Our "Man in Mexico"
and the Chiapas Massacre
Mexico is a virtual trade colony
of the U.S.
by James Petras
Z magazine, April 1998
The massacre of 45 Indians in Chiapas
by government-sponsored paramilitary forces has to be viewed within
the broader context of regimes' vigorous implementation of the
socio-economic model and its growing political isolation within
Mexican society. While there was worldwide condemnation of the
massacre (over 58 cities and several parliaments in Europe) and
its perpetrator in the Mexican government, Wall Street, the city
of London, and other financial centers around the world have been
lauding the "economic recovery" and the 5 percent to
6 percent growth rate over the past two years. The polarization
within Mexico is reproduced overseas. The very essence of "the
model" is the attraction of investment based on lowering
living standards to cheapen the costs of the booming exports sector.
The policies that attract investors deepen poverty in Mexico:
the opening of markets has led to a flood of cheap imports, particularly
basic grains, while privatization has meant the sell-off of public
enterprises. The former has condemned millions of peasant producers
to poverty while the latter has led to the concentration of wealth,
the firing of hundreds of thousands of wage and salaried workers
and the growth of the informal economy.
While the Zedillo regime plunges ahead
with the "model" the governing party-state (the PRI)
suffered a humiliating and an unprecedented defeat in the Congressional
and municipal elections. It no longer is able to command a majority
in Congress for the first time in over 70 years. The PRI also
lost control over Mexico City government to the leader of the
leftist Revolutionary Democratic Party Cuathemoc Cardenas. Equally
important mass social movements among the peasants in the South
and the workers in the Central North are showing signs of active
organizing outside of the state controlled unions. The government
has responded by reaffirming the continuity of its socio-economic
policies and heightening repressive activity through the widespread
use of paramilitary forces.
Growth for Whom?
After the Mexican crash of 1994-1995,
the economy grew between 1996-1997. Growth was concentrated in
selective sectors of the economy and largely benefited a small
group of foreign and big national firms.
Apologists for the Mexican regime, both
here and in Mexico cite the growth of the economy (close to 6
percent) the size of Mexico foreign exchange reserves ($27 billion),
its growing exports (up 15 percent for 1997), and its booming
automobile motor exports and vehicle sales, up 15 percent and
41 percent respectively. Mexico, we are told, has passed the worst
of its debt crises and the near collapse of its economy and is
well on the way to recovery, with "sound fundamentals."
To ensure continued growth to guarantee
the continued flow of overseas funds and to consolidate foreign
investor confidence, President Zedillo appointed Jose Angel Gurria
as Minister of Finance, the position directly responsible for
negotiating with the international banks and U.S. Treasury. Outside
of government circles he is called the "Angel of Dependency,"
for his generosity with foreign investors and his willingness
to give free sway to U. S. police, military, and drug officials
within Mexico's borders. One top official at Nomura Securities
summed up Wall Street's euphoria upon hearing of Gurria's appointment.
"He's one of ours."
A critical perusal of the Mexican economy
reveals that severe problems continue to fester and make the recovery
very fragile. First of all, the agricultural sector continues
to stagnate. Per capita growth was negative. What agricultural
growth did occur was concentrated exclusively in the export sector
producing goods for the U.S. and Canadian market. Food imports
amounted to $20 billion dollars-low-priced corn, rice, and other
staples-which decimated small producers and made Mexico extremely
dependent on outside sources for basic food items that were and
can be grown in Mexico.
The massive decline of food production
is due to a sharp decline in bank credits (over 14 percent in
real time between 1995- 1997). And the overwhelming concentration
(over 90 percent) of credits to agro-business export firms. If
one compares state funding of agriculture between 1980 and 1996
the decline reaches 50 percent. U.S. agro-business' takeover of
the Mexican market at the expense of millions of peasants thanks
to free trade is clear from a reading of the trade data. Mexican
imports of basic grains increased five fold between 1986-96, from
$783 million to $4.5 billion in 1996. More than half of Mexico's
food imports come from the U.S. The same is true in cattle: Mexico
imported 35,000 tons in 1995; in 1996 it jumped to 150,000; and
As a result, Mexico has a negative agriculture
balance of trade of $1.2 billion with the U.S. Instead of exporting
goods, it is exporting impoverished peasants driven to bankruptcy
by the free market.
Even where Mexico has trade advantages
as with avocados and tomatoes, the U.S. has imposed controls and
restrictions on Mexican exports. Thus practicing a very select
brand of "free trade"-and increasing the trade surplus
while undermining Mexican farmers.
While Mexico has accumulated close to
30 billion dollars in reserves, much of it is based on short-term
high interest bonds, dependent on the regime's ability to keep
wages low, the workforce docile, and inflation down. The overall
financial situation is far from solvent. Mexico paid Clinton's
1995 loan by borrowing from other foreign sources. Thus the overall
debt continues high. While Mexico's short-term debt has declined
its overall debt increased 50 percent. Debt payments depend heavily
on oil earnings and oil prices are declining. The Asian crises
drives down demand and the mid-eastern oil suppliers pump out
more oil to compensate for lower prices. Internally the financial
picture is far from secure. State banking inspectors noted that
the amount of bad debts increased 102 percent in the last 3 years
and 23 percent of internal loans are overdue or non-functioning.
| Rising prices (the consumer price index has I increased two
and a half times between 1994-97) and declining incomes has translated
into overdebtedness. Heavy borrowing has led to an artificial
short term boost in consumer spending likely to be followed by
a sharp decline and a renewed financial crisis.
The current boom in auto motor exports
and auto sales in part is a recovery from the sharp two-year decline
of 1994-95. Mexico is the principle exporter of auto motors in
the world (1.1 million), an increase of 15 percent over 1996.
Large-scale new investments are expected over the next five years.
All of the auto firms are foreign owned and Mexican subcontractors
work for them. Many of the inputs (parts, raw materials, technology,
and research) are imported, thus limiting the positive effect
on the economy as a whole. Thus, while Mexico's exports increase,
its imports are growing even faster. The net commercial surplus
declined from $8 billion in 1995 to $1.4 billion in 1997. Meanwhile
Mexico's foreign accounts which includes all foreign transactions
(including debt payments) have been negative and increasing: the
deficit was $1.8 billion in 1995 and $6.6 billion in 1997. Looking
at the balance of service payments we find that Mexico has a $13
billion deficit-most of it going for interest payments on the
Mexico has become a virtual trade colony
of the U.S.: 87 percent of Mexico's exports go to the U.S. and
76 percent of imports come from the U.S.
The Angel of Dependency
To emphasize his determination to maintain
the lopsided dependent growth model, President Zedillo appointed
the above mentioned Jose Angel Gurria to head the Finance Ministry.
After learning of Gurria's appointment the Mexican newspapers
reported "euphoria on Wall Street," and a financial
advisor in the city of London gloated that "It couldn't be
Why does Gurria come so highly recommended?
First and foremost was his role in sabotaging a Latin American
debtors cartel that was in the process of being organized in 1986.
While the rest of Latin America's finance ministers were preparing
a | document to collectively I reduce the percentage of debt payments
to the overseas bankers, Gurria went ahead and signed a new agreement
with the IMF in which he committed Mexico to following a strict
payment plan. In the follow-up, he supported the strict subordination
of the Mexican economy to all the articles and clauses of the
IMF austerity plan, in effect becoming an unpaid functionary of
IMF policy makers. He was particularly generous in setting the
terms for the privatization of Mexican public enterprises, thus
providing speculators with prodigious windfalls.
More than any official in recent history
he has been instrumental in undermining Mexican sovereignty. While
foreign minister between 1995-1997 he abolished Mexico's traditional
respect for political asylum for refugees. He eliminated constraints
on the operations of the DEA, FBI, and CIA operatives in Mexican
territory (in the name of international cooperation).
Gurria ignored U.S. violations of the
NAFTA agreement regarding constraints on Mexican exports of tuna,
glass, cement, and the circulation of transport. While mouthing
rhetoric about greater trade diversification especially with the
EEC, Mexico has become even more dependent on the U.S.
Social Crisis Deepens
President Zedillo's economic strategy
is designed to lower living standards to attract U.S. capital.
When the speculative bubble burst in 1994, and billions in U.S.
capital fled, Zedillo and the Clinton administration designed
an austerity program which further depressed wages and drove out
Mexican competition. U.S. capital responded favorably. The result
was a flood of U.S. agricultural imports and the massive entry
of U.S. multinationals in the highly exploitative "maquiladoras,"
the assembly plants in the repressive wage zones (where labor
legislature is nonexistent and unionization is prohibited).
In early 1998 El Financiero (January 3,
1998), Mexico's leading financial newspaper reported that 67 percent
of the households in the rural zones were "extremely poor"-that
is they couldn't meet |their minimal basic requirements. Since
NAFTA was implemented and after the crash of 1994 and "structural
adjustment programs were implemented by Zedillo, salaries have
declined by 70 percent. Indicative of the intensification of exploitation
over the past year productivity rose in real terms higher than
any country in Latin America. Yet wages stagnated or lagged behind
the real rise in the cost of living. New jobs lagged behind the
growth in the labor force by a ratio of 3 to 1. For every factory
or wage job that was created, five workers turned toward the low-paid
informal sector where income is approximately 40 percent less.
The maquiladoras, the major source of factory work, now number
3,784 plants employing 963,199 workers, mostly women. Over 50
percent are U.S. or jointly owned by U.S.-Mexican capitalists,
43 percent by Mexicans, mostly sub-contracted by U.S. firms, and
the rest by Asian and European capital. The maquiladoras generated
$4.2 billion in sales in the month of October (1997) and overall
they generate 40 percent of foreign sales. The "recovery"
period (1996-1997) has been based on continued downward pressure
on salaries. Over the last 33 months salaries dropped 25 percent,
added to the almost 50 percent decline during the "crisis"
of 19941995. For Mexican labor the "crisis " has never
ended; the recovery has never begun.
If urban factory labor has provided the
cheap labor to fuel the return of the investors to the factories,
in the countryside the mass of rural labor has experienced greater
marginalization and exclusion: 34 percent of the rural laborers
receive no pay for their work; 32 percent receive salaries below
the minimum wage (30 pesos or $3.50 a day); 72 percent of the
rural households depend on outside income to satisfy basic necessities;
only 5 percent of the rural population receives any social benefits
(health insurance, pension, etc.).
The unemployment rate in rural areas is
34 percent. The decline of employment, the loss of land to unequal
competition with U.S. imports and by agro-business complexes is
keeping wages down, particularly in the south of Mexico. Agricultural
workers earn 18 pesos ($2) in Chiapas. Similar conditions are
found in the predominately rural states of Guerrero, Oaxaca, Michoacan,
and Vera Cruz.
Almost 80 percent of the new jobs are
in the low paid services that offer no security, no future, and
subsistence or below subsistence income. Zedillo's new model has
increased unemployed/underemployed by 71 percent and decreased
income by 70 percent. In the meantime, the state run "trade
union" apparatus, the Mexican Confederation of Labor (CTM),
continues to hold wages to levels decreed by the regime. For 1998
the CTM endorsed the government increase of 14 percent, at least
5 percent below what independent economists estimate will be the
real increase in the cost of living. The CTM's main function is
to police the factories and collaborate with the police and bosses
in physically repressing independent unionists. In Chiapas the
CTM has supported the PRI officials responsible for the massacre
of the Indians.
The independent trade union, the Authentic
Labor Front (FAT), has pointed out that the "modernization"
of industry has meant more intensive exploitation, the elimination
of fringe benefits, and lower salaries. Bertha Lujan, general
coordinator of FAT, compared Mexican salaries to those of the
most economically backward countries. The Mexican model thus is
based on attracting capital on the basis of a captive low-paid
labor force, high interest rates, and unlimited access to Mexican
markets. This strategy of necessity requires the continued long-term,
large-scale suppression of wages and salaries, and massive displacement
and impoverishment of small-scale peasant producers.
The Role of the State in the Massacre
When 45 Chiapas Indians, mostly women
and children, were murdered on December 24, the world was outraged:
demonstrations took place in at least 58 cities; the Italian and
Swiss parliaments condemned the massacre and the Mexican government.
The Zedillo regime at first tried to attribute the massacre to
internecine conflicts among Zapatistas, local bosses, and rival
religious sects. As independent accounts filtered into the media
and as the Zapatista reports came on the Internet, the truth began
to surface. Survivors named local officials of the governing PRI
party as the assassin. The response was immediate: the Italian
government called on the EEC to suspend negotiations on a proposed
Free Trade Agreement with Mexico. In Scandinavia and the Low Countries,
government officials demanded an investigation and punishment
of government officials. Even the State Department demanded a
"thorough investigation," though Clinton immediately
corrected the original version. The State Department followed
up with a statement "backing Zedillo's efforts to investigate
and punish the culprits." The Mexican government shifted
its line away from local vendettas to "local unauthorized
officials acting on their own." But with universal outrage
in Mexico, and with the majority opposition parties in Congress
plus the mayor of Mexico City demanding an investigation of the
responsibility among "higher ups," Zedillo forced the
resignation of the top federal official in charge, the secretary
of Gobernacion (a kind of interior minister equivalent to our
attorney general) Chuayffet and the governor of Chiapas Ruiz Ferro.
Zedillo also named a new foreign minister, ax-progressive Rosario
Green. He then convened meeting of ambassadors and consuls and
instructed them to clean up Mexico's image by "contextualizing"
the massacre-namely a return to the "local conflicts"
ploy-while exonerating the national government and its principal
policy instrument: the military high command.
This attempt to "isolate and localize"
the massacre, however, blew up when the Mexican weekly, Proceso,
published a confidential military document, detailing the federal
army's counter-insurgency program and its active role in organizing
paramilitary groups to attack Indian villages suspected of being
The organization of state-sponsored terrorist
paramilitary groups involved in the actual Chiapas massacre is
found in a key military document entitled "The Plan of the
Chiapas Campaign." Issued in October 1994 by the Seventh
Regional Military Command and designed by the Secretariat of National
Defense, its authors were General Antonio Riviello Bazin and the
Commander of the Seventh Region with headquarters in Chiapas,
Miguel Angel Godinez. The key object was "to cut the support
relation that exists between the population and the law-breakers."
To that end the document advises that Military Intelligence "secretly
organize certain sectors of the civil population, among them cattle
ranchers, small property owners, and patriotic individuals who
would be employed in support of our operations."
The army would be in charge of the "advising
and supporting of the self-defense forces and other paramilitary
groups. In situations where self-defense forces don't exist, it
is necessary to create them." The purpose of the state-sponsored
paramilitary groups was to terrorize the Indian villagers and
displace them to areas under state control. "The relocation
of these bases of support to other areas will leave the Zapatistas
without these essential elements and will lower the morale of
the subversives once they are separated from their families."
The military high command was responsible, according to the document,
for "exercising leadership, co-ordination and control over
all the public security forces, making them responsible for the
elimination of urban commandos and the disintegration or control
over the mass organizations." Since 1994, this counter-insurgency
strategy, obviously derived from U.S. low intensity military doctrine,
has been systematically applied. Early in 1997, the army organized
five training camps for military forces in the region of Chenalho
(Chiapas) where the massacre took place. As a consequence, seven
paramilitary organizations have emerged under military protection
and support. In line with Pentagon psychological warfare techniques,
the Mexican military has provided euphemistic names to cover their
bloody deeds: "Peace and Justice" (this was the group
that murdered the 45 Indians), the Anti-Zapatista Revolutionary
Indian Movement, the Red Mask, the Saint Bartholomew of Lomas
Alliance, the Chinchulinos. They are led by local PRI politicians
(mayors, party leaders, and even federal deputies). Behind military
I lines they have assassinated scores of Zapatistas with impunity,
until I the latest massacre I forced the government to ! look
for a sacrificial lamb. The ongoing military confrontation is
made out to appear as a conflict between "local peasants"
when in fact it is the handiwork of a carefully designed military
strategy. Already over 6,000 pro-Zapatista villagers have been
forcibly displaced, as the document outlined, to areas under military
control. Selective assassinations and total destruction of homes
and crops is accompanied by theft of any household or farm utensils
which are handed over to local PRI peasants. A week after the
major massacre, Peace and Justice pares murdered a Tzotzil Indian
leader in Tila, not far from the massacre site. After executing
him the 90 terrorists left accompanied by state public security
forces, according to a report in El Financiero. Two weeks previously
the same pares entered the village and announced they would kill
the villagers "one by one." In the immediate aftermath
of the massacre, the Federal Army invaded several Indian communities
and terrorized the population, ostensibly in search of arms. In
Altamirang, the president of the community informed a mediating
committee of notables that the army "totally destroyed the
houses and robbed electrical appliances." The governor of
Chiapas was continually informed of the "operation"
(read: massacre) while it was going on and expressed his support,
in a message transmitted from the governor's offices. The secretary
and sub-secretary instructed the police to back the crime.
The counter-insurgency strategy in Chiapas
directly involves the president of Mexico and his new lieutenant
in Gobernacion, Julio Labastida, who co-ordinates the political
and propagandistic line while the military actions are directed
by the Army. The psychological warfare strategy involves "talking
peace and preparing war" (as sub-commandante Marcos calls
it). The purpose is to convince international public opinion of
Zedillo's peaceful intentions and to neutralize national opposition.
The contrast between Zedillo's rhetoric and behavior is striking:
while talking about a peaceful, negotiated solution he sent 4,000
more troops to Chiapas with U.S.-supplied helicopters to occupy
and/or surround Indian villages sympathetic to the Zapatistas.
The army in turn has fanned out on search and destroy missions
in EZLN jungle areas which, up to recently, were off limits to
the army under a common government-EZLN cease fire agreement.
Clearly the purpose is to force a military confrontation.
Zedillo announced that he was sending
his emissary, the secretary of Gobernacion, Francisco Labastida,
to negotiate with the progressive bishop of Chiapas, Sammuel Ruiz.
At the same time the Army Command claimed to have intercepted
messages between the bishop and the EZLN. They accused Ruiz of
taking orders from Marcos. The "good cop, bad cop" ploy
allows Zedillo to declare himself the "mediator." In
fact, the conflict is not between local groups or a military versus
guerrillas confrontation but a political I struggle between the
Mexican regime headed by Zedillo and the EZLN. Zedillo's effort
to involve other forces and position himself as an outsider convinced
nobody but served as a diversionary tactic to resist negotiating
with the EZLN.
It is clear that the paramilitary forces
are an arm of the federal military. The latter is closely tied
to the Zedillo regime's strategy of destroying the EZLN without
provoking a major battle that would frighten foreign financiers
and investors. Zedillo has opted for U.S.-style low intensity
warfare relying on paramilitary forces. Zedillo's food aid for
Chiapas is channeled directly toward PRI loyalists and used to
disarm and recruit local Indians to do the machete killings at
the behest of the political leaders of the PRI.
Zedillo's call to disarm the EZLN is an
invitation to a greater massacre, since all of the victims were
unarmed peasants, including women kneeling in church.
General Mario Renan Castillo who was in
command of the Seventh Military Region (including Chiapas) is
a graduate of Fort Bragg's Special Operations and Special Forces
program. He was an eager consumer and practitioner of the Special
Forces doctrine that was applied in Vietnam which emphasized the
creation of paramilitary groups to "clean the territory"
of subversive terrorists. Renan Castillo took seriously the lessons
of the field manual, especially the chapter on "Internal
Conflicts" which read "Paramilitary forces are organized
to provide popular self-defense. They operate in their place of
origin. They can be full-time or part-time depending on the situation.
They aid the forces of order. Together with the police they separate
the insurgents from the people to prevent them from mobilizing
popular forces or resources. The regular armed forces are the
shield behind which they develop. After the consolidation of a
military campaign, the local paramilitary forces can assume security
and avoid the return of the insurgents." Since 1996, the
Pentagon has established a special forces training program for
300 Mexican officials. In 1997, 1,500 Mexican military officials
passed the elite training program for rapid response. Special
rapid action forces and U.S.-supplied helicopters and surveillance
planes are in place for "surgical strikes. The U.S. choppers
are constantly hovering over Zapatista villages. The anti-narcotic
military training has been converted into an instrument to repress
the impoverished villages of Chiapas.
U.S. military doctrine and training of
the repressive forces accompanies U.S. support for the free market
economic policies of President Zedillo. The massacre in Chiapas
highlights the real meaning of U.S.-Mexican cooperation; free
markets and machine guns. On the other side of the barricades,
the continued struggle of the Chiapas Indian communities, their
growing allies in the countryside in Mexico City and overseas
represents another kind of international cooperation: popular
solidarity in defense of autonomous self-governing communities.
Central America watch