2 Mexico's Neoliberal Political Economy—In Place in Ciudad Juárez
The development of neoliberalism in Mexico provides the context for the discussion to come of the research study of women workers and their households in Ciudad Juárez. Setting up this context entails examination of societal level processes involved in the implementation of economic policies and political reforms in Mexico since the 1980s. Significant political changes coincided in time with sweeping economic changes in Mexico. These changes constitute more than a chance combination of circumstances in the political economy (Oxhorn and Starr 1999; Peeler 2009; Wiarda and Skelley 2005). Considering the relationship between economic liberalization and political liberalization, between marketization and democratization, gives insight into the challenges of social disparity and exclusion in Mexican society.
Mexico’s path of neoliberalism created the circumstances in which the city of Juárez has developed and gendered household survival strategies have taken shape. Since the 1980s, low-income households have had to organize their resources to protect well-being, and ever-growing numbers of women shifted their labor from unpaid and/or traditional work of domestic service or petty commerce to work in the labor-intensive export-oriented maquiladora industries. What maquiladoras have produced in Juárez serves as a guide to the plight of ordinary people on the front lines of the political economy of neoliberal globalization: Mexico’s gendered political economy has direct bearing on the social spatial configuration of the city that was the site of the study of women workers and their households. The cityscapes of self-built housing and industrial parks and dance clubs and fast-food franchises reflect and mold the social relations of inequality—between citizens and state technocrats, workers and owners/investors, women and men. This chapter suggests how policies of neoliberalism and the feminization of labor in particular have shaped social disparities in Ciudad Juárez.
Mexico's Opening to Global Markets and to Political Change
A broad-brush characterization of the Mexican political regime up through the 1980s and well into the 1990s, under the long-governing Partido Revolucionario Institucional (PRI, Institutional Revolutionary Party), depicts a highly centralized and strong state in which decision-making power resided in the hands of the president and other components of the executive bureaucracy (Otero 1996). The system could also be characterized as well-organized in the way it connected the majority low-income segments of society to the state via labor unions and peasant leagues among other corporatist organizations (Conger 2001). Cooptation was by far the preferred strategy for retaining power.1 Yet another characteristic of the Mexican political system under PRI control was the pragmatism of politicians who were prepared to do whatever was necessary to keep the regime in power (Otero 1996). Thus, the Mexican debt crisis of the early 1980s brought the rise in the PRI of the so-called technocrats, an internationally educated elite, who had the credentials and the contacts to negotiate about the state’s debt with private banks, international financial institutions, and other governments (Canak and Swanson 2000). This “new pragmatism” meant Mexican leaders embraced economic restructuring and opening to the global market as the only route out of economic crisis and toward economic development.
After the 1988 presidential election in which the PRI candidate, “technocrat” Carlos Salinas, claimed a dubious victory over left-leaning Cuahtémoc Cárdenas, the Mexican political system at last “came in for sustained criticism over the lack of democracy” (Domínguez 1999, 2).2 The mid-term elections in 1997, during the presidency of Ernesto Zedillo (also of the PRI), were the first to be characterized as generally free and fair, and in 2000, after 71 years of single-party domination by the PRI, Mexicans elected a president from an opposition party, Vicente Fox of the Partido de Acción Nacional (PAN, National Action Party). Some have argued the modernized PAN that emerged in the 1980s was ideologically suited to “serve the interests of transnational business better than the PRI” (Vadi 2000, 88). But Carlos Salinas (1988–1994) and Ernesto Zedillo (1994–2000) are the presidents who secured Mexico’s economic restructuring and opening to global markets. Presidentialism and the top-down style of political interaction in Mexico made possible their top-down economic reforms, and although both presidents made political reforms, political liberalization was at best a distant second to the priority of Mexico’s economic liberalization.
The technocratic Salinas administration moved to open the economy to foreign trade and investment and engaged in free-trade negotiations culminating in the implementation of the North American Free Trade Agreement (NAFTA) with Canada and the U.S. in January 1994. A key aim of the Salinas administration was to attract new foreign investment, including foreign speculation in the expanded Mexican stock and bond market. Drawing foreign investment to the labor-intensive, export-oriented industries of the maquiladoras figured prominently in these efforts. Attracting this type of foreign investment involved specific measures to control wages downward. For example, NAFTA maintained the already existing imbalance in bargaining power between Mexican workers and employers; this imbalance was a result of conscious government policy and tied investment, in the maquiladoras especially, to falling wages in Mexico (Babb 2005; Lee 1998).
Also crucial to Mexico’s ability to repay the government’s debt during the Salinas presidency was reducing the activities of the state and its involvement in the economy. Restructuring the economy to be led by the private sector meant privatizing hundreds of state enterprises such as telecommunications and airlines. This sell-off of government firms reduced the direct economic activity of the state substantially and enriched a small number of Mexicans— among them Carlos Slim Helu, the richest man in the world as of 2010, whose major assets include Telmex. In tandem, the Salinas administration sharply reduced government expenditures on social programs, moving to the market virtually all social development activities except support for those in extreme poverty. The lean state response to poverty was Solidaridad, (Solidarity, formally known as PRONASOL, Programa Nacional de Solidaridad, or National Solidarity Program), the signature social program of the Salinas presidency. It was funded by privatization proceeds and created primarily public works projects—many of them extending drinking-water and sewage systems to the rural and the urban poor. By delivering up to $15 billion (Cornelius 1995) through some 150,000 “solidarity” committees, covering almost all municipalities, the program was able to ameliorate some of the social dislocation caused by economic restructuring and reduce poverty among some of the extremely poor.
Before the end of 1994, at the beginning of the Zedillo presidency, despite the public image of a “NAFTA miracle,” Mexico was again in crisis. Imports had boomed creating an annual trade deficit of up to $23 billion. The Mexican state financed this deficit with short-term bond issues known as tesobonos. But when U.S. interest rates went up in 1994, these Mexican bonds became less attractive to investors. The international financial community saw the Mexican situation as jeopardizing economic reform globally, and it put together a $52 billion emergency loan package so that Mexico could pay off investors when their tesobonos came due (Green 2003). The terms of Mexico’s loan package were to pursue neoliberal economic reforms still more aggressively. Among other things, this meant further promoting labor-intensive, export-oriented industrialization through the maquiladoras, which was advanced significantly by the state holding down wages well below inflation. Among the first of Zedillo’s policy responses to the 1994–1995 crisis was the December 1994 devaluation in which the peso lost 40 to 50 percent of its value relative to the U.S. dollar. This policy move cut the wage bill of the maquiladoras by nearly half almost overnight. And by 1998, in the latter years of the Zedillo presidency, employment in the maquiladoras passed 1 million.
Although the Zedillo government was praised for its sound economic management as it paid off its international loans; policies to address the social costs of economic restructuring had low priority. Zedillo’s social program PROGRESA (Programa de Educación, Salud y Alimentación) focused on rural education, health, and nutrition. The basic design of the program provided mothers with cash benefits linked to their children’s school attendance and to regular clinic visits (hence, the name “conditional cash transfers” [or CCTs]). In 1999, the average program benefit received by a family with school-age children was 345 pesos, or US$36 per month; the monthly limit was the equivalent of one minimum wage, 575 pesos, or US$60 that year.3 The program is credited with reducing extreme poverty at a time—the late 1990s—when ordinary Mexicans lost homes and small businesses as domestic bankruptcies increased and new sources of employment—except in the maquiladoras —were scarce (Weisbrot and Ray 2012, 7, Figure 3).
In addition to enacting policies of economic restructuring, both Salinas and Zedillo launched progressive electoral reforms during their presidencies with the result that over the 1990s, opposition parties became viable and managed to mount successful challenges at the municipal, state, and national levels. Characterized by some observers as an unintended consequence of Mexico’s pursuit of economic liberalization—with the state taking a less active role in the economy and the federal budget shrinking such that resources used to bind voters to the party also shrank—the PRI lost the traditional means of leverage in the system of patronage politics. The resource-for-loyalty exchanges between the PRI-dominated state and ordinary Mexicans in various sectors of society could not be sustained (Canak and Swanson 2000; Schneider and Silverman 2000). The PRI lost its grip on the political system as Mexicans shifted their support to opposition parties, notably to the PAN. After moving “considerably toward democratization” in the 1990s (Dominguez 1999, 2), the “defining moment” consolidating Mexico’s electoral democracy came in 2000 when PAN candidate Vicente Fox won the presidency (Haber, Klein, Maurer, and Middlebrook 2008, 151; also Chand 2001). Then, in 2006, Mexico’s electoral institutions withstood the test of the controversial presidential election, when the federal electoral tribunal declared Felipe Calderón of the PAN the winner by the narrowest of margins (0.58 percent) over Andrés Manuel López Obrador of the Partido de la Revolución Democrática (PRD, Party of the Democratic Revolution) (Selee 2008).
The ascendancy of the PAN, in the legislature and in winning the presidency for a second time in 2006, signaled no reversal of Mexico’s economic restructuring.4 In contrast to the electoral “left turn” in other countries in Latin America, the outcomes of Mexican elections since 2000 have consolidated the neoliberal economic model (Weisbrot and Ray 2012). Enrique Peña Nieto, who won the presidency in July 2012 and returned the PRI to power, has acted quickly on campaign promises to pursue neoliberal policies of privatization and labor market reform under the direction of his Minister of Finance, Luis Videgaray, an MIT-trained economist whose government career began during the presidency of Carlos Salinas.5 The overall portrayal of the Mexican political economic “transition” reveals a process in which a dubious democracy but a model of economic restructuring moved to more electoral democracy and continues on the path of neoliberal marketization.
The Democratic Challenge of Poverty and Social Inequality
The argument that economic opening ended patronage politics in Mexico and thereby ushered in democracy is partial, if not misleading. A disturbing paradox existed in the last years of the 1990s during the securing of Mexico’s electoral democracy: Electoral politics were cleaner from the 1994 campaigns through the Fox victory in 2000, but more Mexicans were in poverty (Tulchin and Selee...