Mexican entrepreneur Carlos Slim, the richest man in the world and according to Forbes worth $69 billion, said in the XVIII meeting of the Montevideo Circle, celebrated in Mexico City: “In the case of Mexico, what we have had for many years is a very participative democracy, where there has been a clear demonstration of participative citizens to vote, elections that have been noticeably competitive.” Mr. Slim added that the Mexican Institutions are solid, and in the end, resolve the disputes among parties. However, Mr. Slim’s fantastic and striking commentaries didn’t end there. Mr. Slim added that he is going to “continue investing in Mexico,” regardless of the political party who is governing the states of Mexico where he is investing. Thus, for Mr. Slim, “investments are not made on the basis of how temporal governments are, because investments are a long term commitment.”
The “Slim” formula hardly applies to other countries, except those like Mexico, where monopolies, corruption, a repressive government, and a pro selective Direct Investment (DI) go hand in hand.
In the case of Mexico, elections have not been a symbol of democratic government. During the seven decades of the Institutional Revolutionary Party (PRI) autocratic government, and the two governments of the Action National Party (PAN), there have been different presidents but clean elections seem not to exist.
Mr. Slim’s definition of democracy is blind to the past repressive regimes of Mexico, including the bloody drug conflict of Felipe Calderon’s administration. During Calderon’s administration, more than 55 thousand Mexicans lost their lives; a majority of these people were not associated with the Cartels.
Considering the mindset of Mr. Slim, we can use the definition of Joseph Alois Schumpeter, the Austrian-Hungarian-American economist and political scientist, author of Capitalism, Socialism & Democracy, who defined democracy in terms of elections, as “free competition for a free vote.” Yet this is not the case in Mexico. Most elections, including the election of President Felipe Calderon, and the July election of Peña Nieto, have been plagued with fraud and unfair practices where political institutions like the Federal Electoral Institute (IFE) an “independent” institution served the party in power or the interests of the monopolies. It doesn’t matter if the government is in the hands of the PRI or PAN, The IFE serves the few, and does not seem to be vigilant of free and transparent elections.
The IFE has lost credibility among the Mexican population, creating serious doubts and instability by such practices as “accidental” but frequent “shut offs” of the system. They are the target of continuous accusations of being unable to enforce transparency during past and the July elections, which many believe warrant new elections.
Mr. Slim, many ex-politicians, and new entrepreneurs of the PRI party have benefited from the 1980’s and 1990’s neoliberalism, where PRI politicians, their close affiliates and families became, seemly overnight, great entrepreneurs, monopolizing many of the state services that during PRI administrations became private enterprises.
The PRI and the PAN, benefited many national enterprises, including TELMEX, a former state company, today a monopoly of Mr. Slim. Thus, Mexico is a monopoly paradise. Mr. Slim would not be able to repeat his accomplishments in the U.S. or any country with anti-monopoly and fair business practices laws. Another example is Televisa, a big broadcasting monopoly in Mexico, that has served the PRI and PAN government and their interests through great publicity campaigns seeming to favor this time around Peña Nieto and the PRI candidates to congress. Televisa exchanges the ability of having a monopoly, along with the former Imevision, a state TV broadcasting company that is today TV Azteca, to great advantage to their businesses.
Since bribery is widely practiced, but hardly ever detected or even looked for by the Mexican Federal government, corruption has benefited big corporations and conglomerates. Wal-Mart de Mexico a subsidiary of Wal-Mart Stores Inc. violated the antiforeign bribery laws, with briberies in the amount of $24 million to help expand its market of Wal-Mart Stores in Mexico. Wal-Mart was investigated by the U.S. Justice Department and the Securities and Exchange Commission, but not by the Mexican government where many public officials received those dirty dollars. According to the New York Times, whistleblower Mr. Sergio Cicero Zapata said that for years, Wal-Mart de Mexico was involved in pay outs to government officials who could help them get permits to open stores in any Mexican city, and thus, dominate the market.
Democracy cannot be defined by the electoral process alone, because in Mexico there is no “one free vote for one person.” The fraudulent, “in your face,” July elections favored Mr. Peña Nieto of the PRI party, allegedly by vote-buying using prepaid cards from Monex, intimidation, and giving goods and services. Mr. Peña Nieto is the choice of the Atlacomulco group, and the monopolies in Mexico; families of politicians associated with the PRI that have governed the State of Mexico for five decades, and have allegedly, benefited greatly from their PRI party, becoming successful entrepreneurs.
Mr. Peña Nieto has been linked to the Atlacomulco group since childhood, and has been backed by the ex president of Mexico Carlos Salinas de Gortari, whom the Mexican people hate for his peso devaluation that left many Mexicans in poverty, and for the alleged privatization of state companies and banks to close friends and affiliates.
If there were true democracy in Mexico, Mr. Peña Nieto would not be President of Mexico, but would be indicted for one of the most serious episodes of political repression in Mexico, not the first or the last perpetrated by crooked PRI governments. The National Commission of Human Rights documented evidence that Mr. Peña Nieto, while he was the governor of the state of Mexico, was directly responsible for the violation of human rights of the population of Atenco, State of Mexico. Among the violations and abuses by the security forces of his government were torture, the illegal detentions of 146 citizens, trespassing on private property without a legal order, the rape of as many as 26 women and the death of two persons, one of them a 14 year old boy.
The population of Atenco was defending the right to keep their land, against Mr Peña Nieto’s government project of building a new international airport with their land. Mr. Peña Nieto governed exactly as past PRI and PAN administrations have done over history, with repression, torture and murder.
Mr. Peña Nieto has been backed up by the United States Government to support the U.S. foreign investors in Mexico. Mr. Obama called Mr. Peña Nieto and congratulated him as President-elect of Mexico, when the IFE only had counted 15% of the votes. The U.S. Secretary of State, Mrs. Hillary Clinton, congratulated Mr. Peña Nieto even when the IFE has not yet finished to clearing the disputes and irregularities of the electoral process, or render its determination of the disputes the other competing parties submitted to the IFE.
Officially, Mr. Peña Nieto has not received his certificate to be the next President of Mexico. It is obvious that, by calling the July electoral process, “free, fair and transparent,” the Obama administration is backing up Mr. Peña Nieto in exchange of continuing the security plan and commercial pursuits of the U.S. government, even as the Obama administration has been so inefficient and his policies have caused many murders by drug Cartels on both sides of the border.
The media in the United States that favors Mr. Obama continue to be silent on the reality that Mexicans are living daily. They minimize the alleged fraudulent elections, and the meetings of thousands of people protesting the election of Peña Nieto. They also have diminished Fast and Furious impact in Mexico, and the killing of innocent people. They disregard the violent history, the crimes, and the alliances of some PRI politicians with drug cartels. The Press in America, with few exceptions, has stopped being the free and impartial press of old, to serve the interests of their democratic, entrepreneurial, and Presidential alliances.
Mrs. Clinton and Mr. Obama have disregarded the black history of the PRI, a clear setback for Mexico. The Obama administration disregards the fraudulent elections of July, and has disrespected the Mexican people by tactically legitimizing Mr. Peña Nieto as President. The Mexican people feel hurt over Fast and Furious and the failed strategies that have killed thousands of people in Mexico. This administration’s U.S. foreign policy disregards the most basic democratic principles and ethic values in legitimizing Mr. Peña Nieto despite the flagrant violations of human rights by the presumed elected president.
Democracy lives and dies with fair representation, equality and transparent elections. It improves the standard of living of the citizens and their human development. It is not only the representative of entrepreneurs or the interests of the few, but of all citizens where public officials serve the people who elect them. Mexico stands on the wrong side of a great partition, without the chance to live this kind of democracy.
For the foreign investor, the monopolies in Mexico hinder new Foreign Direct Investment (FDI), and diversification. According to the Corruption Perception Index of Transparency International, the corruption in the country is rampant with an index of 3.O, showing more corruption than in past years, preventing fair business practices and competition.
In order to have the economic and social stability that FDI needs in the long term, the country needs democratic and transparent political institutions, and a judiciary system able to handle itself with impartiality and abide by the law. The political and judicial systems in Mexico are permeated with corruption and inefficiency. While there are fewer regulations and a good quality Mexican working force, Mexico lacks transparency, and has a huge inefficient bureaucracy.
Furthermore, the drug war in Mexico has caused the fragmentation of the cartels, and new, small groups are being formed, increasing the criminality, kidnappings and insecurity on the streets of Mexico. The Gross Domestic Product (GDP), fell around 3% and companies must invest heavily in personal security, constituting 1% of the GDP, the security industry is worth an estimated $800 billion in Mexico. Certainly, the payment of expensive security services, affect more small businesses and FDI. The hope of the entrepreneurs in Mexico is that Peña Nieto, as past PRI administrations have done, will put together a deal with the drug cartels, allowing the violence to stop. Of course, if this happens, the corruption of the state could increase, negatively affecting the people, small businesses, and FDI fair competition practices. Mexico will continue having problems managing the drug violence in the streets and the insecurity in the states of Mexico.
Poverty, crime and insecurity will undoubtedly affect not only the Mexican people but also, the corporations and Direct Investment (DI). The minimum wage in Mexico is less than $6. It is one of the lowest wages in the world and that may, in the short term, attract foreign investment. However, Mexico now has more than 50 million people under the poverty line. The price of food staples has at least double from speculation and the economic crisis. Mexico finds itself in a pitiful position and the government seems unable to increase the Mexican people’s standard of living.
Poverty, criminality, weak political and judiciary institutions, rampant corruption, and repressive regimes like the PRI, are the main ingredients for instability that cannot benefit the Mexican people, neither FDI. Mexicans, despite the support of the U.S. for Peña Nieto, will not see him as a legitimate president, creating a crisis of credibility, more repression, and instability that will hinder his government.
Beatriz Schiava © 2012. All rights reserved