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Jan 18, 2017
Mexico destabilized by economic pressures, dysfunctional politics
Gas price hikes spur protests in Mexico. (Reuters photo)
Peña Nieto: Mexico's Golden Goose is Dead
Economic stress destabilizes U.S. neighbor
By Kent Paterson/Correspondent
Jan. 18, 2017
In the biggest surge of
mass protest since the forced disappearance of 43 Ayotzinapa college students
back in 2014, outrage over higher gasoline prices and related issues sweeps
Detonating the citizen uprising is a 20 percent price increase rolled out
Dec. 27, 2016 by President Enrique PeñaNieto administration. Though Mexicans were immersed in
the holiday season, protests began almost immediately but really picked up
steam after the new year kicked in.
Grabbing media attention
was a wave of apparently organized lootings, especially in the states of Nuevo
Leon, Mexico and Veracruz, where mobs made off with electronics products and
assorted other items from Walmarts, pawn shops and other high-profile commercial
outlets, as if a late-arriving, naughty Santa had roared onto the scene. Still unverified reports tie the looting to
organized crime or government officials, evidenced in part by accounts of
police standing by while stores were sacked and videos of looters boarding
Despite hundreds of
arrests, it has not been publicly revealed who were the intellectual authors of
the looting. A recent precedent for mass
looting in Mexico occurred in Los Cabos, after a hurricane slammed the tourist
resort in 2014.
Yet media focus on the
lootings initially overshadowed a more sober response to the so-called
"gasolinazo" of Dec. 27, summed up by the popular slogan "I
protest, not loot."
According to Mexican press accounts, tens of thousands
have staged largely peaceful but militant protests in at least 28 of Mexico's
32 states. However, five deaths have been attributed to confrontations,
including the killings of two young men allegedly shot by police in the state
of Hidalgo. In addition to tossing out the gasoline price hike, demonstrators
demand the exit of Peña Nieto, who still has nearly
two years left of his term.
The Rev. Alejandro
Solalinde, a Roman Catholic priest and internationally respected human rights defender and migrant
advocate, led one march on Jan. 7, 2017 in Mexico City.
hunger," Solalinde was quoted as saying in Mexico's daily La Jornada. "The people are
electrified and very sensitive. For example, in Hidalgo, the multitude drove
off police cars with rocks. Society is very desperate up against a political
class so corrupt, so insensible and so blind that it does not calculate the
dimension of the social upheaval."
Solalinde urged the creation
of a new citizen assembly and a new national constitution.
"We are not only
asking that Peña Nieto leave. We want the overturning of all the structural
reforms and seek the cleansing of the political parties. The citizens are
becoming more conscious, they have awoken and we are organizing in
response," Solalinde said.
The Peña Nieto
administration justifies the gas price hike as a bitter but necessary step
brought on by expensive, soaring gasoline imports (Mexico now imports more than
half of its gasoline from abroad, chiefly the United States, according to Peña Nieto), sharply declining national oil production, and the inequity of
subsidizing better-off drivers at the expense of the poor, whose social
programs could be cut further if gasoline prices aren't raised.
Reduced tax revenues from
less and cheaper oil already netted federal budget cuts to the Social
Development Secretariat in 2015 and 2016, including an 8.6 cut the first year
and a 2.3 percent reduction in the second one, according to Proceso magazine.
"The goose that laid
the golden egg is dead," Peña Nieto recently said on national television,
adding that oil production at Mexico's key Cantarell field plummeted from 2.2
million barrels per day six years ago to only 200,000 today.
Availed by the
Organization for Economic Cooperation and Development as a prudent measure, the
20 percent gas price hike is rejected by many if not a majority of Mexicans who
point the finger at decades of corruption, disinvestment in the Pemex national
oil company and the 2013 energy reform pushed by Peña Nieto and approved by the
Mexican Congress, a law which opened the door to liberalized gas prices and
foreign ownership of fossil fuel resources and gasoline distribution.
Higher local gas prices
are adding another drain on Mexican revenues. Many Mexicans who live near the U.S. border and possess authorization to visit the United States are coping with the
crisis by hopping over to El Paso, Texas, and other U.S. border cities and filling up
their tanks at half the price they pay at home.
The international flavor
of the gasolinazo was visible during a visit last month to Juarez, Chihuahua, where
a long line of cars and trucks headed to El Paso stretched from the foot of the Paso del Norte International Bridge deep into downtown Juarez. Predating the price hike
announcement, the scene nevertheless unfolded amid reports of gas shortages and
the pending increase.
While Mexican drivers
waited for hours to enter the U.S., the money exchange houses lining Avenida
Juarez alongside the idling vehicles advertised a falling peso and a climbing
dollar, graphically depicting the direction money is flowing across borders. As
the peso drops, more dollars must be paid to procure U.S. gasoline
New Popular Movement
January's protests have
continued daily in one locale or another, sometimes featuring citizen blockades
of ports, border crossings, gas stations Pemex (Petroleos Mexicanos) installations, and highways. At
a Jan. 10 rally in Mexico City attended by thousands, effigies of both Peña Nieto and U.S. President-elect Donald Trump were burned.
Several distinct but
sometimes overlapping sectors are represented in the protest surge: well
organized labor, farmer and popular groupings; university student associations;
opposition political parties; and localized, emergent citizen forces who are
quick to distinguish themselves from political parties or even the
long-established social movements. Whether big or small, demonstrations are flourishing across the land.
In Puerto Vallarta,
Jalisco, a small group staged a march on Jan. 14. The action was
organized by Colosistas Unidas, named after Luis Donaldo Colosio, the
presidential candidate of the ruling Revolutionary Institutional Party (PRI)
who was assassinated in 1994 and had a reputation as a social justice advocate.
Following behind a sound truck with a speaker spitting thunder and fire to the
backdrop of the Mexican national anthem, protesters held placards with messages
that included "Resign Peña" and "Our children want a better
The orator, Juan
Villanueva, insisted that the gasoline crisis was the "final insult to
Mexicans." In an interview, Villanueva said he had been a personal friend
of Colosio and suffered jail and death threats for his activism throughout the
"We are fed up with
high-level corruption, impunity. (Government officials) are like mafias. We
can't tighten the belt any more ... we don't want violence, and we don't need it.
There are many of us looking for peace but without progress."
Making their way into the
downtown tourist zone, the marchers drew mixed reactions. While some locals and
tourists looked surprised, others honked their horns or clapped. Passing a
private high school, the marchers were greeted by visibly elated students
peering out from the second floor who shouted, "Out with Peña" and
the Barack Obamaesque "Yes, we can!" At one point, a female transit cop
began photographing the marchers but was interrupted by a woman with an
apparently unrelated issue.
Reluctant to be identified, one woman marcher
nonetheless told the reporter that she feared what officials allegedly had in
store for Mexico. "They want a military dictatorship. They want to
militarize the streets. That's not right because it’s against human
Villanueva warned that
the gas price hike will trigger a "cascade" of price increases of
other products by February. The press is
full of stories of scattered increases across the Republic, including intercity bus and
Uber fares in Mexico City, fruits and vegetables, and staple tortillas which
are reportedly fetching as much as 20 or 25 pesos a kilo in parts of the
country, an amount equivalent to about a quarter of the daily minimum wage.
According to a projection
by Scotiabank cited by La Jornada, Mexico's inflation rate for January alone
will tip 1.4 percent and reach 5.5 percent for the entire year.
On Jan. 15,
hundreds marched in Puerto Vallarta demanding Peña Nieto's ouster and the
cancellation of the 20 percent price hike. Organized by a new collective,
Vallarta Unida (United Vallarta) and other groups, protesters burned effigies
of local political leaders they said supported the gasoline price increase and
addressed a large crowd assembled to watch the nightly clowns who perform on
the boardwalk. Multiple issues boiled up during the protest, including the
widespread problem of forcibly disappeared people, possible water
privatizations and political dysfunctions of all kinds.
Demonstrators called for
tax resistance, defunding political parties they maintain suck up public monies
and turning up the heat on a political class
blamed for looting the national patrimony. "Where are the golden
eggs?" questioned marcher Aldo Alberto Hernandez. The Puerto Vallarta resident voiced a
complaint familiar in the U.S., taking a jab at high payroll deductions and the
16 percent VAT (value added tax) Mexicans must pay.
"There are too many
taxes," Hernandez contended.
impunity go hand in hand, like boyfriend and girlfriend," Villanueva said,
adding that public tarring and feathering of responsible officials is one
The activist said the
protest movement is committed to the long haul. "This isn't a question of
one day or a little while," Villanueva said. "It will be permanent
until the people of Mexico triumph … as Don Miguel Hidalgo (the acknowledged father of Mexican
independence) said, ‘enough is enough.’”
Local politics stoke protests
Besides pain at the pump
and sticker shock in the aisle, an overflowing basket of grievances is fanning the tenor and tone of
the protests. A mass demonstration
Jan. 5 of an estimated 20,000 people in Monterrey, Nuevo Leon, was preceded
by weeks of swelling anger over the failure of Governor Jaime "El Bronco"
Rodriguez to toss out a vehicle tax he earlier pledged to cancel. During the
protest, calls for Rodriguez's ouster joined the demand for Peña Nieto's early
departure. The demonstration culminated in a violent confrontation between a
shadowy bloc-like group and police.
modified a tax increase and vowed that the ticket prices for public
transportation in Nuevo Leon would not go up. In Baja California, more than
10,000 people were reported at a Jan. 12 demonstration in the state capital
of Mexicali that opposed not only the gasolinazo but also a new state water law
portending privatization which passed the state legislature only days before
Christmas. Internationalizing the angst, one demonstrator burned a U.S. flag.
On Jan. 15, as many as
80,000 people reportedly turned out for demonstrations in Tijuana, Mexicali and
other Baja California cities. Demonstrators renewed a call for Peña Nieto and
Governor Francisco "Kiko" Vega to step down, and raised a host of
other issues including feminicides, farmworker and maquiladora wages and
fishing restrictions in the Sea of Cortez.
The popular movement chalked up its first victory when Governor Vega announced Jan. 17, with the support of state lawmakers, that he would abrogate the new water law and cancel planned rate hikes.
Neighboring New Mexico
and Texas, the city of Juarez and the state of Chihuahua have witnessed numerous
protests. The gasolinazo put a new governor, Javier Corral, in a proverbial
political pickle. A member of the
conservative National Action Party (PAN), Corral assumed office last October
amid a debt crisis handed to him by outgoing Governor Cesar Duarte and renewed
bouts of narco violence.
Corral won election by
reaching beyond the PAN's normal base and enlisting diverse political forces
into a "citizen" crusade to rescue Chihuahua from disaster. He
campaigned as a champion of human and women's rights, and promised to enact
social reforms benefiting the poor.
Accordingly, Corral named
several veteran leaders of Chihuahua social and political movements associated
with the left to state government posts, including former congressman and rural
leader Victor Quintana as state social development director and Chihuahua City
lawyer and women's activist Lucha Castro as the governor's human rights
The January police
eviction of protesters from a Pemex facility tested Corral's public image and
government. The new governor was
suddenly under pressure from maquiladora (assembly plant) and other business interests
complaining of supply shortages and delays caused by the protests while facing
possible repudiation by his base for any repression of the new popular
Rumors flew that unnamed
left members of Corral's government would tender their resignations, perhaps
dashing the possibility for reforms only three months into the new
administration. So far, nobody has quit but the political climate in Chihuahua
as well as elsewhere in Mexico remains testy.
State and local
governments are scrambling. In Jalisco and other states, governors have
unveiled new policies aimed at cushioning the effects of the gasolinazo and
ranging from austere personnel rules to keeping the lid on city bus fares, at
least for now.
Lay-offs and local tax breaks for companies and citizens are
likewise in the works. Twenty four Jalisco municipal presidents representing
the Citizen Movement party, including the mayors of Puerto Vallarta and
Guadalajara, have filed a lawsuit against the gasoline price hike on
constitutional grounds, the Reforma news agency reported.
Claimed as a
countermeasure to the admittedly negative impacts of the gasolinazo, the Peña Nieto administration announced Jan. 9 a new national agreement supported by
the Business Coordinating Council and the PRI-linked Mexican Workers
Similar in some respects
to new policies unfolding at the state level, the federal pact seeks the
streamlining of government, modernizing
public transportation, facilitating business credit and incentivizing the
repatriation of the billions in Mexican capital squirreled away in the United
States and other foreign nations.
Mexican Employers Confederation declined to jump aboard, criticizing the
agreement as lacking specifics, and members of the influential Mexican
Governors Association, including Chihuahua's Javier Corral, complained they were not
Given all the dynamics, it's too early to assess the full
implications of emerging new policies on the nature and viability of both the
Mexican economy and state, but they could be considerable. One thing is for certain: the gasolinazo is
scorching and reshaping the terrain for the 2018 presidential and congressional
Meanwhile, the burgeoning
popular movement is planning more mobilizations in the days ahead, including
blockades by the farmers’ organization El Barzon and allies of Mexico-U.S.
border crossings on Jan. 20, the day of Donald Trump's inauguration
as the 45th U.S. president.
Mexico's changing world scene
The Dec. 27
gasolinazo cannot be divorced from other events and factors that are serving to
destabilize in the status quo in Mexico, including Trump's imminent arrival to
the White House, the U.S. president-elect's Twitter broadsides that produce
jitters to the value of the peso, which plunged to a new low of more than 22 to
the dollar recently, and forecasts of lower-than-expected growth for 2017.
Perhaps capturing the national mood, Proceso newsweekly splashed a picture of
Trump on the cover of this week's edition with the words "The war that's
If the United States
suffers a narco-dependency on the south, Mexico is afflicted by economic
dependency on the north. In different government, academic and popular spheres,
talk is growing of reclaiming Mexican sovereignty and diversifying economic
relationships. Even Peña Nieto is turning his gaze away from the north.
recent speech to Mexican diplomats broadcast live on national television, the
beleaguered president defended the North American Free Trade Agreement (NAFTA) attacked
by Trump but also stressed developing greater ties with the Asia-Pacific region
and the Persian Gulf states whose sovereign nation funds the Peña Nieto
administration is cultivating.
More than 35 years after the Mexican oil boom of the Lopez Portillo years intoxicated the
country, Mexico stands at a crossroads. As the public indignation intensified
over the gasoline price hike, Proceso reprinted an interview it ran back in
1980 when bubbles of black gold promised a new source for national investment
and development. The interviewee was the late Nobel-winning economist Lawrence
Klein, who urged Mexico to follow the path of Norway in developing its energy
reserves with "moderation" and not let "social problems to spin
out of control."
Klein warned of
alternative scenarios in oil rich economies like Venezuela and Iran that were
creating great breaches between the rich and the poor, as well as fomenting
conspicuous consumption and corruption.
"People take to the streets and
shout their demands," Klein told Proceso. "They demand everything.
Corruption in different social levels winds up generating revolutionary
Correspondent Kent Paterson is a veteran journalist and author and an expert on Mexico and the border.