On the surface it would seem that the Mexican economy has fully recovered from the currency collapse of 1994/95, and some international analysts are even saying Mexico is the example the Asian economies should use to get out of their recession as quickly as possible. Reality, however, is slightly different.
After an horrific economic contraction in 1995 of 6.2%, the economy grew again in 1996 and even reached an impressive (official) 7% growth in 1997. If you average these figures over the three year period you get a mere 1.8% annual growth rate which is lower than the annual 1.9% increase in population. Real wages for workers, far from growing have been falling, according to a university study, by 34.5% in the last three years. This decline in wages is part of a more long term trend, for instance, the purchasing power of the legal minimum wage is now only 25% of what it was in 1980.
One of the main reasons for this economic growth is precisely the increased competitiveness of Mexican exports because of the devaluation of the peso. This has mainly benefited the "maquiladora" sector, of assembly factories for US companies concentrated along the US-Mexican border, with apalling working practices. This sector is obviously facing increased competition from the South East Asian exports, now much cheaper after the collapse of their currencies. This is putting a lot of pressure on the Mexican currency and another collapse of the peso is not ruled out, especially taking into account that bad debts represent 42% of the total.
The fall in the price of oil has also badly hurt the Mexican economy, because although oil exports represent only 9% of GNP, they account for 40% of state revenue. So far this year the government has introduced two cuts packages in the budget directly as a result of the fall in oil prices. Taking all these factors into account, and the bleak perspectives for the world economy, the official forecast for economic growth in 1998 of 5.2% is quite clearly exaggerated (and in fact the government has already revised this figure downward twice).
Given the weak economic situation it comes as no surprise that the process of decomposition of the regime (which started at the end of the 80s and accelerated after the Zapatista uprising in 1994) has continued. Increasingly, sections of the PRI bureaucrats are leaving the party, like rats leaving the sinking ship, forming their own parties, or joining the left wing PRD or the right wing PAN. In 1997 an important section of the official union bureaucracy even split off from the official trade union federation CTM and formed their own National Workers Union (UNT), which maintains their old anti-democratic internal practices but nevertheless opposes the government's economic policy, which is undermining their wealth and privileges as trade union leaders.
The rise of the PRD can be summarised by their election victory in the Federal District (DF) last summer, which everyone thought was going to be won by the PAN, and also by the fact that the PRI lost it's overall majority in Congress for the first time. Now the PRI bureaucracy and national government are trying to undermine and sabotage Cardenas as mayor of Mexico City so that he enters the year 2000 presidential elections weakened. Nevertheless the masses still have a lot of illusions in the PRD (especially in Cardenas who, together with Manuel Lopez Obrador, represents its "left" wing).
In the PRD the divisions between the left and the right (represented by Muñoz Ledo) remain and are on the increase. The latest clash took place at the National PRD Congress in March over the issue of former PRI leaders standing in the state governor elections for the PRD. In the state of Veracruz, one such element, Morales Lechuga, wanted to stand for the PRD and Cardenas publicly opposed him while Muñoz Ledo supported him as a candidate. Cardenas won and the Congress rejected him as a candidate. The Congress also declared that the party is a "left wing party", a move which obviously reflects the pressure from below. Also the DF organisation of the party is controlled by the soft left Democratic Left Current.
In this context there are sections of the state apparatus and the bosses who favour a "tough" policy against all opposition movements. Their main concern is the Zapatista movement and they have taken a number of measures in order to force them to surrender or to eliminate them. They passed an indigenous rights law in Parliament which is opposed by the PRD and breaks all previous agreements between the government and the EZLN. They have launched a campaign to expel foreigners from different NGOs from Chiapas (200 of them so far have been expelled) in order to get rid of unwanted witnesses. And finally they have stepped up the army presence in Chiapas, setting up army check-points, with army helicopters and planes flying low over the Zapatista communities, etc. The government is also financing, arming and training paramilitary organisations, not only in Chiapas but in other conflict ridden areas of the country.
It would be a mistake nevertheless to think that the repression is only aimed at the Zapatistas. Trade union activists, debtors organisations, peasant leaders, etc. all have been harassed with illegal arrests (like the case of trade union leader Aquiles Magaña), assassination attempts (like the case of debtors organisation leader and Marxist Federico Valdez in Chiapas) and actual murders (more than 600 PRD members have been murdered in the last 10 years).
This increase in repression, nevertheless, is not a sign of strength on the part of the PRI regime, but a sign of weakness. At the same time, increasingly people are losing their fear of repression. Although strike levels are low, mainly due to high unemployment and job insecurity, the process of formation of democratic currents within the official unions is accelerating. Workers and peasants are joining the PRD as the only channel where they can express their aspirations for change, despite the corrupt and careerist nature of many of its leaders.
In this situation it is vital for working people, in the cities and the countryside to rally around a clear programme of transformation which should include: the repeal of foreign debt, the nationalisation of the big banks and monopolies (the only ones to have benefited from the economic crisis), the expropriation of the big landowners and the distribution and mechanisation of the land (where in many cases the same methods of work as a thousand years ago are still used) and autonomy for the indigenous peoples that wish it. Only this programme, a socialist programme, can offer any hope of a way forward for Mexico. If adopted, it would give a powerful push to the revolution in the whole of Latin America and would also have a massive influence in the growing Latino population in the US.