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THE FOX ADMINISTRATION THREE YEARS LATER

THE FOX ADMINISTRATION THREE YEARS LATER. Enrique Dussel Peters División de Estudios de Posgrado Posgrado en Economía UNAM http://www.dusselpeters.com Center for Latin American Studies University of California, Berkeley November 6, 2003. TOPICS. Introduction: a few Concepts

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THE FOX ADMINISTRATION THREE YEARS LATER

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  1. THE FOX ADMINISTRATION THREE YEARS LATER Enrique Dussel Peters División de Estudios de Posgrado Posgrado en Economía UNAM http://www.dusselpeters.com Center for Latin American Studies University of California, Berkeley November 6, 2003

  2. TOPICS • Introduction: a few Concepts • Mexico’s Socioeconomy prior to Fox • The Fox Experience (2001-2003): • Economic Trends • Policy and Political Issues • Conclusions and options/alternatives

  3. GLOBALIZATION (1)(“glocal” in space and time)

  4. I. SOME CONSEQUENCES (2) • EOI insufficient for innovation, development and growth of territories • Collective efficiency (Humphrey/Schmitz) and competition between networks of firms • New forms of industrial organization, segments of global commodity chains (Gereffi/Messner, …) • Systemic Competitiveness (meta, macro, meso and micro) (Meyer-Stamer/Messner), micro-competitiveness (Porter) is not sufficient • BUT: • Territory as the initial concept of socioeconomic development: conditions to achieve territorial endogeneity and competitiveness for the productive sector

  5. I. LIBERALIZATION STRATEGY (3) “Minimalist/Lean State” (horizontal / Neutral policies) Cheap labor power Import liberalization + Privatization Inflation LIBERALIZATION STRATEGY (1988- ) “dictatorship of Macroeconomy” Fiscal deficit Export-oriented Private manufacturing at center of strategy FI attraction

  6. II. Mexico’s Socioeconomy prior to Fox (1)

  7. II. Mexico’s Socioeconomy prior to Fox (2)

  8. II. Mexico’s Socioeconomy prior to Fox (3)

  9. II. Mexico’s Socioeconomy prior to Fox (4)

  10. II. Mexico’s Socioeconomy prior to Fox (5)

  11. II. Mexico’s Socioeconomy prior to Fox (6)

  12. II. Mexico’s Socioeconomy prior to Fox (7)

  13. II. Mexico’s Socioeconomy prior to Fox (8)

  14. II. Mexico’s Socioeconomy prior to Fox (9)

  15. II. Mexico’s Socioeconomy prior to Fox (10)

  16. II. Mexico’s Socioeconomy prior to Fox (11)

  17. II. Mexico’s Socioeconomy prior to Fox (12)

  18. II. Mexico’s Socioeconomy prior to Fox (13)

  19. II. Mexico’s Socioeconomy prior to Fox (14)

  20. II. Mexico’s Socioeconomy prior to Fox (15)

  21. II. Mexico’s Socioeconomy prior to Fox (16)

  22. II. Mexico’s Socioeconomy prior to Fox (17)

  23. III. The Socioeconomy Since Fox (1) • Socioeconomic Trends • Policy and Political Issues

  24. III.1. The Socioeconomy Since Fox (1)Total: 2001=-0.3, 2002=0.7%, 2003=1.5% (?)Manufacturing: 2001=-3.7%, 2002=-0.6%, 2003=-3.5%(?)

  25. III.1. The Socioeconomy Since Fox (2)(2001=-1.4%, 2002=-0.4%, 2003=-0.1%)

  26. III.1. The Socioeconomy Since Fox (3)(2001-2003/9: total = 372,000, manufac = -660,000)

  27. III.1. The Socioeconomy Since Fox (4)(2001-2003/8: 290,000 jobs lost or –27%))

  28. III.1. The Socioeconomy Since Fox (5)(2000-2002: loss of highest decile during crisis?)

  29. III.1. The Socioeconomy Since Fox (6)(2000-2002: a) Relative: poverty and extreme poverty increment, income of middle and high classes fell; b) Absolute: more than 2 mill. Households became poor or extreme poor)

  30. III.1. The Socioeconomy Since Fox (7) • 2001-2003: exports have not recovered • 2001-2003: real wages have not recovered • Economic Policy? • SHCP/Fco. Gil Díaz (et. Al): “only authority” • Frustration: even in business circles: Slim, Alfa, CANACINTRA, … • Agriculture? • Are there any trade policies left after NAFTA? • After 3 years of no employment generation, …? • Dramatic loss of competitiveness against Asia and Central America • Is there “life” after this primitive view of macroeconomy?

  31. III.2. Policy Issues (2001-2003) (1) • Expectation 1: Businessmen, efficiency, “getting things done” = implementation/policy action • Expectation 2: solution of Chiapas/EZLN • Expectation 3: Fiscal Reform • Expectation 4: Improve Relationship with the US • Expectation 5: Policy Transparency + closeness to people (“sí se puede”) • … See “equipos de transición” (June-December 2000)

  32. III.2. Policy Issues (2001-2003) (2) • Until October 2003, in general: • Several new Laws (Ley de Transparencia/IFAI; Ley de Servicio Civil de Carrera, …) • Little businessmen experience + overall policy-paralysis: Legislative is the New Point of Political Gravity • But: so far, no relevant political negotiations and decisions until 10/2003 … and up to 2006? • Relationship with the US: a) Dramatic changes since 11/09/2003, b) No migration act/pact and no negotiations beyond NAFTA

  33. III.2. Policy Issues (2001-2003) (3) • Some effects and topics: • Overall frustration and “new realism” after expectation raised by Fox during elections • Substantial recovery of PRI (despite internal crisis) and PRD • Elections in Cámara de Diputados, July of 2003 (compared with 2000): PAN: 202-153; PRI: 207-224 and PRD: 52-95 • Overall lack of strategy (priorities?) and implementation • Uncertainty in the relationship with the US (Cuba, Castañeda, UN/Aguilar Zínser, …) • Ability to change/redesign political strategy after electoral loss in 2003? Signs of ability to change? Very difficult … • Possibilities of a NAFTA-plus negotiation? Not after 2004 … • Will PRI support strengthening the Legislative power during 2003-2006 • Governors, another relevant power center? (AMLO, Murat, …) • Has the race for presidential elections (2006) already began? (AMLO, …)

  34. V. CONCLUSIONS (1) • Temporary imports to be exports cannot become the source of growth • In Mexico: overall socioeconomic and territorial polarization • Challenges: • Integrate Mexico’s socioeconomy and population to “glocal” segments • Employment generation, poverty and income distribution • Is there life beyond primitive macroeconomics? • In 2003: absolutely no consciousness of deep crisis of Mexico’s productive sector (CA, Asia, China, …) • High public and private institutional weakness

  35. V. PROPOSALS (1) • Socioeconomic priorities to overcome polarization? EOI vs. generation of competitive conditions for productive sector? Employment and growth vs. inflation? … • BUT: few options with current macroeconomic group of policymakers • Regional-sectorial integration to segments of value-added chains: financing + specialized personnel (see SBA, …) • Institutional strengthening (private and public): taxes, costs, specialized personnel, … • How will a 105 mill. country compete with CA and Asia/China? • So far, no response from Fox Administration, after 3 years • It should aldo be of concern of the US (?): employment generation, poverty, …: migration + …

  36. THE FOX ADMINISTRATION THREE YEARS LATER Enrique Dussel Peters División de Estudios de Posgrado Posgrado en Economía UNAM http://www.dusselpeters.com Center for Latin American Studies University of California, Berkeley November 6, 2003

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