MEXICO

Within the framework of neo-liberalism and the Free Trade Agreement (NAFTA)

Introduction

For Marxist-Leninists, the theoretical analysis of the current situation or of any other aspect of reality does not mean an "investigation" as merely an intellectual hobby, confined to describing facts and to giving empirical, positivist information in order to construe a seemingly neutral picture, such as is offered in the bourgeois university and intellectual environment. Being revolutionary and totally critical with respect to bourgeois society, Marxist-Leninist theory breaks with all the traditions of the bourgeois way of thinking, not for the sake of useless theoretical disagreements but for the particular perspectives of communist theory and its revolutionary content.

The Marxist-Leninists' theoretical efforts are not limited and developed in a little closet or study in order to be converted into an end in itself, for the sake of the author's own conceitedness. On the contrary, for the working class the communists' theoretical efforts serve to clear the way for emancipation. From that point of view, this theory does not belong to the authors themselves but to the revolutionary movement as a whole.

Without material reference and without reflection on the practice and needs of communism -in the sense of not serving to give answers to the problems the communist revolution is confronted with ­theoretical analyses will inevitably lapse back into the framework of the reproduction of capitalist relations and will not serve to destroy them. This is reflected, too, in petty bourgeois authors and university intellectuals who have no interest in changing in any way the system that they benefit from. It is the same with the "marxologists" who elaborate their brave analyses of the evolution of the class struggle.

Strikingly, Marx said that his discovery of the class struggle was no great contribution as, before him many bourgeois intellectuals had discovered and described the class struggles. His big contribution consisted in deriving the historical necessity of the revolutionary dictatorship of the proletariat from the analysis of capitalist reality.

"What I did that was new was to demonstrate: 1) that the existence of classes is merely linked to particular historical phases in the development of production, 2) that class struggle necessarily leads to the dictatorship of the proletariat, 3) that this dictatorship itself only constitutes the transition to the abolition of all classes and to a classless society." (Marx, letter to Weydemeyer, 5th March 1852)

The bourgeois "marxologists" and theorists are able to make "profound" descriptions of current reality but we have to distinguish clearly between those who make "critical" studies and a real communist theorist. The "critics" and "marxologists may be able to make a description of the manner in which capital is generated and is developing and certainly they detect some calamities of capitalism in the same way that some article writers describe them every day in liberal periodicals, or make investigations paid for by some philanthropic institution or other, but limited description and detection of some contradictions of capitalism is not revolutionary by itself, but rather confuses the letter of Marxism-Leninism with its spirit. They forget that the core of Marxist-Leninist theory is its revolutionary perspective, the perspective of total - theoretical and practical criticism of bourgeois society. In other words, it demands the struggle for communism. It is not satisfied with enunciating communism scholastically or formally in order to feel important. The decisive factor is the practical conclusions which flow from Marxist-Leninist theory. This is because the historical necessity of communism may be visualised but it is not enough to enunciate it in an abstract and formal manner. On the contrary, it is necessary to work for the construction of the party of the working class. The struggle for the socialist revolution is required, and this is not won in a lounge or in a classroom or cafe in the manner of a bourgeois intellectual or "marxologist" who produces books in the same way as other people produce cars.

That is why Marxist-Leninist theory both analyses, criticises, demystifies and brings down the bourgeois idols, myths and dogmas, and also guides the practice which corresponds to the theory. That is why the theoretical spirit of Marxism-Leninism is inseparably connected to the ideology of a communist activist. It is only in this way that we can understand the fact that Marx, Engels, Lenin and Stalin drew important theoretical conclusions from their revolutionary practice, a question which cannot be resolved independently from the struggle of the working class or of its party: "... Theory stops having an object when it is not connected to revolutionary practice, in exactly the same way as practice is blind if revolutionary theory does not illuminate its way." (J. Stalin, Problems of Leninism, [Spanish edition] p.21)

In this sense, this paper, marking the 17th anniversary of the Communist Party of Mexico (Marxist-Leninist) aims to be a contribution towards the analysis of the current situation, helping to outline the party's tasks for the current stage and to make progress in a firm manner towards socialist revolution.

I. From the point of view of Marxist-Leninist theory, capitalism grows and develops in a contradictory manner, as it advances cyclically, with some periods of "boom" and other periods of full decay and decomposition. Such periods of contradiction are a product of the necessity to expand production for the accumulation of capital. But at the same time, as a result of the contradictions between forces of production and the relations of production, the bourgeoisie's growing difficulties in maintaining profit rates can be seen. Marx noted that the constant crises capitalism runs through "are always but momentary and forcible solutions of the existing contradictions. They are violent eruptions which for a time restore the disturbed equilibrium." (Marx, Capital, Vol. 111, Moscow 1972, p.249) but, above all in the imperialist phase, the development of capitalism has resulted in the fact that the economic crises are longer and longer in duration, more profound with respect to economic recovery, with more negative consequences for the working class and working people who have to bear the brunt of the crises. And they are more recurrent so that the time between a period of "boom" and "expansion" and a period of crisis becomes shorter and shorter whereas the threat of overproduction which is hanging over world economy has already become concrete.

II. On a global scale, capitalism is passing through a period of economic crisis which is only comparable to those which existed between the two world wars and the Great Depression.

After the rapid growth following the Second World War, this economic crisis, from which the imperialist superpowers are not excluded, has grown more severe since the middle of the seventies and especially since 1990. Japan, Germany and the United States and of course Mexico, which depends on Yankee Imperialism, are not exempt from the profound global economic problems.

One of the characteristics of the current global economic crisis is the restructuring of production. It is evident that the development of the productive forces has resulted in the stagnation or even decline in production of industries which played a decisive role for the development of capitalism (industries such as cars, electrical appliances, textiles, iron, oil production etc.), whilst "new" industries (such as robotics, bio-engineering, information technology, telematics etc.) are experiencing high growth rates and diversification. They are thus replacing the "old" capitalist industrial branches step by step. This process has provoked a hidden struggle for markets within the bourgeoisie. The expansion of monopolies has led to conflicts of a military character.

Another feature of the current economic crisis the tendency to "globalise" capital, which "exports" nothing but certain stages within the process of commodity production, in many cases intermediate intensive stages in the markets of imperialist countries. In an earlier period, the imperialist countries made investments in neo-colonial countries in order to produce commodities which result in the countries' final demand for receiving such capital.

Neo-colonial relations are thereby deepened by the "maquilization" of the production plant. (The so-called maquiladora industry is a "joint venture" industry situated near the frontier and consisting of US. American capital, know-how and management and Mexican cheap labour and soil. The capitalists receive high profits because there are no trade unions or environment protection laws binding on them; raw materials and machine tools are imported into Mexico duty-free from the US, the finished products return to the US at very low duties. Maquilization is the process of expansion of the maquiladora industry)*

By combining the formerly brutal and hegemonic expansion of parasitic capital (that is financial capital, which is the very bloodsucker of the working class, reproducing its profits in a staggering manner through speculation and the pillage of the economies of entire countries) with the expansion of the armaments industry and drug trafficking (which are parasitic industries, too), we get a general panorama of the current crisis on a global level. And the economic crisis in Mexico, though it may have certain particularities, does not escape from the general tendency of the crisis of capital in the imperialist stage, heralding future proletarian revolutions which no philosopher of the modern age will stop.

III. In Mexico, all the basic features of capitalism in its imperialist stage have developed: the contradiction between production and the concentration of capital in the hands of a mere handful of capitalists while the working class and the working people are struggling against exploitation, oppression and poverty. Big financial groups have sprung up which control branches of industry, agriculture and services.

In 1995, it is the big oligarchs who are gaining from the economic crisis. The difference between a handful of bourgeois and the masses of exploited and oppressed people is increasingly obvious. It is clear how there came to be a higher concentration of capital in the hands of a few people who, in practice, are the rulers of the country (in alliance with imperialism). And it is to their advantage that the NAFTA has been signed, that the Constitution (articles 3, 27 etc.) has been reformed, that some institutions (such as Coordinacion de la Seguridad Nacional) have been adapted, that it is intended that the army liquidate the EZLN, that democratic trade unionism (SUTAUR-100), the people's movement in the cities (FPFV, Vendedores Ambulantes) and in the country (OACIO-13, OCSS, FDOMEZ, ALDPCH) are attacked - all this in order not to endanger the neoliberal policies and in order to squeeze a higher profit rate out of the people.

It was through this process of centralisation that, under the protection of Salinas and Gortari and their regime, a Creole multimillionaire bourgeoisie has been established, the strongest in Latin America, second only to those of the United States, Japan and Germany. This is clearly shown in the following table:

Country             Number of capitalists with
                         more than 1.000 million $

United States                108
Germany                         46
Japan                              35
Mexico                           24

Table compiled on the basis of the data published in the periodical PROCESO No. 871.

By the time of the last devaluation (19th December 1994) the list of multimillionaires was reduced.

This does not imply that the tendency describe above would become invalid. Thus, of the 24 oligarchs who enriched themselves under Salinas' protection, the 10 "Mexicans" who remained in the long list of the richest bourgeois of the world are as follows:

1. Carlos Slim del grupo CARSO Y TELMEX
2. Emilio Azgarrago Milmo -TELEVISA
3. Jeronimo Arango Arias DEL grupo CIFRA
4. Lorenzo Zambrano de CEMEX
5. Alejo Peralta de IUSACEL
6. Alberto Bailleres of PENOLES
7. Alfonso Romo Garza
8. Bernardo Garza Sada de ALFA
9. Pablo Aramburzabala Ocaraney del grupo MODELO
10. Jorge Larrea Ortega del grupo MEXICO

Generally, the Mexican economy is moving according to the rhythm of the great national and international monopolies. This is an intrinsic feature of capitalism in its imperialist stage. During recent years, even the great monopolies belonging to the Mexican oligarchy have expanded on the Latin American markets in order to extend their production and to "compensate" for the decline of commodity consumption on the Mexican market, itself a result of the capitalist crisis. In this way, it can be seen that the great monopolies and the capital of the Mexican bourgeoisie are rushing towards the hidden struggle against the bourgeoisie of other countries in order to conquer Latin America.

Examples:

a) Bimbo: This Mexican monopoly owns industrial plants in Argentina, Chile, Costa Rica, Guatemala, El Salvador and Venezuela. They plan to invest 200 million dollars in that zone. Furthermore, in the last period, they invested 25 million dollars in order to start a new plant in Chile. In addition, Bimbo controls 86 % of the Mexican market and is, of its own accord, associated in some way with United States enterprises such as Band of Texas and 3 tortilla (maize cake) plants in the United States.

b) Dina: They will start with assembling and distributing the Fiat Uno car all over Latin America. In that business, Dina will hold 65 % of the capital of the new plant which they will erect together with the Italian company Fiat and the value of which will amount to approximately 300 million dollars. In fact, they are studying the possibility of building a production plant for trucks and buses in Argentina.

c) Cementos Mexicanos (Cemex): They hold 60 of the shares of the Venezuelan company Venclomos, and they have signed a letter of intent with the government of Nicaragua in order to purchase a parastatal venture with a capacity of 300 thousand tons per year at a price of approximately 10.7 million dollars.

d) Grupo Industrial Maseca: Evidently, they made profits by selling maize meal and tortillas abroad. Their growth was such that their sales grew by 64 in Central America but by just 5.4 % in Mexico.

e) Fomento Economico Mexicano (Femsa): In September 1994, they purchased a 51 % stake in the bottling plant of Coca Cola Argentina for one hundred million dollars, and that gives them the majority to decide on the future of this plant.

f) Grupo Situr: They will erect hotels in Costa Rica, the Dominican Republic and other states of the Central American region.

g) Bufete Industrial: They hold investments in Chile and Ecuador which represented 41.9 % of their income in the first trimester. And now they are competing for contracts in Nicaragua and Costa Rica.

In this manner, Mexico relies on a powerful national bourgeoisie. The fairy tale of supply and demand ruling the "free market" is nothing but hot air.

"The 500 companies (i.e. the biggest ones in the country) employ between them 13 % of the persons employed in national economic activities. 337 companies on the level of big enterprises between them account for approximately 30 % of the activities employed in this area... Furthermore, if we apply the above relation to the level of individual branches of industry today, the economic concentration we are talking about is much more relevant.

"For instance, we note that 6 companies out of the 1,044 which make up the car industry account for 62 of the people employed, whilst 10 companies out of the 133 which make up the iron and steel industry employ between them 42 %. 2 companies out of the 55 which make up the tobacco industry employ between them 44 %. 7 companies out of the 16,227 which make up the transportation and communication sector account for 54 % etc.

"Furthermore, if we look at this relation at the level of the individual enterprise, the economic weight of a handful of trade marks becomes evident. For example, General Motors de Mexico S.A. de C.V account for 42 % of employed labour in the motor industry, and Ferrocarriles Nacionales de Mexico account for 25 % of employment in their sector, while in their sector Altos Hornos de Mexico S.A. de C.V account for 15 % etc." (from EL COTIDIANO No. 59, Dec. 1993, p. 42-44)

In this sense, those who have gained from the NAFTA are finance capital, the big monopolies and North American imperialism since the commercial relations with the US represent approximately 83 of exports* and 71 % of imports, and 300 companies alone export 70 % of the national total (if we leave Pemex out of consideration).

On the other hand, while they triumphantly proclaim that Mexico exports more finished goods, the capital restructuring in Mexico is converting the country into a big US imperialist maquiladora factory. Over the last three years, there has been a decline in exports of commodities other than maquiladora products and the export of finished goods, which represented 16 % in 1988, sank to 12 in 1992. Over the same period, the export of maquiladora products grew by an annual rate o€ 10 %, and within three years these exports rose from 15 million dollars to 20 million dollars.

In fact, the employment offered by the maquiladora industry grew to 10.1 % in the first 1995 trimester, a tendency in contrast to the unemployment in the country's productive sectors which is a result of the deep crisis the capital system is suffering from. The bourgeoisie has had to recognise that more than 60 % of the Mexican productive plants are in recession and only 30% were able to leave the difficulties behind them in 1994.

But whilst the bourgeois government discriminated in favour of the maquiladora activities as an alleged form of industrialisation of the country, rescuing it from industrial bankruptcy, the only result has been the further deepening of the neo-colonial process and the initiation of further future crises, since the maquiladora is in a phase of the commodity production process that is characterised by economic control by the big monopolies (especially North American and Japanese ones). Thus, the maquiladora results in an even higher increase in the rate of exploitation of labour (particularly of female and child labour) and maintains a higher level of control over and decomposition of the working class. Furthermore, there is no transfer of technology: once again surplus value is passed into the hands of the imperialist bourgeoisie.

We note that, as a part of capitalist restructuring, the privatisations which took place during the last period were in favour especially of big capital and that more than 20 % of those companies sold by the state were passed into the hands of transnational capital as shown in the following table 1.

Table No.l: Evolution of the parastatal sector from December 1982 till May 1993

Year	state companies
1982	1155
1983	1074
1984	1049
1985	941
1986	737
1987	617
1988	417
1989	379
1990	280
1991	241
1992	217
1993	213

Compiled according to the periodical ECONOMICA INFORMA No. 234.

In this way, the role of the bourgeois state does not disappear in the economy in contrast to the claims of liberal intellectuals or social democrats, but rather takes other forms which guarantee that the internal and external markets function well in favour of large-scale finance capital and of the big monopolies. So the Mexican bourgeois state continues to play its role of guardian of the profits of big capital against all those opposed to its neoliberal project of privatisation.

Table No. 2: The Gains of Privatisation in Mexico

Group or company	Total	Principal area
Carso South Western Bell
Franct Cable and Radio	20	telecommunication
Vitro	8	electric line
Durango	6	forest
Siderurgia del Pacifico	6	Iron industry
Acero del Norte	14	steel production
Industrial Alfa	3	metal mechanics
Ispat Mexicana	5	iron industry
Mexabre	5	fish
Joaquin Redo y Soc.	4	sugar
Suerum	4	sugar
Beta	4	sugar
Ind. Escorpion	2	sugar
Anermex	2	sugar
Veracruz	3	sugar
Consorcio G	4	car transportation
Total	91

Compiled according to the periodical ECONOMICA INFORMA No. 234

In this cycle of capital accumulation and economic crisis, a sector of the dominant class, i.e. the so-called "national" bourgeoisie, has been displaced from economic and political power by the financial bourgeoisie and imperialism. In the period from 1982 till 1993 alone approximately 400,000 small and small companies were closed down. But that is not all. In the last years, just 157 textile companies out of the 1113 remained, i.e. 956 closed down.

According to statistical material published by the (trade union association)* Confederacion de Trabajadores de Mexico (CTM), 500 small and medium shoe companies stopped operating within the past few years. So the national bourgeoisie has been displaced from the economic power they had held in the past decades, and their position has deteriorated step by step from the eighties onwards. For this reason, their political representatives, the PRD (Party of Democratic Revolution)*, revisionist and Trotskyist sectors eagerly claim to reform the Magna Carta within the "limits of the constitution" but without the overthrow of the regime. They want to share power, "in an equitable and democratic manner", with the dominant sector from which they have been displaced. That is the origin of the political basis of their proposals such as the "Plan de Queretaro" (Queretaro programme)* presented in the third session of the Convencion Nacional Democratica (Democratic National Assembly)* and the governmental proposal of "Salvation Nacional" National Salvation)* presented by the PRD. Another myth widely propagated by the liberal ideologists is that in order to "escape from the crisis" which is shaking the country, foreign investment would be necessary since it has to create employment and a higher level of industrialisation. But the reality is quite different, since much more is invested in financial speculation because this results in higher profits than investments in productive sectors.

Thus in 1993, 33,300 million dollars came into the country through the capital account, 4,900 million for direct investment and 28,400 million for investment in bills which were invested in (securities of)* CETES Y TESOBONOS (obligations and treasury bonds)* because of the high interest rates offered by the state and their having been the basis of the current financial crisis. But in addition, direct investments, too, are a big business for the greedy mouths of the transnational capital.

So, in the first trimester of 1995 alone, the companies set up with foreign capital and resident in Mexico sent profits into their origin countries amounting to 352.8 million dollars, some 15 higher than the profits of the corresponding period of 1994, although Mexico is in a deep economic crisis. In this manner it becomes clear that the beneficiaries of the crises are domestic and foreign capital.

In the context of the current economic crisis, a deficit of 30,000 million dollars has been foreseen for 1995 through which the balance of payments deficit is perpetuated. This deficit has grown in a dizzy manner as is shown in the following table:

year	Payment balance (thousand million dollars)
1990	7.1
1991	- 14.9
1992	24.8
1993	23.4
1994	24.6

Source: Banco de Mexico, EL COTIDIANO No.66, p.108

The basis for all this is the low technological level of Mexican enterprises. For instance, in the manufacturing industry of the country, a negative balance has been accumulated, over the period from January to November 1994, in its commercial relations with foreign countries to the tune of 28 million dollars. This amount surpasses the total deficit of the commercial balance of Mexico during the same period. According to the (statistical institution)* INEGI, the manufacturing industry of the country (a sector which generates a quarter of the gross national product) sold products to the value of 22,000 million dollars abroad during these months but, in comparison, made purchases of investment goods, machinery and equipment from abroad amounting to 50,000 million dollars.

This imbalance of 28,000 million dollars is significant in that the industry made purchases of 2.27 dollars for each dollar they earned through sales of commodities overseas. The maquiladora industry, too, represents a big business for the bourgeoisie although only 1.5 % of the total of the investment goods employed in the maquiladora industry are of national origin.

In this context, the neoliberal recipes of the "Chicago Boys" tell us that the way to get out of the crisis is to tread a middle course between reduction of inflation, lowering the public expenditure and the upper limits of wages in order to increase the GNP The first has been achieved, since the upper limits of wages have been effective for the bourgeoisie through the collective agreements on working conditions imposed on the working class and other wage earners. Furthermore, indirect wages have been reduced through cuts in public services as public investment has fallen from 10.3 % in 1981 to 4.3 in 1993.

This resulted in a deterioration in services which contributed to the reproduction of manpower which, in this manner, invested a minimum for the survival of living labour. But the other side of the coin shows us that the bourgeois state is eager for the fray in order to suppress popular discontent since, although public expenditure has been reduced, on the other hand, the planned expenditure of the Seguridad Nacional (National Security)* which includes Defensa (Army)*, Marina (Naval Forces)*, Procuraduria General (Office of the Chief Public Prosecutor)* and Gobernacion (Department of the Interior)* in 1995 showed a total planned increase of 14.13 % in comparison with 1994. In the last year (1994)*, this item was allocated 11,183.4 million new pesos, and for the current year (1995)* the planned expenditure of the armed forces and police amounted to 12,764.4 million pesos.

Carlos Salinas de Gotari and his bloodhounds boasted about the alleged increase in GNP That is a lie. In reality, it suffered ups and downs, with a decrease in 1990 and a little increase in 1994 which was achieved at the expense of maximum exploitation and deterioration of the living standards of the working class and working people in general. But even in this way, the 1990 levels were not achieved in 1994, and certainly will not be in the current year (1995)* as is shown in table:

Gross year	National Product annual growth rates
1987	1.4
1988	1.4
1989	2.9
1990	3.0
1991	3.6
1992	2.8
1993	0.4
1994	2.4

The economic situation outline above has not changed since the usurpation of power by Ernesto Zedillo. On the contrary, the economic crisis has been aggravated, which has provoked a financial crisis.

With the devaluation of 20th December 1994 and the stock market crash of 21st December 1994, in which the "big fish" made the highest profits, the capitalists, seeing the first signs of instability which might affect their profits, run away with their capital in spite of their supposed "patriotic" values. The only homeland they know is profit.

Thus, during the period from October till December 1994, 10,107.6 million dollars left Mexico through "capital flight".

If we combine the above tendency with the dizzy increase in prices of commodities on the pretext of devaluation, we get a panorama which lets us understand how the worker's very low wages, having themselves fallen, have been affected.

The transactions of speculative finance capital, too, have a big market in Mexico since the investments of the national and foreign capitalists directly prepare the instruments of speculative investment, for example, interest coupons such as CETES and TESOBONOS. These represent a bigger debt for the country, and yet the state offers higher interest rates to those who will invest in these interest coupons. The recent loan from imperialism in truth represents a payment to the masters of finance capital who conspired with the government, which itself participates in this business at the expense of higher indebtedness and increased subjection to imperialism.

The collusion of the bourgeois state with finance capital is clearly observed in the increase in the purchase of treasury bonds which took place between November and December 1994, as shown in the next table.

In this way, the "assistance" by the IMF, North American imperialism, the central banks of Europe and Japan, and the International Commercial Bank etc., will stay in the hands of the big oligarchs such as Jorge Ballesteros, Adrian Sada Gonzalez, Carlos Gomez Gomez (Vicepresident of the Bankers Association of Mexico), Alberto Santos de Hoyo (Senator for Nova Leon) etc., since "the national and foreign holders of Treasury Bonds would, in the course of this year, receive 1,717 million new pesos in exchange for these securities which placed Mexico on the verge of insolvency and the national economy in the most acute crisis of the past 13 years." (La Jornada, 7th Feb. 1995

The following table shows the decline of the treasury bonds which took place in 1995:

Decline of treasury bonds in 1995