Mexico: Butter and Ballots

Mexico is in the headlines. After nearly a decade of economic stagnation, mounting foreign debt, and rapidly decreasing standards of living, the Mexican economy has begun to flourish under the administration of President Carlos Salinas de Gortari. Through an aggressive program of privatization and deregulation, Salinas has cut inflation from 80 percent to under 20 percent. Employment is up. For three consecutive years, the Mexican stock market has outperformed every other market in the world. And for the first time since 1982, real wages are on the rise.

This rapid progress has made the Mexican resurgence an international media event. "Mexico is on its way to becoming an economic powerhouse," declared Forbes. "Mexico is back," announced the Wall Street Journal, calling Salinas's team "the best in the world." The Economist declared Mexico "a model debtor nation" and Salinas's progress "astonishing" and "remarkable." Even traditionally restrained publications have jumped on the bandwagon. "In spite of all his difficulties, President Salinas's performance has been near faultless," observed The Financial Times.

But Salinas, a former budget minister with a Harvard Ph.D. in economics who had never held elected office before, still faces a major challenge, one that has been largely overlooked by the media: democratization. Unless Mexico rids itself of the authoritarian, one-party system that has ruled it for 62 years, many of the spectacular advances in the economic realm may evaporate in the midst of social upheaval, as an increasingly urban, affluent, and well-informed population demands greater political rights.

Unfortunately, Salinas never really earned the presidency he assumed in December 1988. Although his ruling Institutional Revolutionary Party (PRI) officially received 50.9 percent of the vote in 1988 (the PRI's lowest total since 1926), outside observers agreed that the government-run Electoral Commission rigged the final tally.

The liberal Cuauhtemoc Cardenas of the Democratic Revolutionary Party (PRD) seems to have swept southern and central Mexico. The conservative Manuel Clouthier of the National Action Party (PAN) scored well in the north and with the middle class. Salinas may have even placed third, backed only by the bureaucracy and a few rural strongholds.

Immediately after the elections, there were a series of huge protests against Salinas's victory. But the country has come to accept the official results. Salinas's promise to institute democratic reforms and guarantee free elections may have placated the people.

But the promised reforms have proved illusory. The PRI has granted only one major local election—in Baja California—to the opposition. And the evidence of fraud in all elections continues to mount. "In all the time I have been working in the electoral business, we have never been able to collect as much proof of irregularities in the process as nowadays," says Jorge Alcocer, a PRD leader. He describes tactics ranging from last-minute changes to voter registries to the unsolved murders of four PRD observers.

Even the Organization of American States, in a rare stance, recently criticized the Mexican electoral process and sided with the opposition in various contested elections. And the most unsettling development is the death of Clouthier, who had become a very powerful force for change through his hunger strikes and post-election rallies. He died under mysterious circumstances in a midnight car accident on a secluded road, officially the victim of reckless driving.

Salinas has managed a delicate balancing act. On the one hand, he is modernizing and developing Mexico and bringing new optimism to his people. On the other, he is clearly exploiting his authority to remove his political adversaries.

"Police abuses, electoral fraud, the complete lack of a modern and clean system of administration of justice are not accidents or errors of the regime," writes Mexican commentator Jorge Castañeda. "They are a substantial part of the modernization of the authoritarian scheme, and they constitute the central contradiction in Salinas's avowed goals."

Perhaps Salinas thinks that only a single, unifying party can direct and control the country. But as the majority of Mexicans sample economic freedom for the first time in many years, the demand for political freedom will grow. Now that the economy is booming and public sentiment is once again genuinely favoring the PRI, a window of opportunity exists to convert the party into a real political organization with grass-roots leaders, divorced from the government and incapable of using intimidation.

That President Salinas has not chosen this path baffles some foreign analysts. Americas Watch, the U.S. human rights group, recently concluded that "this pattern of excessive violence and abuse can only mean that either the Mexican government endorses it or that it has lost control."

Some argue that Salinas is indeed a true reformer but is waiting to establish democracy until his economic policies have produced a lasting effect. Opening up the political process too soon might interfere with the orderly execution of his restructuring plan and jeopardize the economic recovery. Robert Pastor, President Jimmy Carter's adviser on Latin America, says, "There isn't any question that President Salinas wants to modernize the party." It's all just a matter of time, asserts Pastor.

But others argue that democratization could actually further the economic growth that Salinas wants. "Democracy would return the initiative to society and would liberate the creative powers of the people," claims writer Octavio Paz, this year's Nobel Prize winner in literature. And Castañeda believes that "Salinas could implement real change in 24 hours.…He's just not doing it."

Indeed, a much-heralded PRI reform conference held in early September failed to establish any significant changes in the party structure. The conference defeated initiatives that would have kept the president from setting party policy and choosing candidates. Rodolfo Gonzalez Guevara, a long-time member of the PRI and a leader of the reformers, called the conference "the worst masquerade of its [the PRI] history," Gonzalez has since resigned from the PRI.

Opinion polls show that most Mexican voters would support Salinas if elections were held today. The 1988 election was more of a backlash against the PRI and its quasi-dictatorial ways than a rejection of its candidate or platform. This explains, in part, why the post-election turmoil failed to produce any real change. But it also underscores the importance people place on the electoral process itself. By failing to introduce real reforms Salinas endangers his party and his economic policies.

As long as Mexico's president continues to enjoy virtually unchecked power, freedom and progress remain vulnerable to the whims of politicians with no accountability. This can in turn give rise to any one of the three following scenarios, all of which spell economic decline: 1) Salinas's reforms could be quickly overturned by the next PRI administration; 2) rising political unrest could damage economic stability in spite of sound government policies; or 3) new, less able opposition leaders may be violently swept into office as the Mexican people, taking economic well-being for granted, simply get tired of impositions.

"We now live in a different Mexico," writes journalist Ernesto Teissier, author of the recent Mexican best-seller Never Again. "Changes will come peacefully or violently, but nothing will stop them."

Salinas has made real changes in the Mexican economy—changes that have benefited the country immensely. But his reluctance to give the people real democracy may ultimately jeopardize both those reforms and his presidency.

Julio Marquez, a Mexican citizen, is a 1990 graduate of the Harvard Business School. He is pursuing a career in Latin American finance.