July 14, 2006

Mexico Missed a Chance To Change

By Marcelo Ballvé
New America Media

BUENOS AIRES — In mid-2004, celebrated Mexican novelist Jorge Volpi wrote a column for Mexico City news-magazine Proceso headlined “The Disappearance of Mexico.” Mexico, he said, had inspired all of Latin America with its leap to multi-party democracy in 2000, only to “fade away” as a beacon of change in subsequent years. “Mexico has disappeared completely as an example of change for Latin America” under the presidency of Vicente Fox, wrote Volpi.

Volpi’s words appear prophetic now that the candidate of change appears to have been defeated in Mexico’s presidential elections to pick Fox’s successor. Although leftist Andrés Manuel López Obrador vows that he will fight the results in the courts, official ballot tallies give a narrow victory to technocrat and center-right candidate Felipe Calderón, Fox’s former energy minister and the darling of the business community and the conservative northern states.

It’s clear to most analysts that Mexicans voted not for Calderón but against the risks of change. In Buenos Aires, conservative daily newspaper La Nación hailed Calderón’s victory in an editorial, but noted that the “Hugo Chávez effect” — the fear that López Obrador might become “another Chávez” — played a major role, as it had in Peru’s recent elections. In other words, any of the votes for the government candidate were cast out of fear that López Obrador, once in power, would emulate the worst populist excesses of Venezuela’s leader. In the same way, Peruvians recently chose as president Alán García, despite his disastrous first presidency in the 1980s, rather than former military officer Ollanta Humala, who was considered “Chávez’s candidate.”

But Ollanta Humala was a nationalist and had no track record in government, while López Obrador launched his campaign as a successful mayor of Mexico City, the world’s largest metropolis.

It’s possible that we won’t ever know what López Obrador’s presidency would have been like, although if the courts decide that he did indeed lose the election he could conceivably run again and win in 2012. What’s certain is that a leftist Mexican presidency does not necessarily mean a populist debacle. López Obrador’s plan of subsidizing the underprivileged could have had results similar to Brazil’s successful implementation of innovative welfare programs under leftist President Luiz Inácio “Lula” da Silva.

President Lula has managed to keep the Brazilian and international business elite moderately happy (his country had grown steadily and has paid down its debts) while multiplying the acquisitive power of Brazil’s most poor at a rate quicker than overall economic growth. In Brazil, they are calling this the “China growth effect.” This phrase refers to the sudden economic clout of millions of formerly destitute Brazilians, who like members of the Chinese lower classes are seeing their spending power multiply and are suddenly finding themselves to be crucial to their country’s economic robustness. In Brazil’s case, this boost had come from President Lula’s social programs, including the successful Bolsa Escola program that pays Brazilian parents a subsidy if they maintain their children enrolled in school.

Mexico’s problems are similar to Brazil’s; both economies top lists of the world’s most unequal income distributions. Both countries have a dynamic, relatively small, middle class and sophisticated business community, but millions are shut out of the formal economy or condemned to poverty (half of Mexico’s population) because of a lack of education and their marginalization from job markets and technology. That is the reality that is addressed by Brazil’s Bolsa Escola program, and by the social policies that López Obrador instituted as mayor of Mexico City and which his opponent attacked as “Chávez-like.”

Under López Obrador, for example, single mothers in Mexico City received subsidies and expanded access to health care and micro-credits. These types of programs are easily attacked as “handouts” that create bureaucracy and dependency. But in the tight realities of a household economy in Mexico City slums, they can make a difference in whether a small business gets off the ground and whether a child goes to school or not.

History has shown that in Latin America economic growth tends to increase economic inequality rather than reduce it, because benefits accrue to those that are already plugged in to the relatively narrow circuit board of the formal economy. Even if the poor benefit marginally from economic good times, they remain poor.

It takes political decisiveness and innovative social programs, not just sound economic management, to change the root problem of economic inequality, from which all other problems in Mexico and the rest of Latin America sprout, including crime and corruption. Mexico appears to have missed a chance to create a “China growth” phenomenon similar to Brazil’s that could have changed the lives of millions of Mexicans for the better and reduced poverty permanently. But if Calderón chooses, he might look at his razor-thin margin of victory and see in it evidence of the fact that his opponent’s ideas also have merit. He still has a chance to show that Mexico can change, and that the beginning of multi-party democracy in 2000 wasn’t simply a new layer of makeup applied to an ugly and old reality or persistent economic inequality.

Marcelo Ballvé writes about Latin America and is a 2005 Inter American Press Association Scholar.

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