"The Fox Administration: Three Years After"
presentation from the event
Enrique Dussel Peters discusses
the socioeconomic development of Mexico both before
and during the Fox administration, arguing that an
emphasis on maquiladora and other forms of low-value-added
production do little for long-term economic development.
The Fox Administration’s Macroeconomic Dictatorship:
is Mexico’s “Glocal” Challenge
By Michelle Johnson, School of Social Welfare
export-oriented industrial manufacturing sector has buttressed
Mexico’s macroeconomic policy. When Vicente Fox emerged
from the National Action Party (PAN) as Mexico’s first
freely and fairly elected president in 2000, many expected
a savvy and business-minded leader that would
act on a number of reforms to revitalize Mexico’s economy, promote
political transparency and improve relations with the United States. According
Dussel Peters, Professor of Economics at the Universidad Nacional Autónoma
de México, three years of economic and political paralysis has instead
resulted in rising poverty, increased income disparity and a paucity of new
employment opportunities for Mexican workers. As jobs continue to hemorrhage
from the manufacturing
sector in response to international competition, Peters asks, “Is there
life after primitive forms of macroeconomy?” He posits that a “glocal” perspective
can help us to understand the ways in which macroeconomic factors combine
with regional microeconomic realities to shape industrial futures.
Peters’ “glocal” model,
the increased diversification and shifting of sites of production within
global commodity chains marks a departure
from earlier types of globalization processes. These newly configured production
processes benefit from the examination of regional or “territorial” effects
through space and time. For example, when a Wal-Mart order is filled through
global commodity chains in ten countries, what are the local effects and
linkages within these territories? He argues that the general concept of
development and the process by which specific Mexican localities can be
integrated into the world market are best understood from this “glocal” perspective.
The consideration of “glocal” possibilities first requires
an examination of current macroeconomic realities.
macroeconomic policies continue to be dictated by a liberalization strategy
characterized by import liberalization and privatization,
cheap labor power, foreign investment, controlled inflation and fiscal
deficits and a minimalist state approach. Export-oriented industrial
at the core of this strategy. With its implementation, exports grew from
30 to 70 percent of total gross domestic product (GDP) in the 1990s.
An estimated 3,500
firms managed approximately 96 percent of these “primitive exports,” temporary
imports to be re-exported. Peters suggests the polarizing structure of
these firms, many of which are maquiladoras, stultify innovation and
development in the productive sector.
the same time, Mexican suppliers have been unable to integrate
world markets due to insufficient financing. Peters points out that
real terms by 85 percent after the passage of the North American Free
Trade Agreement (NAFTA) in 1994. And while billions of dollars sloshed
the Mexican economy
during the 1990s, only 2-3 percent was captured absent the tariffs,
income taxes or other payments to the public sector that might
have been harnessed
development. What have these trends meant for workers? A net increase
in formal employment opportunities in the manufacturing sector initially
to a rise
in consumption. Yet as productivity increased, real wages for workers
stagnated and in some years declined, largely due to the overvaluation
of the peso.
reported that since Fox’s inauguration, Mexico’s
socioeconomic situation has worsened due to political failure to
address issues of investment,
trade, employment and agriculture. As a result, salaries have stagnated
as GDP per capita has decreased to that of the 1980s, leaving more
than 2 million new
households in poverty during the three year period. The yawning gap
between available employment and needed jobs has stretched: from
2001 to 2003 approximately 20
percent of all manufacturing jobs, including 27 percent of jobs in
the maquiladora sector, disappeared. Peters argues that export-oriented
hinges precariously on U.S. growth, cannot be expected to support
future employment needs in an era where Mexico has suffered
a dramatic loss
against Asia and Central America. Yet Mexico’s liberalization
strategy, the “dictatorship of macroeconomy,” teeters
on the assumption of constancy within an export sector that represents
less than 5 percent of Mexico’s
employment. Liberalization strategy must be seriously rethought,
says Peters, with a “glocal” imagination about how to
integrate a projected 105 million workers into world markets in the
argues that competitive conditions for the productive sector
need to be fostered along with regional-sectoral integration to
value-added chains, to include financing and specialized personnel.
Poverty rates should
be prioritized above inflation rates and reforms must embrace taxation.
Institutions, both public and private, must be strengthened. Education
is a fashionable
capital discussion that needs to be defined in terms of the demand
for educated individuals and the role of universities. Peters suggested
investments are currently focused on secondary and higher education
to the detriment of primary
education for the poorest members of society.
Yet the Fox Administration seems to have no consciousness of the
deep crisis within Mexico’s productive sector. And within
the discourse of liberalization strategy, discussions of imports
or government expenditures are nothing less
than heretical. Economic reforms are effectively blocked by the
overall lack of strategy, the rotation of officials within the
Mexican government and a
lack of economic transparency.
asked if hope for reform might lie on the political horizon.
In Mexico, governors and local
leaders are becoming increasingly
noted that the polls suggest that 85 percent of Mexico City’s
residents support Andrés Manuel López Obrador, the
mayor of Mexico City who has become well known for his focus on
poverty reduction and microenterprise.
While it is unlikely that he will impact Mexico’s macroeconomic
policy during Fox’s presidency, his popularity suggests that
with the status quo has settled in. It is unclear what the 2006
election will bring, although López Obrador is regarded
as a frontrunner. In the meantime, the market’s failure to
generate employment can be expected to result in growth in the
informal sector and immigration to the U.S. Therefore, immigration
policy and the “glocal” challenge of integrating workers
into world markets should also be of concern to the United States.
Dussel Peters is Professor at the Graduate School of Economics
at the Universidad Nacional Autónoma de México. He presented ”The
Fox Administration Three Years Later“ at CLAS on November 6, 2003.
Dussel Peters speaks
with students after the event. During his stay,
he also offered a one-day seminar sponsored by CLAS
on the role of maquiladoras in Central America and