and fostered from the government and then found uncontrollable-, much of which is inspired less by great philosophical principles or ideals than by the most mundane pragmatism, known in the dictionary as blackmail and extortion. That’s how Mexico City became the oasis of demonstrations or how, instead of seeking solutions to the core problematic, some unions have preyed upon, some presidential candidacies have been launched solely on the basis of resentment, or how some politicians have taken refuge behind ever higher walls: the official presidential residence Los Pinos is a good example of this.

The blackmail industry today includes everyone: from the governor who appears to demonstrate alone in front of the National Palace to those who commandeer conflict in the most remote nook and cranny of the country to Insurgentes Avenue, not to resolve the problems of the indigenous but rather to nudge along their own personal cause. Between one thing and another are secreted dissidents, negotiators and blackmailers. But the underlying point is not the blackmail industry but the fact that in effect there is an essential cleavage at the heart of the country and the Mexican State.

In the old PRI era the country underwent daily mobilizations of this nature, but the system enjoyed the capacity, and generally the disposition, to act and to avoid reaching extreme situations. Although it was rare for a problem to be solved, at least it was equally rare for conflicts to reach unmanageable excesses. The gradual deterioration of governmental authority, the unwillingness to employ force and the mislaying of the compass ended up converting the government itself into the prey of blackmailers.  The generalized disorder that followed was the product of apathy: the old authoritarian rules were no longer applied due to fear of consequences in the media and a novel political concept to attack the heart of the problem was not developed. The two PANist governments changed neither the logic nor the tendency. Thus their debt to the society is so great: contrary to their historical buildup, they abandoned the citizenry and exerted no effort other than continuing to pave the road to perdition.

In the face of this reality, the new government has responded in two ways: it has reorganized the structures of real power in order to recover the misplaced authority and, as occurred on the Acapulco highway, has taken action to submit the troublemakers to minimal rules of civility. This concerns two sides of the same coin: to be the authority and to exercise it before anyone who challenges it. The immediate result has moreover been commendable. The government achieved attenuating the immediate matter: however, as can be seen daily, that does not constitute a solution to the underlying theme.

Blackmail only ends when the source of the extortion is eliminated or when his/its motive is resolved. In the youthful years of the old system the former was carried out but later nothing else was done: the blackmailers were not eliminated nor were the causes of the problem attacked, which gave rise to the proliferation of blackmailers. The exercise of the authority attacks the front line but nothing else. The question is what can actually be done.

The following quotation captures the essence of the problem and, because it has nothing to do with Mexico, it seems to me that it allows one to take a less caustic and more dispassionate perspective of the nature of our challenge: “The tragedy of al Assad family rule is Syria is not that it produced tyranny”, says Robert Kaplan. “That tyranny, remember, produced sustained domestic peace after 21 changes of government in the 24 years preceding the elder el Assad’s coup… The tragedy is that the al Assads did nothing useful with the domestic peace they had established. They did not employ the order they had created to build a civil society, one that would have prevented the current war. They never converted their subjects into citizens: Citizens rise above sectarianism, whereas subjects have only sectarianism to fall back on”.

Recent events in the state of Guerrero show the worst of the old political system, together with the risks of dangerous alliances with organized crime. But the solution dwells on a political realignment with the will to employ force to make it stick. The Acapulco highway roadblock and the action by the group that is responsible and its leaders are nothing other than sectarian responses to a system with which they do not identify. They do not see that the system benefits them or that they can advance their legitimate interests via the negotiation route, because they are not, nor they feel themselves to be, citizens. They feel that they are subjects and, as such, they defy the government. The mechanism of blackmail worked very well for decades. But today the government is wrong if it thinks that it is going to dissuade them with a couple of shows of authority. What’s required is a change in the basic conception of what are the government and the citizenry. It will not be easy, but it’s the only way to break the impasse.

www.cidac.org

@lrubiof

Luis Rubio

The country continues to be divided, not only in positions and preferences but also in the concept of how Mexicans find themselves as a society. For some Mexicans blocking a highway is something natural and acceptable: all’s fair in love and war. For others the blocking of a means of communication constitutes a constitutional violation. For the former the use of force is tantamount to repression, thus reprehensible and should never take place; for others, force is a central instrument of the rule of law. This is about not only views at cross-purposes but also about radically different lifestyles: for some “the worse the better”, for others “we’re just getting along”. In the last analysis, the deep-seated issues that confront Mexican society are never confronted: the division that stupefies the country and that hinders it from constructing a platform of development in which we all dovetail. None of this is new, but the terrible thing about it is that for fifty years Mexicans have been, at least since 1968, entangled in this labyrinth and there’s nothing to suggest that we have advanced even an iota.

It’s easy to assign blame, insults or epithets in every direction, as has happened with the roadblocks organized by National Coordination of Education Workers (CNTE) zealots, but that won’t get us very far. To the extent that these groups live within an environment or a power rationale distinct from that of those who accept the formal rules of the game (be these wrong, wanting or insufficient), the rules are inapplicable. From this perspective, it’s worthless to condemn a behavior when the selfsame objective of an individual who behaves in a determined manner is to make the opposition or reprehension of the normative framework felt that “others” consider valid. The contradiction is what lies at the heart of the level of conflict that the country is undergoing (without including organized crime, another matter entirely) and due to which, for decades, there has been not even an attempt at response.

Worse yet, the existence of views, positions and strategies at cross-purposes has fostered the development of an entire industry of political manipulation –created and fostered from the government and then found uncontrollable-, much of which is inspired less by great philosophical principles or ideals than by the most mundane pragmatism, known in the dictionary as blackmail and extortion. That’s how Mexico City became the oasis of demonstrations or how, instead of seeking solutions to the core problematic, some unions have preyed upon, some presidential candidacies have been launched solely on the basis of resentment, or how some politicians have taken refuge behind ever higher walls: the official presidential residence Los Pinos is a good example of this.

The blackmail industry today includes everyone: from the governor who appears to demonstrate alone in front of the National Palace to those who commandeer conflict in the most remote nook and cranny of the country to Insurgentes Avenue, not to resolve the problems of the indigenous but rather to nudge along their own personal cause. Between one thing and another are secreted dissidents, negotiators and blackmailers. But the underlying point is not the blackmail industry but the fact that in effect there is an essential cleavage at the heart of the country and the Mexican State.

In the old PRI era the country underwent daily mobilizations of this nature, but the system enjoyed the capacity, and generally the disposition, to act and to avoid reaching extreme situations. Although it was rare for a problem to be solved, at least it was equally rare for conflicts to reach unmanageable excesses. The gradual deterioration of governmental authority, the unwillingness to employ force and the mislaying of the compass ended up converting the government itself into the prey of blackmailers.  The generalized disorder that followed was the product of apathy: the old authoritarian rules were no longer applied due to fear of consequences in the media and a novel political concept to attack the heart of the problem was not developed. The two PANist governments changed neither the logic nor the tendency. Thus their debt to the society is so great: contrary to their historical buildup, they abandoned the citizenry and exerted no effort other than continuing to pave the road to perdition.

In the face of this reality, the new government has responded in two ways: it has reorganized the structures of real power in order to recover the misplaced authority and, as occurred on the Acapulco highway, has taken action to submit the troublemakers to minimal rules of civility. This concerns two sides of the same coin: to be the authority and to exercise it before anyone who challenges it. The immediate result has moreover been commendable. The government achieved attenuating the immediate matter: however, as can be seen daily, that does not constitute a solution to the underlying theme.

Blackmail only ends when the source of the extortion is eliminated or when his/its motive is resolved. In the youthful years of the old system the former was carried out but later nothing else was done: the blackmailers were not eliminated nor were the causes of the problem attacked, which gave rise to the proliferation of blackmailers. The exercise of the authority attacks the front line but nothing else. The question is what can actually be done.

The following quotation captures the essence of the problem and, because it has nothing to do with Mexico, it seems to me that it allows one to take a less caustic and more dispassionate perspective of the nature of our challenge: “The tragedy of al Assad family rule is Syria is not that it produced tyranny”, says Robert Kaplan. “That tyranny, remember, produced sustained domestic peace after 21 changes of government in the 24 years preceding the elder el Assad’s coup… The tragedy is that the al Assads did nothing useful with the domestic peace they had established. They did not employ the order they had created to build a civil society, one that would have prevented the current war. They never converted their subjects into citizens: Citizens rise above sectarianism, whereas subjects have only sectarianism to fall back on”.

Recent events in the state of Guerrero show the worst of the old political system, together with the risks of dangerous alliances with organized crime. But the solution dwells on a political realignment with the will to employ force to make it stick. The Acapulco highway roadblock and the action by the group that is responsible and its leaders are nothing other than sectarian responses to a system with which they do not identify. They do not see that the system benefits them or that they can advance their legitimate interests via the negotiation route, because they are not, nor they feel themselves to be, citizens. They feel that they are subjects and, as such, they defy the government. The mechanism of blackmail worked very well for decades. But today the government is wrong if it thinks that it is going to dissuade them with a couple of shows of authority. What’s required is a change in the basic conception of what are the government and the citizenry. It will not be easy, but it’s the only way to break the impasse.

www.cidac.org

@lrubiof

Luis Rubio

All the evaluations of the problems of the Mexican economy usually include: lack of credit, industrial plant competitiveness and the competition from (mostly Chinese) imports. Each of these symptoms possesses its own dynamic and structure of causality; what the three have in common is that, at heart, it’s the same problem.

First off, credit. A permanent perennial complaint of business, and not a few politicians, is that referring to the Mexican economy’s relatively low level of banking penetration and, above all, the participation of credit as a percentage of the GDP. Participation of the Mexican banking system in the economy is less than in other similar economies but there are reasons that explain the difference. In Brazil, the total credit amount given to persons and businesses represented approximately 60% of the GDP in 2012, compared with 27% in Mexico. Of this 60% in Brazil, the BNDES development bank represented 21% of the GDP, that is, one third of the total credit. Taken as a whole, everything would indicate that one explanation of Mexico’s growth problems derives from the absence of credit.

More careful analysis reveals transcendent factors. On the one hand, in contrast with private banks, BNDES has taken enormous credit risks and has assumed huge liabilities of private companies. Many analysts anticipate that much of its portfolio will end up on the list of bad debts. Time will tell. With this, the numbers that are indeed comparable are 49 vs. 27, that is, a difference of 22 percentage points, not few, and that perhaps is basically explained by the nineties’ banking crisis in Mexico, which generated a financial culture much less risk-tolerant than that which formerly existed. But there is another factor that is much more revealing: the issuance of credit to both large companies and consumers is similar to the Brazilian numbers. The great difference resides in the small and medium industrial sector, where credit is all but not extended in Mexico.

The productive plant’s low competitiveness is perhaps where the main problem of national industry resides. If one listens to the sector’s businessmen, the explanation alludes to a matter of credit, the absence of support and protection on the part of the government, the informal economy and smuggling, that is, the third factor. The credit issue is real but circular: there is no credit because companies are not competitive and they are not competitive because there is no credit. The banks affirm, rightly so from my perspective, that it is not possible to extend credit to enterprises lacking a viable and competitive investment project, one likely to make these companies successful in a globalized economy. The demand for protection in the form of subsidies and tariff and non-tariff barriers to trade (a demand ever more successful in this administration) confirms what the banks say: that these companies are trying to stay alive not through their ability to produce good products at fair prices that the market demands but rather by means of protection granted to them by the government with respect to their competitors. Increasing credit through Mexico’s development bank NAFINSA would not address this problem.

In its essence, the country’s industrial problem is a mismatch between theory and reality. Up to the eighties, the structure of the Mexican economy was not very distinct from that of the Brazilian one. The development model adopted after WWII was oriented toward promoting industrial growth by means of subsidies and protection from imports. The objective was to achieve the growth of a powerful local industry through import substitution. The model favored the producer over the consumer and ended up creating a negligibly competitive industry that typically produced high-priced, low-quality goods. In the eighties, the Mexican government opted for trade liberalization with the objective of heightening the competitiveness of the economy and, through that, improving the quality and price of the goods it produced, but above all facilitating a rapid growth in overall productivity that would translate into better and higher paying jobs.

Behind the decision to liberalize lies a well known principle among scholars of the economy: that of the comparative advantage. On one occasion, the mathematician Stanislaw Ulam asked the economists’ dean of his era, Paul Samuelson, whether there were an economic principle that was, concurrently, universal and not evidently true. Samuelson immediately responded with David Ricardo’s principle of the comparative advantage, developed in 1817. Under this principle, what’s important for an economy is not its absolute capacity and ability to produce goods, but its relative capacity and ability with respect to others.

Although a country produces many things, each economy is more efficient in the production of some goods than others. Under this premise, international commerce leads a country to specialize in some type of goods that it also will export, while it imports others in which it is less efficient, thus achieving a greater level of well-being. The principle is well established and there is no doubt of its functioning. The problem is how to apply it in an economy operating under the premise of the virtual inexistence of international trade, our case until the eighties.

According to the economic theory, on liberalizing the Mexican economy, the country would have specialized in a certain type of goods (such as electronics, automobiles, engines, aviation fruits and vegetables, meat, etc., that is, all of the sectors in which Mexico is brutally competitive as an exporter) and would have abandoned other sectors in which it does not possess comparative advantages and that only existed as the result of the protection and subsidy strategy of before. Some of this did occur, which explains the disappearance of many enterprises in sectors such as toys and textiles but, thanks to the persistence of direct and indirect protection mechanisms, many companies that normally would have had to transform themselves or perish are still functioning. A few benefit at the cost of a general lesser growth of the economy.

The country is facing a dilemma that has not been resolved since the moment trade was liberalized, nearly thirty years ago: entering full speed ahead toward the construction of a modern productive plant or persisting in the protection of one sector that, as such, has no future. It can persist, but the cost is growing and can be measured in the form of bad and poorly paid jobs, low levels of economic growth and, above all, minimally productive jobs that inevitably pay the poor salaries.

www.cidac.org

@lrubiof

FORBES

Luis Rubio

One of the virtues that many scholars attribute to democracy is that nations adopting it tend to be less violent and much less inclined to enter into conflicts with others. According to this, democracy obliges governments and populations to resolve their problems through negotiation, which ordinarily debars open conflict. The theoretical logic is impeccable: a) political leaders in a democracy are required to respond to their electorate and, if they lose a war, they lose at the ballot box; b) democracies possess a natural proclivity to abstain from viewing other actors as hostile: all are potential allies; and c) democracies typically develop sturdier economic strategies, which in the main are not compatible with military conflicts. In a word, democratic leaders lack incentives to fight.

The Arab Spring was widely acclaimed, in part because of the end of authoritarian or military governments that it entailed, but also owing to the presumption that this would diminish regional conflict. I ask myself whether there are lessons that we can derive from this experience in Mexico, as much for the enthusiasm at the outset as for the disenchantment downriver.

In Mexico we have been privileged not to live in the vicinity of neighbors prone to war, at least not in the last one hundred fifty years, a circumstance that’s afforded us the luxury of feeling ourselves to be immune to these matters. When encountering conflicts, Mexicans tend to support those we identify as the victim but without an inherent awareness of what war denotes. According to some historians, the very notion of “Mexicanness” was born with the United States’ invasion of Mexico in 1847, but the sense of victimhood, said Octavio Paz, stems from pre-Colonial roots. History and neighborhood have dealt us a sui generis perspective of wars.

That from which we haven’t been exempt from is internal conflict. Beyond organized crime, the country currently withstands an untold number of conflicts that reveal a pre-democratic political state. Conflicts such as those of Oaxaca and their supposed educators, the seizure of buildings and universities in Mexico’s Federal District, work stoppages, and demonstrations designed to affect the citizenry or to close highways, are nothing but tangible examples of a pre-democratic political system. The conflicts are not resolved in the political instances (such as the Congress) or in the judicial ones. Instead of negotiation, militants employ instruments of force and pressure oriented toward imposing solutions. Certain politicians and parties are more apt to utilize this type of means, but overall, the differences are not dramatic. When a party is not in power they use anti-institutional instruments of pressure that they would never tolerate were they in power.

From this perspective, although we are unacquainted with war as a political instrument, national politics continues to evidence nondemocratic facets and methods of conflict resolution typical of corporativist, or authoritarian, political systems. Manifestations of this nature are only possible when their utilization produce results. That is, while the authority continues to favor conflict resolution in the streets above institutional instances, the conflict will go on. All are rational actors.

This should not be understood as a call for the use of firm-handedness. A government decided on favoring the institutionalization of political processes would have to progressively force –without violence but with authority- political actors to incorporate themselves into these circuits. As exemplified by union leaders who allied themselves with the government after the detention of the teachers’ union kingpin or by the owners of the telecommunications entities commending an action that severely affected the value of their companies, all the actors are rational: they all know how to read the political maneuvers and they adjust to the new reality.

A government determined to establish new rules of the game would have to begin by constructing a novel institutional structure susceptible to contributing to the achievement of these objectives. To endure, a process of political change cannot depend on how a person or a government acts, but rather on the existence of permanent rules that only institutions can underwrite.

Democracy, noted Joseph Schumpeter, is nothing more than a method for making decisions that leaves political actors no option but to submit to the normative framework and not tolerate conduct foreign to this. In Holland, the head of the Liberal Party once affirmed that he would never offend any other member of parliament because “one never knows with whom one will be required to forge a coalition in the future”. Such is the spirit of an institutionalized society.

www.cidac.org

@lrubiof

The Christian Science Monitor –
Opinion- April  17, 2013.

  Opinion

The Mexican government cannot afford the luxury of ignoring what is happening on immigration reform in the big and powerful North. And yet, it has taken a passive attitude. There are good historical reasons for this, but not a good one today.

By Luis Rubio / April 17, 2013  

Sens. John McCain (R) (left) and Chuck Schumer (D) walk away after speaking to reporters about their meeting with President Obama on a bipartisan immigration reform bill April 16. Oped contributor Luis Rubio writes: Mexico ‘should be willing to commit to a broad migratory arrangement whereby it would control the flows of future potential migrants moving from or through Mexico’s territory.’

Kevin Lamarque/Reuters

MEXICO CITY

The Mexican government cannot afford the luxury of ignoring what is happening on immigration reform in the big and powerful North. And yet, it has taken a passive attitude. There are good historical reasons for this, but not a good one today.

Within the Mexican government as well as in Mexican society at large there are two clearly differentiated positions vis-à-vis the immigration debate in the United States. Some people consider the migratory theme an internal matter of the US and some consider it a matter of national interest for Mexico. The former would prefer to put on blinders; the latter would embark upon a crusade. Each has relevant arguments to support their claim.

OPINION: 3 views on how US should combat illegal immigration

Those who would rather stay aloof believe that immigration is a domestic issue because it involves what is most essential to any nation: the composition of its society. A sovereign government has the authority to decide on the legal treatment of people that may have violated its laws at the very instant of entering the country or when overstaying the time permitted on an entry stamp. Those taking this position do not want to tell the US what to do because they don’t want the US to tell Mexico what it should do on this or other hot topics.

Then there are those who see the other side of the coin. More than 10 percent of the country’s population lives outside of Mexico, the vast majority of them (97 percent) in the US. This constituency is directly linked with a large part of the population (siblings, parents, children) back in Mexico. In some Mexican states, those connections represent more than half of the total number of its inhabitants. The government cannot ignore the obvious. Whatever decision the US ends up making on immigration, Mexico and Mexicans will be greatly affected. Hence, as much as the government might wish to lie low, this debate concerns vital matters that cannot be skirted.

As a result, Mexico’s government seems to be straddling both views. On the one hand, the government is preparing Mexican consulates (a network of 51 offices directly linked to Mexican communities in the US, including Puerto Rico) to inform those potentially affected of the possible legal changes – and of their rights. Second, it is actively stating its position and preferences and, most likely, proposals that would help control future flows of workers in exchange for a broad liberalization for those already in the US. Finally, it is preparing to work with communities that are most affected by migrants in order to allay fears and advance its own perspective on the matter.

A decade ago, Mexico’s government went out on a limb trying to advance legalization of those Mexicans working without papers in the US. Although there are disputes as to how advanced that process was, the fact is that September 11, 2001 ended all discussions and the then-Mexican president, Vicente Fox, was left with nothing to show for his efforts.

The current government wants neither to bet its success on decisions made in another country, nor to exert undue influence on the political process of a sovereign nation. In between these two positions, it is attempting to find a way to be a partner in the solution of a problem rather than the cause of one.

Mexico’s government needs to make the case that migrants move North because there is demand for their labor there. Since there is no welfare or unemployment support for this cohort, people go when there are opportunities. There have been no work opportunities in the last few years and, therefore, potential migrants have stayed home. If Mexico’s economy continues to improve, there will come a time when no Mexicans will move North. By the same token, as long as there is demand for low-skilled workers, they will continue flowing from Mexico or other nations. For the immigration reform to be successful, this reality needs to be incorporated into the new law.

OPINION: Immigration reform needs flexibility on work visas

As the Mexican economy attempts to create the foundations for a strong economic-growth era, the interest of the Mexican government is for Mexicans already in the US to secure a decent life. If that is secured as part of the US immigration-reform process, Mexico should be willing to commit to a broad migratory arrangement whereby it would control the flows of future potential migrants from or through Mexico’s territory, whether they be Mexicans or other nationalities.

Mexico’s government has never attempted to manage or hinder the flows of Mexican migrants to the US, considering that it is the constitutional right of any citizen to move about unimpeded. Committing to a change in this policy would entail a radical departure from Mexico’s history as well as establish a transcendent legal precedent. The government would also be committing to stem flows not only from countries that are of concern to the US – Middle Eastern and the like, which it has controlled at least since 2001 (several Mexican immigration jails are full of migrants from all continents) – but also from Central American nations that do not constitute a security threat for the United States.

If Mexico commits to stemming immigration flows to the US, it could become a major source of stability for the immigration policy that the US decides to adopt. In fact, it could help the US establish a more rational and realistic mechanism to regulate migratory flows, just as other nations, such as Canada and Australia, do.

Luis Rubio is chairman of CIDAC, Center of Research for Development, a think tank in Mexico Cityand a writer of more than 40 books on Mexican politics and economics. He writes a weekly column for Mexico’s Reforma newspaper.

http://www.csmonitor.com/Commentary/Opinion/2013/0417/Mexico-should-take-a-more-active-stance-on-US-immigration-reform?nav=87-frontpage-entryCommentary