Mexico's Election: It's the Economy Stupid

By Mark Weisbrot 
The New York Times Via Center for Economic 
and Policy Research 
July 2, 2012

http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/mexicos-election-its-the-economy-stupid
 
If ever there were an election pre-ordained as a result of a
country's economic performance, it would be that of Mexico.
The ruling PAN party was destined to lose because it presided
over a profound economic failure for more than 11 years.
Almost any government in the world would have lost under such
circumstances.

While some have noticed that the economy has played a role in
the election, almost no commentators seem to appreciate the
depth of Mexico's economic failure.  Let's start with the
basics: Since 2000, when the PAN was first elected, income
per person in Mexico has grown by just 0.9 percent annually.
This is terrible for a developing country, and less than half
the rate of growth of the Latin American region during this
period - which was not stellar.  The numbers are even worse
if we just look at per-capita growth since the 2006 election:
Mexico finishes dead last in Latin America.

But it is even deeper than that. Mexico, like the region as a
whole, suffered a record-breaking economic growth collapse
in the two decades prior to the election of the PAN
(1980-2000).  If the Mexican economy had simply continued to
grow at the rate that it did prior to the 1980s, the country
would have European living standards today. There would be
relatively few Mexicans seeking work north of the border.
And there is nothing implausible about this possibility:
Mexico's growth prior to 1980 was very good, but it was not
at the level of China during the last 30 years, or anything
record- breaking.

It is not fashionable among the punditry these days to
mention that Mexico's economy has performed so abysmally for
more than 30 years. That is partly because this is also the
period in which Mexico drastically shifted its economic
policies to what in Latin America is called "neoliberalism":
abandoning state-led industrial and development policies,
tightening monetary and fiscal policies, liberalization of
foreign investment and trade.  The 1994 NAFTA treaty was just
one step in this transformation, but Washington had a big
"invisible hand" in the process since the 1980s, both
directly and through institutions such as the IMF and World
Bank.  And today, 80 percent of Mexico's non-oil exports go
to the United States.

Of course, not all of these policies were mistaken - but the
overall result is an unqualified failure.  The same thing
happened in the region from 1980 to 2000, where per capita
GDP grew by 6 percent, as compared with 92 percent over the
prior two decades.

The vast majority of the region responded to the long-term
economic failure of the 1980s and 90s - the worst such
performance in more than a century - by electing left
governments:  Argentina, Brazil, Venezuela, Bolivia, Ecuador,
Paraguay, Uruguay, Nicaragua, El Salvador and others.  These
candidates and parties ran explicitly against what they
called "neoliberalism."  Why then, did Mexico move to the
right?

Part of the answer may be found in Mexico's electoral and
especially media institutions.  The left PRD candidate is
widely seen to have had the 1988 election stolen from him.
The 2006 election was too close to call:  PAN's Calderón was
declared the winner by 0.58 percent, but the electoral
authorities did a recount of 9 percent of the votes and never
released the results; a comparison of the recounted precinct
results with the original totals indicated that Calderón's
margin disappeared.

More importantly, the monopolized TV media was found to have
played a significant role in the 2006 elections, more than
enough to prevent the PRD candidate Andrés Manuel López
Obrador from winning.  With 95 percent of TV broadcasts
controlled by just two media outlets with a strong and
documented bias, a left-of-center candidate really has little
chance.   Barack Obama would not be President of the U.S.
today if he had faced a similar media in 2008, because most
Americans would believe that he was a Muslim who was not born
here.

More than half of all Mexicans are living below the official
poverty line, but the new government has little to offer the
poor majority or even to produce the long-term growth that
Mexico once had.  Sadly, Mexico's economic progress will
probably be quite limited until there is a more level playing
field for elections.

[Mark Weisbrot is co-director of the Center for Economic and
Policy Research, in Washington, D.C. He is also president of
Just Foreign Policy.]

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