Mexican society has experienced phenomenal change and has achieved the feat of becoming majority middle class. Felipe Calderón understood the untdelying dynamic in 2006 and that’s the reason why he was able to beat López Obrador. The inherent revolution in this transformation is staggering and its implications –economic and political- extraordinary.

The concept of middle class is difficult to establish and complex to grasp, but is nonetheless real and, above all, politically relevant. For those employing the term “social classes” from a Marxist perspective (proprietors of the means of production or exploiters vs. the workers, the exploited), the notion of middle classes is to a great degree repugnant. However, practically all modern societies, and assuredly all developed societies, possess a common characteristic, one that is independent of their activity or employment: the majority of their populations earn sufficient incomes to be able to live in an urban society, desire to improve their position in a systematic manner, and do not want to risk their accomplishments.

In a book titled “Clasemedieros: poor no more, developed not yet”, Luis de la Calle and I argue that beyond income, what defines the middle class is an attitude. A person or family is middle class when they have achieved a minimum of economic independence to do more than survive. The designation “middle class” includes persons exercising a profession, bureaucrats, employees, and academics, all of whom enjoy sufficient family income to cover their living expenses. Evidently, these elements are very general, occasionally contradictory, and of little use as a base for a definitive description. Additionally, on occasion, the definition of “middle class” derives from income levels, in others, from education, or in yet others, from an individual’s type of employment. Surveyors of public opinion utilize the terms to refer nearly always to values and attitudes: those who own their own home; possess an automobile; perceive a job as permanent, and consume (or aspire to consume) a certain variety of goods. In the U.S., for example, middle classes are usually defined as those with an annual income of between $25,000 and $100,000 USD, which would include up to 75% of its population.

In Mexico, there are no conventional and across-the board definitions for what constitutes the middle class, but there is, no doubt, a growing segment of the population that shares many of the elements defined by the term. More importantly, if indeed the 2006 presidential elections proved anything, it is that a very significant part of the population deems itself to be middle class and is bent on protecting this status. This fact, that of having a sense of ownership, belonging, and the right to preserve this, was indubitably a defining factor in the most recently held presidential election in Mexico.

In fact, the history of the 2006 elections briefs us on the extent to which the country has changed. According to diverse probes, the population perceiving fewer than nine minimum salaries of family income, in addition to those with more than fifteen minimum family-income salaries, decided on their vote relatively early in the electoral process and changed little over the subsequent months. The population in the middle, those with a family income of between nine and fifteen minimum salaries, vacillated throughout the process and, in the majority, ended up favoring Felipe Calderón, thus constituting the election’s deciding vote.

According to a expert pollster, this population that modified their vote at diverse moments is characterized by the following elements, i.e., that over the past several years, it has been able to purchase a house, has nearly maxed-out their credit cards, understands that the future of their children depends on their achieving computer expertise, attaining high educational levels, and speaking other languages, has an automobile, and aspires to raise their consumption level systematically. Evidently, this concept of middle class is very elastic and can include, under this heading, persons who barely obtained satisfaction of the minimal conditions (perhaps the majority of whom are found within the range of nine to fifteen minimum wages) and those  at risk of losing what they gained, as well as relatively comfortable persons, who face no such risk.

The lesson of the last presidential contest is that the most politically relevant sector of society today is the middle class. It would not be exaggerated to affirm that the traditional political bases, mostly unions, are no longer decisive in electoral terms, maybe not even relevant, and that only those potential leaders capable of understanding and exploiting this dynamic would be able to win the presidency. Despite the apparent paralysis, the country is clearly changing swiftly, bringing up new realities that neither the political discourse nor the political experts have grasped.

Mexico is becoming a mainly middle class country. Urban traffic is perhaps the most apparent indicator of the transformation that the country has experienced, but the signposts that demonstrate this middle-classedness are many and very diverse: occupational type; housing sales; their children’s educational level; the proportion of women in the work force; the quality of the dwelling; the purchase of insurance; type of hospitals, movie theaters, tourism, universities, etc., etc. Certainly, the fact that the majority of the population could be grouped in this middle-class category does not deny the social problematic of the country, nor does it diminish the poverty and marginality that characterize a great number of Mexicans, but it does evidence the fact that the country is moving in a desirable direction.

The big question for the nation’s future inquires, with enormous political, social, and economic and, doubtlessly, electoral implications, how to accelerate transformation of the Mexican society with the purpose of guaranteeing the achievements of this incipient middle class, and at the same time, how to added to it an ever greater number of families found below this definition. Ten years ago, a modest regulatory change made it possible for several million Mexican families to have access to mortgages and, thus to their first-ever own home. This was the first step into turning Mexican society into a middle class one. If such an apparently minor change had such a major impact, one can only wonder what a change in the labor and tax laws could do. The implications of this transformation are unfathomable.

An anecdote relates that Talleyrand, the great French statesman, took refuge in his home while Paris burned as a result of the disturbances ending with Louis Philippe on the throne. At long last, after three days, bells were heard, to which Talleyrand exclaimed “Ah, good, we are winning”, at which one intrepid assistant asked him: “Monseigneur, who is winning?” “Don’t say a word. I’ll tell you tomorrow”, he replied, with a half smile. We Mexicans observe, with an aftertaste of contempt and envy, the way in which Brazil has begun to sprout forth and, apparently, to transform itself into a mid-sized world power. But it is not obvious that it is going to win; much less obvious is that we may not be able to be winners like they appear to be today.

The facts speak for themselves: Brazil took off in the last decade. Its growth rate has been various percentage points superior to ours and, if we were to project its ascending rhythm in time, Brazil would have the opportunity of transforming itself into a full-fledged developed nation in a relatively brief amount of time. Many have attempted to explain what it is that has created this opportunity in Brazil, and what is lacking for Mexico to procure a similar track record. What is interesting is that the analytical comparisons that have been conducted do not cast sufficient light on what has happened in that nation with respect to ours.

México Evalúa, a public policy studies center, recently carried out a study entitled “Mexico and Brazil: Convergences and Divergences”*. The study compares all of the elements that economists have determined to be key: public finances; economic achievement; productivity; balance of payments (BOP); and the financial sector. In each instance, its objective was to understand where the differences lie so as to extract conclusions for public policy. Under some headings, we are better than they, and under others, worse: for example, productivity grows more rapidly there, but human capital is more developed here. The interesting aspect is that the study concludes with what we all know: that, although some things remain to be done (diverse reforms), the same is true in Brazil. Or, in other words, that in objective terms, the Brazilian reality is not very distinct from our own. This begs the question: If these “objective” factors are not the ones that explain the differences, which are those that do?

The Brazilian experience demonstrates that laws and reforms do not comprise the difference, although these are necessary, but rather, clarity of purpose and  ironclad implementation of the latter. This implies, first, the political decision to devote the necessary force and resources to the attainment of the objective. In Brazil, they have had effective leadership, continuity of public policies, and clarity of course. It turns out that these elements are as, or more, important than those that are strictly quantitative.

What is relevant in studying Brazil (and, with all of its differences, China) lies in that it puts into perspective what is key for achieving a substantive improvement in economic performance. The crucial factors that differentiate Brazil from Mexico do not reside in specific reforms (although that is certainly part of it), but instead, in the conditions that its governments have created to make growth possible. Brazil began its reforms a little after we did, in the mid-nineties, but it has enjoyed an extraordinary privilege: continuity. President Cardoso initiated a reform process very similar to that which began in the late eighties in Mexico, and he sustained it throughout his eight years in office. Despite his radical origin and to everyone’s surprise, the president who succeeded him, Lula da Silva, not only continued along exactly the same route launched by Cardoso, but he accelerated the pace. Additionally, Lula showed himself to be an exceptional leader, capable of conferring certainty and a clear sense of direction upon the poor as well as on the rich, on urban dwellers and on those in the countryside. More than specific reforms, Cardoso and Lula accomplished giving Brazilians confidence in themselves and in the future. These are extraordinary achievements that stand in dramatic contrast to the pessimism that predominates in the Mexican scenario. Sixteen years of continuity afforded Brazil a development platform, which we have not had.

In addition to continuity, Brazil has benefited from two other circumstances that differentiate it from us. The first was the care that its elected officials took in implementing the reforms. For example, learning from the Mexican experience, they privatized their telecommunications so that that there would be much greater market flexibility and competition, in addition to making it impossible, from the outset, for a sole player to dominate the market. Soon thereafter, telecommunications became the most dynamic sector of the Brazilian economy. The other circumstance is called China. Brazil was exceptionally positioned to take advantage of the Chinese boom: as producer of foodstuffs, raw materials, and mining products, Brazil had become one of the main suppliers of inputs for the extraordinary growth of China’s economy. The sum of a good and clear development strategy and a literally infinite source, at least to date, of external financing made this small Brazilian miracle possible.

The Brazilian take-off would not have been possible without the Brazilians themselves. Public officials have assumed their responsibility, entrepreneurs invest in and wager on the future development, and all of this creates an environment in which the population shares in the enthusiasm, generating an attitude change that is simply absent in Mexico. Part of this without doubt is imprinted in the Brazilian DNA, but part also is the product of the virtuous circles that have begun to come to fruition.

The contrast with Mexico is sizeable. Here, we have become accustomed to mediocrity, to the philosophy that “it can’t be done”, and to the dependence that we inherited from the old system. As Hugo García-Michel says, “the PRI got out of Los Pinos, but not out of the soul of Mexico.” The true difference with Brazilians lies here: the citizens of that country feel free, and their government has created for them the conditions conducive for them to develop themselves. The combination has been explosive, freeing up power and resources in extraordinary fashion. While we continue to accept mediocrity, we will continue to be peons, instruments in the process of preserving the old system that benefits the status quo and that, consequently, renders long-term development  fimpossible.

http://www.mexicoevalua.org/descargables/9dd557_20100709_FINAL_Mexico-versus-Brasil_.pdf

www.cidac.org

                                                                                  by Luis Rubio

Mexico has never had a fully-fledged citizenry, at least not thus far in the waning XXth century.  Yet the possibility of citizenship will come closer than ever before at the dawn of the XXIrst.   Not because the PRI will change its ways, or some other party might reach power at the federal level.  The reason everything is bound to change is that information is becoming increasingly available to all Mexicans.  While this information might lead to the destruction of our country, as in a sense is happening in the former Soviet Union, it could also help us build a dynamic, democratic and highly prosperous country.  The outcome will depend essentially on our capacity to use information intelligently.

To build a country of and for its citizens is far more difficult than it might seem.  We Mexicans have been the object of all sorts of theories, systems and studies.  But we have never been citizens–that is, people with full political rights and a legal system able to afford us protection from the abuse of authority and promote the settlement of disputes among individuals, or between individuals and the state.  The political stability our country enjoyed for decades was at the expense of these citizens’ rights.  Whether this was an acceptable trade-off is a matter of personal judgment.  Did political stability make up for our lack of rights?

Different people will have different answers to this.  Two facts, however, are indisputable.  First of all, the political system organized around the PRI was a response to the nation’s post-revolutionary reality.  It reflected the lack of political institutions, the ubiquitousness of social and political conflict, and the failure of successive governments after 1910 to stabilize the country and generate a climate favorable to economic development.  Independently of the evils which accompanied the post-revolutionary political system, it responded to a genuine national reality.  In the second place, this political system–whether good or bad, effective or not–is now coming to an end.  No one knows how the process will play itself out, or how violent it will be, but very few can doubt that the political system dominated by the PRI is more a thing of the past than of the present or future.

The only doubt lies in how, not if, the political system will change–for the transformation is already underway.  Together with this process of political change, another one is taking shape–and it is far more profound.  Mexico is now in the grip of an information revolution like that which has already swept through several other countries, beginning with the former Soviet Union.  Information has become the key to productive activity.  It serves as a channel for ideas, products, the production and distribution of goods and services and, in many ways, for life itself.  Access to information is changing labor relations, productive relations and, obviously, political relations.  The latter will be the main focus of this essay.

The context of change.

The transformation underway in Mexico is part of a generalized revolution throughout the world.  The latter stems in part from the evolution of the global economy, new ways of producing and distributing goods and, especially, changes in the field of communications.  But perhaps the deepest change is taking place in the daily life of all Mexicans, who have gradually seen alterations in the way even the simplest things are done.  In 1987, the historian Paul Kennedy described in his controversial book The Rise and Fall of the Great Powers a process similar to what is happening in Mexico today:  “. . . there exists a dynamic for change, driven chiefly by economic and technological developments, which then impact upon social structures, political systems, military power, and the position of individual states and empires.”[1][1]  In Kennedy’s view, the changes that take place in the world through time are not produced by individual decisions, but by social processes which end up transforming everything.

What is most striking about the change currently sweeping the world, and which Mexico cannot escape, is its speed.  In recent years, we Mexicans have been waging a futile war to determine the guilt or innocence of our current rulers in causing our latest crisis.  Over and beyond any specific errors or possible conspiracies to plunder or dominate the country, the fact is that we have spent more than a decade seeking a new philosopher’s stone, without any maps or blueprints to guide us.  Leonid Batkin, a historian from the former Soviet Union (a country which has undergone a similar process), once compared Gorbachov to an apocryphal old man who, it was said, flushed his toilet at the precise moment of the Tashkent earthquake in the mid-eighties.  As he escaped the ruins and observed the desolation wrought by the earthquake, the old man exclaimed, “If I had known this was going to happen, I would never have flushed the toilet.”[2][2]

This analogy is as unfair as a bad political joke–yet many Mexicans, like the Russians in Batkin’s tale, will recognize in it a deeper truth:  what has happened in Mexico is very different from what our last three governments either sought or intended.  None of our leaders, since Miguel de la Madrid, planned on lurching from crisis to crisis; nor did they deliberately bring about the debacle which has afflicted countless Mexican families and companies in recent years.  If anything, the economic reforms undertaken since the mid-eighties pursued very modest goals.  They attempted only to bolster Mexico’s traditional political structures, not to weaken or destroy them, while revitalizing the economy in order to renew the legitimacy of the government and the system as a whole.

One of the most logical reasons why a far-reaching political reform was never undertaken was precisely that the original, essential goal of the economic reforms was to maintain the status quo–not to change it.  The government assumed that, once the recession attributed to the excessive indebtedness left by Echeverría and López Portillo was corrected, the country would return to its old and familiar ways.  The authorities recognized that the world was changing, which was why the economy had to be reformed; but they never understood that economic transformation would necessarily lead to political changes, as well.  Thus, far beyond the personal leanings of each president, the fact is that none of them acknowledged political change as an indispensable and unavoidable element during this phase of world history–and especially not as an inescapable corollary to the economic reforms they themselves promoted.  Perhaps ironically, the stubbornness with which they refused to engage the country in a process of political change was one of the reasons why the economy finally foundered, with the consequences now known to all.

The situation in Mexico, since the economic reforms initiated in the mid-eighties, has proven very different indeed from what was originally intended.  No leader in his five senses would have planned the political and economic crisis which has overtaken the country.  But the government’s reactions have faithfully reflected the underlying problem.   Our last three presidents have at times presented themselves as champions of change and democracy, eminently flexible and ready to take the world by assault; at others, they have acted as worthy offspring of the authoritarian system they affected to transform.  In reality, the great problem facing economic reform in recent years is that it has confronted successive governments with forces they do not understand; which change at dizzying speed, and over which (perhaps most importantly) they have no control.  The governments of Mexico have devoted their energies to taming a beast they do not understand, using criteria and techniques derived from our idiosyncratic political system.  The results are there for all to see.

Not everything that has happened in the last decade is to be criticized.  Indeed, most of what was done was not only appropriate but resoundingly successful.  Perhaps the greatest difficulty in these years, that which has caused the most damage, lies in what was not done.  If one observes the changing structure of the economy, there is no doubt that these governments have succeeded in promoting the development of a highly efficient and productive export industry.  Despite its current problems, Mexico’s road network has more than doubled; telecommunications have given us all the tools we need, at the threshold of the 21st century, to make a huge leap forward.  The positive effects of the reforms in recent years are everywhere to be seen.  Yet we cannot help but observe, at the same time, that other part of Mexican society which has fallen behind; which has not been able to climb aboard the train of economic change; which has indeed been a victim, rather than a beneficiary, of change.  Of course, this was largely inevitable within a transformation as ambitious and misguided as the one we have experienced.  But much of the damage could have been avoided if we had had a government–or rather, a political system–more responsive, more responsible, and effectively obliged to serve the citizens of Mexico.

It is the Mexican political system, with its lack of representation, its lack of checks and balances, its impunity, which has caused our recurrent crises.  Recent governments have unquestionably had the technical and political competence to carry out their plans.  What they did not have was the obligation to consider the effects of their actions.  If they had been so obliged, they would have corrected many of their mistakes or excesses in due time, thus avoiding many of the crises which have befallen us.  The problem has not been (as many have stubbornly proclaimed) excessive liberalization, or its lack of fairness, or NAFTA, or the privatization process.  The problem, rather, is that all these innovations were imposed artificially upon a social and political structure which there was no attempt to change, thus sealing their fate.  In economic terms, the authorities took the path of least resistance, that offered by large companies which could act and react the most quickly.  In the political arena, they sought to maintain existing structures.  And in social terms, they tried to mitigate the worst extremes of poverty.  In no case, however, did they contemplate–nor have they contemplated–the need to transform those political structures which hamper the liberalization of the economy, block people’s access to social and political development and, in sum, inhibit the country’s development.  Without this political change, to pretend that we live within the rule of law is just another fantasy, along with all the others that have appeared and prospered since the notion of reform was first launched during the eighties.

The world before us.

Leaders and politicians can prepare Mexico for the change that is almost upon us, or they can leave us to face the coming storm without defense.  What they cannot do is keep it away, for the same reasons that they have not been able to tame the economy:  these are changes beyond their control or their power to influence.  What they can do, however, is to continue harming the population, and prevent us from preparing for–and using to our advantage–the changes that even now loom large upon the nation’s horizon.

The world is increasingly linked by electronic networks bearing data, news, information, words, ideas and opinions at the speed of sound, throughout the planet.  The information flowing through these networks can be good or bad, true or false, but it is increasingly available to a growing portion of the world’s population.  Information and its availability are changing the way the world functions, the relations between governments and those they govern, among different governments, businesses, and the government agencies meant to regulate them.  In the process, it has opened the door to a citizens’ development hardly seen since the dawn of the Industrial Revolution at the end of the XVIIIth century.

The information era might seem remote to a relatively poor country, with as many shortcomings as ours–a country in which the only part of the economy which seems to be successful is its export industry.  In fact, most if not all of that successful economy is a combination of industry (as we now know it) and information.  Factories produce according to plans, processes and controls established by computer networks; the goods they make go to markets in which distribution, payment and delivery are fully integrated and operated by computers.  In this sense, the information economy is just as real in Mexico as anywhere else in the world.  Indeed, it is enough to see how rural inhabitants in the states of Michoacán, Oaxaca or Zacatecas use e-mail to communicate with their relatives “on the other side,” to realize that the information era has arrived in our country, to a far greater extent than many believe.

The mere fact of using e-mail or a computer seems but a slight technological advance.  This will change, however, sooner or later.  Revolutions occur when people realize that there is an alternative to the way they live.  This can happen in an instant or take a lifetime–but when it does, everything changes overnight.  Our government’s control of information, decades throughout, kept most Mexicans from having that perception of alternatives.  Today, however, access to information through the Internet, satellite television, radio and other means requires only the decision to use it.  Taken to its last consequences, this process is inevitably leading to an integration of political fields; the news generated in any one place soon will become news everywhere else.  Government’s ability to deceive citizens will be drastically reduced.  In this context, the options open to governments will be simplified:  either they give their populations the means to ensure that each individual is free and productive, or else they will condemn their countries to poverty.  Mexicans are no different from citizens anywhere else:  they recognize freedom as a universal value.  As they become more free thanks to the availability of information, they will compare their living standards to those of people elsewhere, and will demand that their rights be respected by local caciques and political bosses.  They will demand better conditions to work, to start a company and, in general terms, to lead their lives.  Ultimately, they will demand a change in the relations of power.

Power and information.

Control over information has always been one of the principal bulwarks of power.  Communications and the capacity to process information, two technologies now spreading through Mexico at the speed of sound, are changing the country’s political reality.  Before, information could be hoarded and hidden; now, the essence of the revolution implied by these technologies is precisely the opposite:  communications serve to decentralize power insofar as they decentralize knowledge and information.  It matters little whether this process involves the central bank’s hard-currency reserves, the location of mineral resources, or the way houses are built.  The fact is that the new technologies make all of this information available to whomever wants it.  When there are no more secrets, information ceases to be a source of power.

Needless to say, few governments or politicians relish the idea that information about their actions should be increasingly public.  In some areas, ordinary Mexicans now have just as much information as any government official.  For instance, since the chaos of late 1994, the government has posted all the figures for international reserves, other balance-of-payment and Banco de México data on the Internet, week by week.  This means that everything the government does is analyzed in detail by thousands of observers throughout Mexico and the world.  What the politicians say no longer counts; what matters now is what the market says.  This will also begin to happen in other areas, far less suited to the widespread broadcasting of information, such as debates within the government on its course of action at particular times.  What was once reserved to our local Kremlinologists is increasingly open to public debate.  There is no other explanation for the fact that weekly magazines such as Proceso, or dailies like Reforma, receive supposedly private documents revealing to all what is happening within the government.  Obviously, whoever transmits these documents to the media does so with a personal political agenda; this creates a problem because only part of the information is made available.  Yet this process is nonetheless extending our access to information:  at a time when the most costly and scarce commodity is government credibility, public opinion is increasingly the battlefield which must be conquered.  If one side publishes its own position or account of events, the other will do so as well, sooner or later.   And when this happens, the balance of power will begin shifting toward the citizenry.

Two hundred years ago, the steam engine helped revolutionize production throughout the world.  Today, anybody can produce industrial goods; the technology to do so is widely available.  Just as the steam engine was revolutionary when it first appeared, now it is the knowledge of commonly used technologies that can generate larger added value and thus greater wealth.  Insofar as the principal resource for development–knowledge–is no longer material, all the economic doctrines, social structures and political systems which were developed in a world designed to make things in fixed places, with large work forces and under easily controllable conditions, are now obsolete.  The age of information requires flexibility, creativity and freedom–qualities hardly compatible with rigid structures such as those usually associated with caciques, labor unions, political control and bureaucratic imposition.

The clearest example of a clash between these two world views and realities took place in the former Soviet Union.  An anecdote told by Gorbachev is extremely revealing.  When he was the right-hand man of Secretary-General Andropov, and thus a member of the Politburo with access to the system’s secrets, he asked his boss for information on Soviet military spending.  Not only did Andropov turn him down, he indignantly insulted Gorbachev, stating that he was too young to know such things.[3]  Control over information, even for the regime’s highest officials, was so excessive that it eventually doomed the entire nation.  A superpower like the USSR ended up depending on traditional industries such as gas, gold, petroleum and arms, which were losing their global value and pre-eminence relative to an increasingly valuable resource:  knowledge, in which the USSR had failed to invest time, effort or money due to its retrograde political prejudices.

The reason why the Soviet government did not invest in developing technologies based on knowledge is clear:  the free flow of information implies liberating not only data and statistics, but also people and money, books and newspapers; it multiplies the access to new ideas.  There can be nothing more subversive.  The post-revolutionary regime in Mexico finally recognized that it could not control information, despite the wishes of many politicians who were closer to the Soviet notion of democracy than to its European version.  The solution, which lasted successfully for decades, was to allow access to information only to those who could get it for themselves.  The authorities did not prohibit people from travelling or reading foreign magazines–they knew that only a tiny fraction of the population could do so.  Some analysts have blamed that fraction of the population for the exchange crises of 1976 and 1982, leading one former president to launch a (futile) campaign against “bad Mexicans.” [4]  In reality, those few Mexicans were the only ones with access to some semblance of information and a perception of alternatives; this is what led them to act as they did.  In other words, these were the first instances where citizens put limits on the government’s behavior.  All this has now changed, thanks to the advent of the information era.  Information is now accessible to whomever wants it, even in the most remote villages.  Sooner rather than later, that portion of the population able to limit government action will multiply like grains of sand in the sea.

The global economy in the age of information.

The wonderful thing about this era is that nobody can control it.  The world is rapidly heading into a time of greater economic integration, which will tend to undermine political control and even sovereignty.  More and more Mexicans will in effect be incorporated into the world economy, either directly or indirectly, competing to produce goods and services with their counterparts in Taiwan, Thailand or Brazil.  These Mexicans will be better able to choose between different options, and will impose a new logic on the work of government.  All governments–Mexican or not–will have to concentrate on attracting investment, savings, persons and companies with technology (whether Mexican or foreign), instead of pretending that they can merely direct them.

All of this is far more important than meets the eye.  It might seem obvious that a computer engineer should become a top-notch developer of software, able to compete with the best in the world.  But this also applies to any peasant, no matter how isolated.  Access to a telephone network, for instance, can allow peasants to find out current prices paid for their crops.  This means they will be on an equal footing with wholesale producers, as they will have access to the same information.  This in turn will sharply reduce the possibility of abuse on the part of local caciques, or their institutional equivalents such as Mexico’s state-run Conasupo retail chain.  Such was the case in Sri Lanka:  after telephone lines were installed in rural areas, peasants were able to increase their income by over fifty percent, thanks to their newfound access to information. [5] The liberation implicit in the age of information applies to everybody.

Those who participate fully in the information economy will be its greatest beneficiaries.  The growing international network will incorporate not only economic and professional interests; its members will also gradually acquire similar tastes, opinions and other commonalities, with obvious political implications for each of the countries involved.  It is being debated in many nations whether this will be a good thing or not.  One may argue on either side of the question; but the debate itself is futile and fallacious, as can be seen in Mexico today.  Clearly, those who participate in the information economy, seeking to generate added value at the production level, tend to have larger incomes and concomitant benefits.  Those who are not in the loop tend to lose ground, comparatively speaking.  But the alternative is not to enter the modern economy, or else concentrate on the old one, which includes most of the population.  Put in those terms, the choice is a false one–simply because the old economy has no future.  Based on low added value and products that nobody wants or needs, it will continue to lose its relative position and thus its capacity to employ and pay its workers.  Those who choose this alternative do so only in pursuit of political objectives, independently of the population’s real needs or the global situation.  To deny the modern economy is to close our eyes to our surroundings; to opt for a different scheme of things, nothing more than an illusion.  The only realistic solution is to do whatever is necessary and possible to transform current economic and political structures, so as to promote small- and medium-sized industries able to compete on an international scale.

Major public-policy decisions are required to modernize a backward economy, for this implies making basic changes in the political and economic status quo.  In the short term, that part of the population which is outside the information economy must receive direct assistance in the form of training programs.  Traditional occupations–ranging from cleaning jobs to highly manual industries–must be redesigned, in order to boost productivity and workers’ potential earnings.  Short-term solutions seek only to solve the population’s immediate problems, while making adjustments for those unprepared for the new economy.  But long-term solutions require more radical measures, both for today’s children (who need an education very different from that of their parents), and for adults both present and future who must be given access to the new world of production.

The model implicitly adopted by the Mexican government when it launched its economic reform in the mid-eighties involved backing the country’s largest companies, so they would spearhead the process of economic and industrial transformation.  That priority was perhaps reasonable at the time.  A radical shift was needed, to boost exports quickly and promote new industrial investment.  In retrospect, the success of the automobile sector, for example, which has generated a highly competitive parts industry on a global scale, suggests that the strategy was indeed appropriate within that context.  However, it was taken to an absurd extreme, promoting a savage concentration of property and wealth in the hands of privatized companies.  More importantly, the industrial structure designed by the government not only failed to support, but actively undermined the development of small and medium companies and their access to domestic and international markets.  The industrial model implicitly adopted by the government–then and now–thus excluded four fifths of the country’s businesses, while foreclosing any real possibility for new companies to lead the way into the future. The problem was never NAFTA or the liberalization of the economy, but the government’s insistence on creating a plutocracy instead of spreading the wealth among thousands or millions of entrepreneurs.

The dilemma of information and citizenship.

The implicit freedom of this new age raises new problems.  As a Russian once said, it is possible for a country’s entire population to know that it is being lied to without, however, knowing the truth.  Both the Soviet and the PRI systems were built upon a series of myths and beliefs which obscured reality and made it increasingly difficult to separate myth from reality, bias from analysis.  In this context, political manipulation is always possible.  The problem lies in breaking the underlying vicious cycle.  Greater access to information does not necessarily ensure the best, or even a better, use of that information.  Nobody can tell another person how to use information–but the tools for using it are essential to future development, and are thus a central concern of public policy.

Information access and control have been the object of countless discussions, books and novels.  Perhaps the best known, George Orwell’s 1984, argued that electronic technology would inevitably increase government’s power over citizens.  However the Soviet experience, upon which Orwell based his novel, eventually proved him wrong.  Access to information finally broke the chains that had bound dozens of nationalities, religions and countries to the former USSR.  Clearly, information can be an agent of liberation, promoting citizen development and setting limits on government.  But there is another side to the coin which we must also take into account, especially in Mexico.  The sudden availability of information subverted the totalitarian power of the Soviet government in large part because it allowed growing sectors of the population to perceive the realities of the regime, its violence and falsehood.  All of this destroyed the government’s legitimacy and made possible its subsequent fall.  Information turned out to be a potent weapon of destruction, which proved incapable of providing a substitute for the previous order of things.  Even worse, it helped release a renewed wave of chauvinism, extremism, radicalism and violence.  In this sense, the means of communication which promote the arrival and spread of information are only channels; the information itself is produced by the users of those means.

Much of the criticism aimed at magazines like Proceso and newspapers like Reforma by business leaders and virtually all government officials, in the sense that they distort information or behave irresponsibly, falls precisely under this heading.  On the one hand, the availability of information clearly alters the status quo by publicizing cases of abuse or corruption, thus affecting particular interests.  On the other, the sensationalism which always accompanies such revelations can also provide a cover for falsehoods, biases and prejudices, causing undue harm to individuals or companies.  This other side of information has important implications for two central issues which will surely dominate the country’s short-term political development or involution:  the actions of government, and the responsibilities of citizens.

Public policy:  can the government change?

The grand dream of central planning, which never did much more than make rhetorical waves in our reality while leading the authorities into costly para-state activities which no sane government would ever undertake, is still alive and well in our leaders’ thinking.  The mentality of the accountant who decided not to build a new bridge because the ferry still had room, continues to permeate government decisions.  Our leaders are still trying to pretend that the economy of the nineties is no different from that of the seventies, and that the principles valid then are still so now.  Clearly, some premises must remain unchanged in the structure of an economy.  However, the advent of the information economy has overthrown all the criteria and premises held by economists for almost two centuries, since the Industrial Revolution.  The realities of today demand alternative approaches and new priorities.

Current realities require a government determined to create the conditions for two (and only two) things to occur:  it must ensure that individuals–especially children, as well as poor and marginalized people–can acquire the basic skills needed to engage the modern world.  That is, all educational and training programs, all subsidies, all social and health-care spending, must aim at the development of healthy children and the incorporation of poor and marginalized sectors into the mainstream of society.  In addition, there must be an infrastructure allowing business activity to develop free of any government or bureaucratic interference.  This can be done by developing the physical infrastructure, either directly or indirectly, as well as an independent juridical and judiciary system that is not subject to continual intervention and reform by the executive.  This will also involve defining and protecting property rights and developing an effective financial system, where the central criterion will be owners’ capacity to promote business growth and not their nationality.  Anything else would be counter-productive.

The government faces an extraordinary dilemma.  If it does not liberalize the structure of public-policy decision-making, boost political decentralization and support the rapid spread of information, the country’s economic development will founder.  If it does effect these changes, it risks political challenges like those confronting the Chinese government–challenges which have no easy solution.  To pretend that this quandary does not exist, and continue feeding the illusion or expectation that we are making progress because our macro-economic indicators show significant improvement, is a sign of blindness rather than vision.  A blindness not unlike that of the Albanian regime, which believed that all was well simply because nothing was moving.

Mexico’s dilemma is somewhat different.  For years, the government has pretended to know better than the people what is best for them.  Its leadership style, the Finance Ministry’s advertising campaigns, the scorn heaped upon any alternative political proposal–no matter how well-founded–all reflect the peculiar vision of a government which, despite some differences, has for twenty years enforced a series of intelligent and benevolent policies that lacked, however, the essence of good governance:  legitimacy.  What the government needs to do is not necessarily modify its policies; it needs to include the population in them.  This means changing its priorities.  Instead of preaching the rule of law, only to violate it whenever its own interests are at stake, the government must submit to the law.  Instead of ignoring the population, the government must include it.  Instead of placing itself above all Mexicans, it must join them.  Democracy is the most complex form of government; but it is far more lasting than our autocracy, which breaks down every six years.

Will citizens be able to deal with it all?

Information benefits and liberates citizens, first and foremost.  It can be, for them above all, a powerful lever for development.  Information changes people’s capacity to organize, take action, and become acquainted with competitors, adversaries and friends.  In political terms, information generates a vast web of potential relations with non-governmental organizations, political parties, national and foreign agencies and international pressure groups.  All of this enhances the potential power of any interest group, and serves to multiply and strengthen the institutional power of any agency or association.  It is enough to see Sebastián Guillen (aka subcomandante Marcos) and the Zapatista National Liberation Army on the Internet to observe the implications of this.  Likewise, contacts and cross-fertilization among political, ecological, human-rights and other groups accelerate differentiation within society, thus reinforcing the mechanisms needed for political stability.  It matters little what collective or personal interests are involved; the fact is that the availability of information and links to other groups and interests throughout the country and world open opportunities and means for participation that were previously unthinkable.  But this development will not necessarily lead to stability or political evolution.

As citizens increasingly take the ball and run with it (as the saying goes), the problems they face will change in nature.  It is one thing for an individual to acquire the knowledge or skills needed to enter the labor market, for instance, and quite another for that person to become a responsible citizen who is able and willing to fight for his rights within the institutional framework which is at the very core of citizenship.  In other words, to take the example of the peasant in Sri Lanka who almost doubled his crop prices after gaining access to a telephone line, the availability of information can also work in the opposite direction:  an abused child can also use the Internet to build an atomic bomb.  The difference lies in how each individual uses information–and this is a matter of personal responsibility.

As is obvious to all parents, nobody can make another person responsible.  Nobody can force a child to be responsible.  The education of children, like that of citizens, consists–or should consist–precisely of creating the conditions so that future citizens can understand their rights and obligations while making them effective.  Government cannot oblige anybody to be responsible–but it can, in contrast, encourage irresponsibility among the population.  It can also provide the incentives for it to become responsible.  When it is easier to get an appointment with a government minister by organizing a street demonstration than by calling his secretary, the population will resort to demonstrations.  In this case, the government is actively promoting citizen irresponsibility:  though people might act rationally in strictly political terms, they are not acting as citizens.

The dilemma of citizenship is very clear:   if it is to exist at all, it must be responsible.  And in order to be responsible, it must allow citizens to make full use of their rights.  One of these rights is that government should not arbitrarily change the laws at its convenience, or impose its decisions over and above society.  The idea, conceptually speaking, is very simple.  The problem for Mexico is how to implement it.  This dilemma will become increasingly apparent in daily life over the next few years, for purely demographic reasons.  An indication of things to come is that twenty years ago the “hard-core” or reliable PRI vote represented an unquestionable majority on the federal level.  Now it represents less than forty percent of the electorate.  In the next decade, its share will fall to half of that, at the most.  Before that happens, the country will have to learn how to function without the PRI.  It will have to create a trustworthy and respected legal system, able to ensure a peaceful transfer of power from party to party.  This will be possible only if the PRIístas establish a legal structure able to guarantee that they themselves will not be persecuted arbitrarily.  Members of other parties will also have to recognize the institutionality of the structure, so they won’t have the political or legal capacity to change it.  When that happens, Mexico will finally become a lawful country.  Nobody in Mexico can believe that that is the situation today.  That is why, either we prepare for the onslaught of information and competition, which implies making a lawful country, or we will go down to defeat.

–translated by Marina Castañeda

[1][1]Paul Kennedy, The Rise and Fall of the Great Powers (New York:  Vintage Books, 1989), p. 438.

[1][2]Quoted by Scott Shane, in Dismantling Utopia (Chicago:  Elephant Paperback, 1994), p. 5.

    [1][3]Ibid., p. 45.

    [1][4]Which has not prevented our recent fiscal legislation from reviving the notion, at least implicitly.

    [1][5]Walter Wriston, The Twilight of Sovereignty (New York:  Scribners, 1992), p. 41.

Something peculiar took place vis-à-vis the Bicentennial celebration: the government organized it, but the population appropriated it. The transcendence of the fact should perhaps not surprise anyone, but it speaks volumes about the Mexico of today, above all concerning the enormous potential for development that it has ahead of itself, but also concerning the quality of the governments that we have had and their inability to take hold of this potential and make it possible. It does not cease to be noteworthy that the celebration had been nearly a “tale of two cities”, two contrasting narratives –citizenry and elite circles- who do not communicate between themselves.

“The future”, wrote Will Durant, “never just happened. It was created”. But the government stemming from the PAN decided not to construct a future; rather, it concentrated on the celebration. There is nothing inherently wrong about having organized a magnificent spectacle with the exclusive objective of feting and celebrating, but it is odd that the PAN accepted the PRIist “official” history without further ado. At last count, the PAN was born as a response, a reaction, to the development of an official party, a virtual monopoly of public power. Its first manifestations were to reject the greed and excesses of the revolutionaries and to reclaim basic ideals. How strange it is for its own version of history to be absent.

Manuel Gómez-Morín, founder of the PAN, was not a man given to ideological passions. A prudent attorney, he was director of the Bank of Mexico and president of the UNAM: impossible to type-cast him in an ideological or political-party story line. His writings reveal a dedicated character, thoughtful, and profoundly nationalistic, who did not accept the dogmas of either the left or the right. His mantra was to contribute to the development of the country and to fight against the excesses of the official party and its agents. His decision to drive the creation of a new political party responded to the wish to debate the country’s core themes and to maintain an open dialog that was civic -citizen based- and intelligent in nature. Within this context, it is interesting to observe how the PAN abandoned its great patriots and relinquished the historical narrative.

In an excellent interview with Leonardo Curzio, historian Ilán Semo explained how the PRI took custody of the interpretation of history. Using the free government-sponsored (obligatory) textbooks, the PRI developed an articulate historical narrative that neatly explained its view of the world, telling its version of things and denying all others. What is surprising is that, given its origin, the PAN accepted this narrative and silenced its own version, to the extent of not even mentioning, not to say utilizing, the dignified luminaries of the country’s history such as Gómez-Morín to vindicate itself. According to Semo, Mexico will only grow as a nation to the extent that the narratives of all groups and all members of our society acquire historical legitimacy and begin to communicate among themselves in order to share and build a much richer, and above all, less Manichean projection of the past. In this, the government waived the opportunity represented by the Bicentennial. In another hundred years there will be a new possibility…

But the marvelous part of the celebration was in the encounter between theories and critics and the mundane reality. While the government had neither vision nor perspective in its project, the population had not the least restraint in imposing theirs. For the ordinary Mexican, there was everything to celebrate and nothing to regret. The government put on an extraordinary spectacle that did nothing other than enkindle all the emotions and peoples’ expectations. In some places around the country, such as Monterrey, the population took to the streets to commandeer the great public square, to take as theirs the public space, to say “basta”, no more, to organized crime. In Mexico City, the population made it evident that “the streets are ours” and no one is going to take them away from us. For the population, there was no complication or contradiction: we are celebrating what we are and what we want to be. The intellectual arguments can be interesting, but they do not impede the feting and celebrating.

It is impossible to ignore the goodness inherent in the popular response. Governments –good or bad- come and go, but nothing changes the nature of, and the underpinning of, the meaning of being Mexican. The criminality of the recent decades has generated weighty divisions in our society, destroying the framework of minimal coexistence that is needed to construct a solid and integrated social structure. The fear of being the victim of criminal mafias that distinguish themselves by their violence, and above all, the cruelty in their modus operandi, has led to the breakdown in social relations and to the weakening, if not the extinction, of that crucial cohesive factor, trust, the key element for economic development. And, nonetheless, the nation’s patriotic fiestas disclosed a living people, disposed to and rich in manifestations of future yearning: to whom the grievances between politicians and parties are of no matter.

On watching the audiovisual spectacle and observing the popular manifestations, I reflected upon what would be possible to construct in a country with such great wealth, with such a desire to overcome and prevail, the disposition to defy not only authority, but also, the official version of history. The population exhibited no compunction or difficulty in acting what the PAN was incapable of doing with the PRIist account of Mexico’s history. The PAN ended up making the “official” narrative deriving from the textbooks its own, implicitly ceding not only its history, but also, going back to Durant, the future. But not so the population.

In all of this I ask myself how much would it have been possible to achieve had the government implemented a celebratory project oriented toward generating hope in a better future, hope in a better country, hope in defeating the common enemy, hope in constructing a promising future. Fox devoted himself to heightening expectations, not to constructing hope. A more tempered government, such as that of Calderón, held in its hands the possibility of giving hope to a populace avid for answers, desirous of opportunities, but turned it all down.

The numbers on criminality say much on how an important sector of the youth of the country has become unhinged. Theories proliferate on how and why this occurred, but the fact is that the phenomenon exists. It is evident that it is urgent to create conditions to raise the growth rates of the economy and employment in order to reduce the incentive for youth to incorporate itself into the crime mafias. But beyond the economy, the Bicentennial celebration demonstrated that the overwhelming majority refuses to surrender: it does not want to be part of the country that is a loser, and more than everything else, yearns for a very distinct world. With this attitude, and this population, Mexico could be another in the wink of an eye. If only the summons were issued.

www.cidac.org

“Abandon all hope, ye who enter here” reads Dante’s inscription above the gates of hell. Many Mexicans must feel like this: that history has betrayed them. Crises, leadership styles, and promises generate expectations and hopes, to wind up quashed in a sea of tears. Causes and circumstances change, but the result is the same: the Mexican feels victimized and believes that everyone owes him a living. In lieu of not resigning himself to and breaking with the vicious circles, the Mexican tends to cling fast to them, therefore losing all hope and possibility. The question is why.

The contrast with other cultures is striking. Avatars in the history in some Latin-American nations are not so distinct, but some countries achieve a split with the ties of the past, while others stay where they are. Independently of his activity frameset, the Mexican tends to be dependent: he wants someone else to solve his problems, the government to protect him and get him out of jams, a leader to work things out, or a perfectly-set, catch-all development project. There are excuses for everything, but few solutions.

The contrast with Brazilians is impressive: their governmental and regulatory system blocked them from progressing; as soon as they introduced appropriate, but far from perfect, reforms, their repressed creativity and ability blossomed forth and they now flex their muscle in entrepreneurial, technological, and industrial spheres. Beyond their recent successes, financed with the export of commodities and foodstuffs to China, the astounding contrast with the Mexican is their drive and willingness to take risks. While we Mexicans tend to see ourselves as victims, the Brazilians perceive themselves as a power in the offing, and see the world as theirs.

None of these observations are new. Samuel Ramos and Octavio Paz devoted their studies to explaining these phenomena and to analyzing the implications of our culture and way of being. Some historians attribute the origin of Mexican nationalism and the sense of victimization accompanying it to the 1847 U.S. invasion. Others explain it as due to the clash of cultures represented by the syncretism of the Conquest and the indigenous world. Yet others attribute the destruction of all individual initiative to the PRIist system and its cultural authoritarianism. Each of these perspectives explains or contributes to understanding the personality of the Mexican. What they do not tell us is whether it is possible to break the vicious circle, and if so, how.

What is certain is that, with all of our differences, poor nations that over the most recent decades have been able to break with underdevelopment entertain great similarities. What makes them alike is the transformation that they have experienced and the attitude with which they have opened up a world of opportunities to their respective populations.

Paraphrasing Tolstoy, it may perhaps be said that all successful nations resemble each other, while each unsuccessful nation is unsuccessful in its own way. Just as it is possible to attempt to elucidate the origin and causes of the personality and culture of the Mexican as brilliantly as these philosophers that I mention here have, I am sure that there are those who do the same for Argentine and Venezuela, Cuba and Nigeria. Explanations abound. What is lacking is some way to break with the gridlock in order to become successful.

An eager and well-experienced observer of our region affirms that the common denominator in nations that have achieved success is clear leadership that establishes a course and does not devote himself or herself to undermining it for his or her own interests. This way of seeing the world is exceedingly pragmatic, but entails enormous risks and leaves everything to the mercy of a savior. Our own experience throughout the past decades is suggestive: there have been very capable leaders who generated impressive expectations and gave hope to the population, only to end up ruining lives, estates, and families.

How, then, to break the vicious circle? Years back, in the 2000 electoral contest, I remember that one of the candidates declared that he was certain of what there was to do to solve the country’s problems. The first two elements on his list were a new constitution, and changing the Mexican. The prescription was simple.

Perhaps the least burdensome way to decipher the riddle is to analyze the unifying elements or common denominators of societies that have transformed themselves. Each successful nation has achieved the conferring of certitude on their populations. This is the true recipe for success. In the same way that the donkey was not born stubborn as a mule, but rather, reality made him so, people safeguard themselves and balk against any change because they are not sure of the future, and, on occasion, not even of the present. It suffices to see how entrepreneurial the Mexican is individually to perceive the immense potential.

Our daily life is a master of uncertainty. Straightforward observation of the quotidian event could stupefy even the most adroit among us. Let’s look at some recent examples: days ago, the Supreme Court ruled to deny the government’s commitment to provide pensions of up to 25 minimum salaries for Mexicans caught up in the transition between the old Mexican Institute of Social Security (IMSS) pension system and that of the Retirement Funds Administrators (Afores). In Chile, this money was submitted by means of a “bond of acknowledgment” the same day that the pension fund administrators (APs), the Chilean equivalent of Afores, were created. In Chile there is certitude; here, deceit.

A second example: in days past, the U.S. Federal Aeronautical Administration (FAA) downgraded the score of Civil Aeronautics services in Mexico, which, in addition to revealing serious procedural gaffes, positions us worldwide as pariahs. The government’s response: budgetary woes. There was not even an attempt to offer solutions, or an indication that the gravity of the problem is understood and that they intend to solve it. Something similar happened with the recent announcement that we have fallen dozens of places as foreign investment recipients. The transcendence of this fall from grace is monumental for the growth of the economy and for the generation of jobs. Notwithstanding this, there is no response or the proposal of a solution by the government or by the remainder of public powers: some self-satisfied; others resigned to the fact.

Certitude and credibility are perhaps the two most fundamental factors of a country’s success.  While these can be built by a great leader or a great institutional system, it takes decades for them to be sufficiently established in order for them to excel. To destroy them takes only an instant. Amidships in this rides the hope of every Mexican and the possibility of getting ahead. The bicentennial celebrations would have been an exceptional opportunity to build hope, but that would have required a visionary government.

www.cidac.org

In a visit to Mexico at the end of the eighties, the head of a delegation of businesspeople presented himself with a pithy phrase that left the audience cold:  “I introduce to you the new Chilean business community, because the old ones no longer exist”. In Mexico, it would be difficult to make such a statement. Although many businesses have closed in the past decades, what is impressive is the small number of companies that have risen as leaders and bellwethers in a competitive market. Could it be that we have gotten the priorities wrong here?

Many categorize the decision of the government to launch a “war against the narco” as foolhardy. This criticism is not very different from that which is mustered against European and North American governments with respect to the capitalization of banks at the beginning of the crisis. The truth is that, when confronted by a chaotic and threatening moment, decision-makers in the government do not have the benefit of the retrospective view: they have to act, and to do so in the best possible way. But there is no reason for this urgency in themes of development, which can only come into being as the product of a long-term plan that creates the conditions necessary to achieve it along the way.

This has not been our case. For years, financial crises earmarked the priority; what was important was to recover stability. Then came political change, and now we have a security crisis. Successive governments have suffered from a lack of clear, long term, vision. It is indispensable to resolve a crisis situation, but it is not a substitute for development. However, in Mexico we have become accustomed to resolving crises as if this were an end in itself: for example, having healthy public finances has become an objective in and of itself.  Fiscal equilibrium is a necessary condition for economic growth, but is not sufficient in itself. On occasion, above all if the manner of achieving this entails excessive costs, the means culminate in eradicating the end. The same can be said for public security: it is a means to accomplish a superior objective.

The government is indispensable for attaining development, not running businesses, but as a key factor of social organization. To use a soccer metaphor, Mariano Grondona affirms that “if there were no referee, a player like Maradona would kick all his goals in by hand”. The function of the government is to create conditions for growth to be possible, not for it to substitute for the society in the process. The government’s priority must be to construct means for development to come about, and this is of particular transcendence at present.

We are confronting a moment of global redefinition: today, it is recognized that many of the things and activities that economies, both developed and developing, were previously engaged in are no longer those that are suitable for sustaining the next stage of development. This redefinition originates under circumstances such as the recent financial crisis, global warming, and Chinese competition. The entire world is speculating on which industries will be relevant tomorrow, or on how governments should conduct themselves in order to generate prosperity. This has led to some governments becoming shareholders in banks and companies, but those that are generating far more interesting perspectives are those that promote qualitative, far-reaching transformations that achieve exactly the opposite: creating conditions for the establishment and development of new businesses and entrepreneurship feasible. For example, in Nordic countries, governments are advocating an escalation in the efficiency and productivity levels of their economies, facilitating the transition of enterprises that are no longer able to compete under the new circumstances to new opportunities of development and creating mechanisms for the establishment of technological companies characterized by high turnover.

While this is happening, we continue to be anchored to a paradigm that has been evidencing its impracticability for 40 years. Every country must finds its own way to be successful in this world, but the great lines are well-known by all: the key resides in adding value, raising productivity, and establishing rules of the game that work. In plain language, the latter means transforming the educational process so that people can develop their creativity; drastically improving the quality of the physical and human infrastructure; and creating a framework of rules that are clear and equitable.

What have we been doing in Mexico? Exactly the opposite: we have an educational system that becomes more retrograde daily; although there has been much investment in highways, the quality of the infrastructure and access to same become progressively worse, and in matters of rules, capriciousness is the norm. There is the absence of effective mechanisms for damage control and conflict resolution in contract disputes; in a word, arbitrariness. There is no way to create more and better jobs if there are already three strikes up on the scoreboard when the ballgame begins.

The Chilean entrepreneurs whom I mentioned at the start are all concentrated in “new” industries and activities, even though these were “old”. Many were associated with agriculture, but had nothing to do with the traditional way of cultivation. Their true business was service: added value in the time-honored agricultural and cattle raising activity. In this fashion, they created spectacularly successful industries in fruits, wines, fish, and wood, becoming kingpins in each of these. The process for arriving at this new state of success took some years of penury and many changes in the structure and practicability of the enterprises that had existed formerly. That is, change was not free, but those enterprises were transformed in less than a decade. In Mexico, we have been correcting the macro for forty years, while we protect industries that are no longer economically viable, as if they were museums.

At present, diverse initiatives of the law are being debated that range from one extreme to the other. On the one hand, these are attempting to make the Commission on Competition autonomous, conferring upon it enormous discretional powers. On the other hand, there is a proposal to approve legislation of public-private associations, which would give the government opportunities to choose the winners and the losers, not on an international battleground, but rather, in the assignation of public resources.

It would be better to develop clear, simple, and fair rules, without discretional faculties, so that an individual who saves, or the entrepreneur, or the investor would know what to expect. In parallel, we must understand the context: in very large markets, there can be many participants, but in small markets, the only way to avoid monopolies is with a true market opening. We have, for forty years, been betting on a past that will never return. It is time to begin to construct the future.

www.cidac.org

The violence stalking the country does not let up, nor does it seem to respond to the calculations, strategies, and expectations of the experts, of those in charge, or of the lookers on. The only thing that we know for certain is that it is not a linear process, but rather, that there are many players involved who roll with the punches, adjust quickly, and change the rules of the game. The only certainty appears to be that everything changes dynamically.

As the saying, attributed to Truman, goes, “it’s what you learn after you know it all that counts.” Recent months have been  exhaustive in lessons learned because they have obliged everyone –from the president to the most unassuming of Mexicans- to review hypotheses, dialogue with the opposition, and analyze the underlying themes. During these years, I have observed the upscaling of violence, listened to the experts, and have attempted to understand the nature of the phenomenon that we are experiencing. In this process, I have found everything: from public servants who are clear on the phenomenon and its changing nature, perspicacious analysts who attempt to understand and furnish very valuable pieces of the puzzle, gratuitous critics, and experts who during their 15 minutes of fame can explain the past with great clarity, but who are dumbstruck when faced with forward-looking decision-making with the information available. Along the way, the only thing that is evident is that the Mexican lives in fear and without the least amount of lucidity concerning how the future will be.

I would like to share the things that I have been learning, without any attempt in arriving at a definitive conclusion:

• The relationship between violence and criminality is indissoluble, and perhaps therein lies the heart of the matter. The intrinsic point at issue is not narco trafficking, but, instead, the impunity that derives from the inexistence of mechanisms and instruments -and probably willingness- to contend with organized crime. This is what differentiates us from countries such as Spain or the U.S., where there is a similar drug trafficking phenomenon, but not the same violence.
• The origin of the current situation dates back to two circumstances that came about in parallel but independent fashion: on the one hand, the precipitous decentralization of power that began in the nineties and that transferred power, money, and responsibilities to the state governors, but without developing modern police and judicial institutions to replace those of the old PRIist system. The old instruments –corrupt and abusive, but in their time effective at the federal as well as at the state level- were no longer functional, but nothing took their place. On the other hand, at more or less the same time, for commercial reasons, the narcotrafficking cartels decided to begin development of an internal drug market. This conjunction of happenstances could not have taken place at a worse time. When Calderón assumed the presidency, the country was up in flames and required a clear-cut and absolute response.
• The strategy adopted from the end of 2006 reestablished some semblance of order in places like Tijuana, but failed in coming into effect in time to substitute for the Army, which was never trained for police work – with an able and duly formed federal police force. The result has been loss of prestige for the Army and emboldened mafias.
• The mafias have developed territorial strategies that hold sway over the entire criminal world: from drug sales up to extortion and abductions. In addition, they call the shots on political decisions and, wherever they go, impose their law.
• The greater part of the violence transpires among the mafias themselves; thus, the figure of 90% of deaths from the ranks of the narcotraffickers and their hit men of every ilk is credible. The reality is that the government has had relatively little impact on this inter-mafia dynamic.
• Historically, narcotraffickers have always eschewed the limelight: never wished to attract excessive attention. But that has changed: like all the rest of the de facto powers in the country, the mafias have become power factors and operate as rational and calculating political actors: they send messages, strong-arm, and position themselves with political objectives. Perhaps there is no better example of this than the cover of Proceso with Sinaloa drug cartel kingpin Zambada engaging in a bear hug with Proceso editor Julio Scherer, or the barefacedness and levity with which the Zetas murder at will wherever. This tactical change should elicit reflection from the skeptics: there is no doubt that the narcos are baiting the government in all ambits and a collapse of the government is no longer inconceivable.
• Violence has become the presentation card of the mafias and that should compel everyone to rethink the strategy of capturing or killing the kingpins.
• Legalization is somewhat akin to the obverse side of conspiracy theories: everything is resolved with the stroke of a pen. The only problem is that the legalization that would help Mexico is not that of the drugs here (because, as with traffic or taxes, violation of these laws appears to be par for the course), but of those in the U.S.
• The true problem resides in that we do not have a system of government that works. Narcotrafficking has done nothing more than bring to light the lack of professional police corps, a corrupt judicial system, and an appalling division of functions and responsibilities between the states and the federation. Part of this derives from the corruption and the nature of the old system, but part is the product of the incompetence of our present politicians and their apathy in constructing an effective and functional institutional structure. The problem is the shortfall in governance, which makes criminality possible.
• Weapons comprise an instrument, not the crux of the matter. There is no doubt that the mafias possess better arms than the Army and the police, but the problem is that weapons enter the national territory, as easily from the North as from anywhere else. The black market in arms operates worldwide, and the fact that these arms are found Mexico is proof of the anarchy at customs checkpoints and other means of access.
• The rapid rise of violence in Monterrey should be taken seriously. If this, the most modern of localities of the country, succumbs in the face of this escalation, the country has no future. The surprising aspect is the inaction and passivity of the political class, which, due to indifference or connivance, acts as if nothing is at play.
• Colombia can serve as a reference: there, things changed when the government made its fiscal proceedings transparent; it obtained the support of the whole population, and the media recognized that only by ceasing to be the mouthpiece of the mafias would the country come out the winner. The key lies in a government that communicates, leads, and wins the respect of the population.
• The government has no choice  but to combat organized crime because that is the real issue. The solution cannot dwell in negotiating with the mafias but in working to eliminate impunity and developing strong institutions from which to impose rules on the mafias themselves. The order here is crucial.
• There are ways out: what has occurred during this time is that the government has rewarded loyalty above competence. There are well-conceived plans dating from the end of the nineties that were discarded because of ignorance and stupidity, but that without doubt can become the base of an overwhelming and integral response. Monterrey might be a good place to begin implementing these.

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“Transition presupposes –says Joaquín Villalobos- dismounting repressive apparatuses, reconstructing institutions, learning to employ the laws, and protecting the citizen instead of keeping a watchful eye on him”. The political transition opened a new space of freedom for the citizenry and of competition for political parties. In the process, it changed the structure of numberless institutions, modified power relations in Mexican society and among distinct levels of government, and created fissures in control mechanisms that had previously sufficed in thwarting citizens from acting on their own. The problem lies in that it also facilitated the growth of organized crime.

Marcelo Bergman, a CIDE researcher, has devoted himself to studying criminality in various Latin-American countries. He began by observing that Brazilians and Argentines, Guatemalans and Mexicans, all experienced sudden upsurges in crime indices. Each country offered logical explanations that took into account what had occurred, and the explanations made sense and reflected the local realities that their populations had lived in the flesh. What surprised Bergman was that although the dynamic in each country was intelligible, the problem of criminality had broken out in a great number of countries at the same time.

Bergman’s scholarship has led him to develop diverse hypotheses that attempt to explain the phenomenon in a more broad-ranging manner. Along the way, he has been able to impart a much wider and more comprehensive perspective of the phenomenon of criminality in the region, advancing a viewpoint that explains other components of what has taken place in these countries. According to his analysis, there was a cluster of factors that coincided in several countries in Latin America in the nineties: the decentralization of power; the demand for consumer goods by the lower middle classes; the appearance of organized crime eager to satisfy this demand, and the appearance of China as a source of low-priced products that appeased this market. In Bergman’s perspective, the world changed in the nineties because fragmentation of power and the appearance of emerging middle classes created conditions for the remaining two factors to concur and create a space of opportunity for criminality that had not existed for decades.

Every country is distinct, but various nations of the American subcontinent experienced profound changes in their political and governmental structures during the same period. In some cases, the change put an end to military dictatorships and the beginning of civil governments, while in others, the change was due to processes of democratization. In both cases, the core factor was that power was decentralized. This decentralization implied the transfer of former control mechanisms to other governmental levels, which, at least in legal terms, had always been responsible for public safety, that is, what was de facto in the hands of the central authority now passed to state and local authorities. The problem is that these authorities were not organized or trained for what suddenly fell to them, and, in many cases, did not possess the instruments or the understanding of the challenge that was now theirs. Countries such as Chile and Uruguay, which have centralized (unitary, as Bergman calls them) systems of government, did not experience power decentralization and also did not find themselves in the midst of sudden rises in criminality.

The second component of the picture that this scholar has fashioned is perhaps the most significant and fresh. The existence of a repressed, pent up, demand for consumer goods by the incipient middle classes is not only a factor of economic, but also one of social and political, transcendence because it demonstrates the improvement of these societies as well as the failure of statist economic policies of the previous decades that had handicapped development. The emerging middle classes observed the manner in which the upper middle classes consumed, but did have the economic capacity to acquire the same goods. This source of demand was satisfied by organized crime.

The first wave of criminality materialized with car thefts, and these very automobiles found their way to chop shops for sale as parts or for export to other markets in the same region. Over time, yet other markets prospered: bootleg CDs and DVDs; stolen consumer goods, and so forth. The major corollary of the process was the appearance of China as the supplier of inexpensive and attractive goods for an available market. Contraband followed on the heels of all this. With boundless celerity, Chinese goods inundated the clothes, shoes, electronics, computer, and toy markets in these nations. The consumer of these goods did not perhaps have access to the most sophisticated sound or video devices or to the best-quality films, but did have the same fun and opportunity as the most pretentious consumer.

In their seminal article “Broken Windows”, James Q. Wilson and George Kelling argued that when a building’s broken windows are not repaired or replaced, the street vandal will soon break all the rest. The authors developed a theory of criminality with this metaphor, which postulated that when the most fundamental crime is not seen to or attacked, it mushrooms until it becomes a phenomenon ubiquitous in its irrepressibility. What Bergman has observed in these countries complies with this rationale: instead of assaulting the problem when it began, countries that became democratized and their populations were too concerned with the great political themes of the transition and neglected the most elemental: the safety of their inhabitants. Heisting cars was followed by piracy, which was in turn followed by drug consumption, and now, we are deep in the throes of a sea of violence for which State instruments continue to be insufficient or inadequate. There is no happy ending in this story, but Bergman’s interpretation provides much food for thought.

The breaking up of a semi-authoritarian political system does not necessarily entail the growth of criminality. This situation came about in Mexico and in other nations of the South-American continent because transition was not accompanied by the development of solid institutions able to contribute to the establishment and maturation of a police system, a justice system, and, in general, a system of government. We Mexicans are now obliged to find the way to achieve what the transition’s actors and authors never understood to be central to the edification of a nation that is not only democratic, but also modern and civilized.

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“In democratization theories” -writes Joaquín Villalobos- “it is said that authoritarianism is made up of uncertain processes with certain results, and democracy, of certain processes with uncertain results.” Although the interminable democratic transition that Mexico has experienced has been excessively terse, its consequences have been extraordinarily grandiose and not all good. Decentralization of power has had the effect, which should clearly be welcome, of balancing the federal powers, but also, a penchant for demolishing the governing capacity. These changes could not have taken place at a worse moment.

The crisis of criminality that began to overtake Mexico at the beginning of the nineties has not come to a halt in terms of either expansion or aggravation. Not only that: to this criminality, we must add the wars among narcotraffickers, and, more recently, the grandstanding of the losers of these encounters, which is manifested in the form of extortion, selling protection, and abduction. Explanations concerning the causes of these phenomena are many and each offers distinct diagnoses. But none of these clarifies the panorama exhaustively.

There are two types of explanation for the phenomenon of criminality: some are endogenous in nature because they arise from the national reality itself, unique and distinct as it is from the rest of the world, such as that I describe here. The other type of explanation also arises from the domestic reality, but is produced within an international context, which affords to it its own characteristics. The two types of explanation are not contradictory, but they reveal distinct dimensions of the problem, each thus meriting its own analysis.

All diagnoses coincide in that the government’s weakness is the explicative factor. There is no doubt that, as can be inferred from the Villalobos quote, the strength of the authoritarian government allows for certainties that do not derive from the existence of solid and representative institutions, but rather, from the very capacity of the operation itself and of the susceptibility to employ institutions that are not acceptable (nor presentable) in a democracy. The processes of democratization exert the effect of weakening this operational capacity and of canceling the ability for resorting to authoritarian instruments. The wager inherent in a democratization process is that, little by little, institutions will consolidate that will permit processes that afford confidence and that avoid excesses.

The process of the decentralization of power in Mexico arrived at the worst possible moment because it occurred precisely when narcotrafficking was experiencing a transformation. Contemplated in retrospect, economic liberalization and the negotiation for a North American Free Trade Agreement (NAFTA) comprised the first steps in a process of political liberalization and decentralization that came to be generalized with political opening and the 2000 PRI defeat. The instruments and mechanisms of control that previously dominated the presidency shrank and were slowly transferred to state governors, political parties, and the “de facto powers”. Although it took some years to consolidate the true transfer of power, it became evident in 1994 that the presidency no longer possessed the capacity of imposing its will.

While the beneficiaries of these transfers quickly acquired great power, not all had the capacity of action, or, more exactly, the structure to exercise the power. By the same token, the de facto powers required no more than formal separation from the PRI or acquisition of their own public presence to make good on their interests. Something similar happened with the political parties and legislative leaders, although these were frequently very childish and even comical in their manner of making the change in power relations obvious.

True change, truly transcending change in terms of the objectives of the country’s governability, occurred at the level of the governors. In contrast with a union, business, party, or legislative leaders, the governor of a state faces concrete, specific and legal responsibilities for the population’s health and safety, as well as for the functioning of vital processes of the country’s stability. From this perspective, one of the great misfortunes of the political transition resides precisely in that mechanisms that are critical for the country’s stability and public security were never effectively transferred to or developed by state governments. The federal government was losing its capacity of action, but the governors did not develop the latter with the same alacrity, and many, perhaps the majority, have not begun to do so to date. The result is the chaos that we have in the public security: the nonexistence of professional police officers, a dysfunctional justice procurement system (not that the old one worked), and growing insecurity.

The flip side of the coin was the change in the profile of narco trafficking in Mexico. For many years, drug trafficking entertained a logistic rationality: drugs arrived from the south to be exported north. Arrangements between functionaries and governments with narcos, today’s hot topic of conversation, entertained a very distinct dynamic from that of the present because the narco trafficking business was essentially one of transport to the north, while the federal government was exceedingly powerful. This combination permitted a degree of corruption that was functional for narco trafficking and not threatening to the government. All players were delighted.

Everything indicates that toward the mid-nineties, narco trafficking began to develop an internal drug market, an ominous decision that would change everything. At present, criminality –both that which is pure, traditional, delinquency, as well as that deriving from narco trafficking- has become a factor of instability throughout the country and one that grew hand in hand with the disjointedness of the federal government’s security apparatus. The combination of democratization and decentralization of power and the growth of narco trafficking and criminality could not have occurred at a worse moment for the country.

This explanation, as so many others, is lame because it only explains certain parts of what has taken place over the past several years. Marcelo Bergman, a Center of Economic Research and Teaching (CIDE) specialist, has developed a much more comprehensive explanation that permits us to register these processes within a broader context. Bergman says that many countries began to be besieged by criminality in the nineties, and that, although everyone pays heed to their own explanation, such as that which I have attempted to describe here, the general context makes a difference. Thus, this should be observed painstakingly, because in its absence, there will perhaps be no solution.

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The war on narcotrafficking has paralyzed the country. The Colombian experience demonstrates that the key to defeating the criminal mafias lies in the conviction of the population that the enemy must be defeated. However, for whatever reason, this conviction does not exist in Mexico. Thus, the “war on drugs” has become yet another of many themes rife with political controversy and means to discredit the government. This said, if one analyzes the diversity of stances, the true problem is found in the president’s action on the political and media fronts.

In weeks past, the president has held meetings with all sorts of people and groups, analysts as well as politicians, representatives of the media, intellectuals, and victims. At each of these sessions, there has been a plethora of debate and interchanges. At first, parties and governors refused to participate because, they adduced, the president’s calling everyone together was the result of his plan being stuck, and not because he was truly interested in dialogue or in restating his strategy. In the end, good sense won out.

What is interesting is that, if one removes the stuffing and the posturing, differences in content are not very great. Eduardo Guerrero says that the objective of the government on initiating combat with the narcotrafficking mafias was the following: “1. To fortify the security institutions; 2. To diminish, stop, or prevent drug use; 3. To incapacitate the criminal organizations, and 4. To regain public spaces”, objectives that would appear to be logically related among themselves, but, “unfortunately, this is not the case”. On his part, Manlio Fabio Beltrones, the PRI Senate leader, states that “Felipe Calderón made the correct decision: to take the fight against organized crime and narcotrafficking to its ultimate consequences. It is a decision that must be supported and continued. I only say that the strategy must be set forth anew. It is not by confronting delinquency with the firepower of the State that we will solve the problem: we would only generate more violence. We should act with greater intelligence, police intelligence to deliver precise hits, bring an end to the capos, desiccate them where they are most affected: the money”*.

Everyone is uneasy about the deaths, and rightly so. According to Joaquín Villalobos, who after spending more than twenty years in the jungle ought to know something about these themes, responds that “Violence is an inherent part of war, and is not in itself a sign of how badly the war is going. The opponents’ demand is reasonable if we focus on exacting more efficacy, better inter institutional coordination, integrality of plans, and political agreements on security, but it is illogical when they clamor for an end to violence at all costs, because this is impossible”. Villalobos’s essential claim is that violence does not depend on the government, but that it is, rather, an instrument that drug cartels have decided to employ to defend their places of business. “Their natural fight is with other cartels, not with the State”. “The violence of the cartels against the Mexican State is, therefore, a last-ditch resource, because attacking the government does not help their purposes, something clearly expressed in their explicit bylaw avoiding, in the vernacular, “heating up the plaza”, that is, calling attention to itself from the State”.

The basic problem is not in the definitions, but instead, in the political differences. On making the war his, and only his, the president left the actors -politicians and governors-, as well as the society in general, in a comfort zone, one with no responsibility and with broad opportunities for critiquing. Thus, for the so-called dialogue to be successful, it must entertain commitments and minimally reliable conditions. The president should be clear that his proposal is not a media ploy, and that there is, in truth, a genuine space and vote for confidence ensuring that all positions will be heard and assessed, and equally important, that this agenda will not wind up contaminated by electoral affairs. It is particularly important to build consensus behind the mutual objective, which has become more relevant in view of the recent abductions of journalists. However, no dialogue will prosper unless it concludes with a division of responsibilities, particularly between the Federation and the governors.

Stratfor, an institution of intelligence professionals in the U.S., affirms that “one of the two things that needs to happen is to reduce violence to politically acceptable levels: A single drug trafficking entity must dominate, or an alliance and/or understanding between the remaining two DTOs must restore the cartel balance of power. Either outcome would see battles for territory end, with the remaining organization (or organizations) then able to focus on its/their primary raison d’etre: making large sums of money.”**

Gustavo Flores-Macías reasons that President Calderón’s strategy will not be successful until it attains two previous conditions: strengthening the government’s fiscal position, and including the population in backing the government’s efforts. Different from Colombia, notes Flores, the Mexican Government has not executed significant fiscal reform, has not advanced in public rendering of accounts, nor has it launched a campaign against drug use, all of the latter key factors in the strategy of Uribe, the out-going Colombian president. As Uribe made fiscal accounts transparent, the population began to have confidence in his project and was disposed to support him. His main success, says Flores, was that the population came together behind the president because it was convinced that the effort was real and that the battle embodied no partisan logic.***

It is commendable that President Calderón has thrown open the theme that dominated his six-year term to debate, and that he is doing this straightforwardly. The positions that he heard and his own assertions in these forums evidence the enormous effervescence in Mexican society. And not without good reason: the theme dominates the media, and violence relentlessly persecutes the population. At heart, people want to know what the government proposes in this war and what the yardstick is for gauging success. It’s not much to ask.

Judging by the experts, it appears evident that the key to success lies in the intrinsic fortitude of the government and of the popular support it amasses. Both are debatable at present. I have no doubt that the best legacy that the president could bequeath has less to do with his successor than with the scaffolding necessary to win this war, because the alternative is worse than anyone could imagine. But the precondition is that this theme be his theme, i.e., that he is able to convince his interlocutors that the objective is public security and not presidential succession.

*Nexos, Agosto 2010-08-05

**http://www.stratfor.com/analysis/20100802_mexico_security_memo_aug_2_2010

***http://www.nytimes.com/2010/07/30/opinion/30flores-macias.html?_r=1&partner=rss&emc=rss&pagewanted=print

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