MEXICAN POLITICS: SOUTH VERSUS NORTH

BY LUIS RUBIO

There is no matter as transcendent for Mexico as the poverty that characterizes the country’s South and that impacts the entire national life. Vast natural and human resources are concentrated there that cannot display the best of themselves: it is from there that much of the historic migration to the United States derives, and therein emerges a good part of the resentment typifying Mexican politics.

Not the least doubt exists that creating conditions for the development of the country’s South constitutes a domestic priority not only for reasons of basic justice but also because accelerated economic growth in that region would result in widespread benefits for the country as a whole and even more so in the context of the current recession. The paradox is that a successful strategy for that region would also constitute a source of certainty, therefore of development, for all Mexicans.

The northern half of the country, beginning somewhere North of Mexico City (and including the peninsula of Yucatán), has grown at an average rhythm above 5 percent and some localities of that area have for decades grown at more than 7 percent.  In contrast, the South—the states of Chiapas, Oaxaca, and Guerrero, and comprising some parts of Veracruz, Puebla, Morelos, and the state of Mexico—have hardly surpassed the place they had 40 years ago. That is, the South has not only not progressed, but rather, in relative terms, it has fallen behind dramatically.  While the economy of Aguascalientes has more than quadrupled in size during this period, the South has stayed nearly static.

The present government is not the first to be concerned with how to rescue the South, nor is it the first to design ambitious programs to induce higher growth rates in that territory. From at least the seventies, one government after another has produced innumerable programs oriented toward generating higher growth rates. Nonetheless, the area has grown very little. Some programs have promoted infrastructure, others have provided subsidies for the most indigent families; some invented the idea of special development zones with tax incentives, while still others are devoted to financing electoral clienteles. Unfortunately, there’s no reason to expect a better outcome with the current dogma.

For decades, the North has been the beneficiary of legal as well as functional schemes, starting with NAFTA, which generated huge opportunities and could count with the government’s willingness to eliminate political obstacles to development. None of those elements has been present in the South of the country.

The plan of the current government embodies massive actions such as the Tren Maya and the Dos Bocas refinery. The most serious critics of the train-project argue its lack of an entrepreneurial criterion from inception; specifically, they cite that the train does not connect key points to render it not only viable but also to convert it into a potential trigger of other investments. In addition, it does communicate with the region’s main source of income, tourism. The refinery is being built at the worst moment in time, when demand for gasoline is beginning to decline and in the context of PEMEX’s virtual bankruptcy.

Both the Tren Maya and the refinery illustrate the problem with this administration: it not only ignores the economic circumstances, but there is no solid diagnosis behind its projects; rather, they stem from sheer political intuition derived from a desire to do good but anchored in a nation long gone. But desires are not results and the economic crisis, PEMEX’s dire situation, and the recession threaten to further impoverish a region which, with good projects, could easily trigger strong growth, particularly by industrializing agriculture, for which the area appears uniquely endowed.

As the success of Oaxacans in Chicago shows, there is no dearth of creative capacity in that state, while there’s an abundance of political bureaucratic and social hindrances to development.

The evidence of Chicago is crucial because it confirms that the problem is not one of capacities or potential, but rather of realities at the local level. In plain language, perhaps the most obvious difference between Aguascalientes and the southern Mexican states lies in the presence of myriad political bosses in the South who thwart the development of persons and enterprises there.

In addition to the latter, the reality of the South has inhibited investment in infrastructure, making it impossible to attract, even under the best of circumstances, productive investment. The vicious circle of insecurity and petty political, union, and magisterial chieftains who buffet the region have held back not only progress but also even state action in the form of adequate infrastructure like in other latitudes.

Southerners are not different from the rest of Mexicans. All need certainty to prosper. For decades, the North has been the beneficiary of legal as well as functional schemes, starting with NAFTA, which generated huge opportunities and could count on the government’s willingness to eliminate political obstacles to development. None of those elements has been present in the South of the country, not even the most basic transportation infrastructure. 

Instead of continuing to erode the sources of certainty of the northern states, the government should learn from them and create sources of certainty and stability in the South.

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Luis Rubio is a Pacific Council member and president of the Mexican Council on Foreign Relations (COMEXI).

This article was originally published by COMEXI.

The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of the Pacific Council.