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October 2002, Volume 9, Number 10

Mexico: Fox, Economy

President Vicente Fox, who has been in office since December 2000, used his September 1, 2002 Informe speech to call for more cooperation between Mexican political parties to enact his proposals to reduce poverty. Under newly refined measurements, 54 percent of Mexico's 100 million people live in poverty, with incomes of less than $4 a day.

Fox also complained that the US was focused too much on security after September 11 2001, and not enough on dealing with Mexico-US migration. Fox hoped that a "new relationship" with the US would lead to a regulated flow of Mexican workers into the US, and legal status for the three to four million unauthorized Mexicans in the US.

Texan Tony Garza, nominated to be U.S. ambassador to Mexico, called for an "orderly, secured and legal" northward flow of Mexicans that is "tied to our labor needs. It cannot be an amnesty program. It must be some sort of earned legalization ... that allows the path to citizenship." U.S. First Lady Laura Bush said during a Mexican visit that Bush and Fox "are going to meet again to try to revitalize and refocus the issue of immigration.

Fox appointed Candido Morales, who has both US and Mexican citizenship, to be director of the new Institute for Mexicans Abroad. Morales was born in Mexico, moved to the US at age 13, and is taking a leave of absence from the California Human Development Corporation to deal with the estimated 23 million Mexicans and Mexican-Americans living in the US.

Mexico's Supreme Court upheld the 2001 Law on Indian Rights and Culture, which amended the constitution to allow indigenous communities to apply their own traditional customs in resolving conflicts and electing leaders, to preserve their own languages and to decide whether land will be held communally or by individuals. Zapatista leaders expressed disappointment in the ruling. They had sued, arguing that last-minute amendments limited the right of Indian communities to collective use of natural resources, saying they must respect private-property rights of non-Indians who live in their midst. Mexico has about 10 million Indians.

Mexico has a problem with kidnappings. Many criminals kidnap the children or relatives of business people, and demand ransom for their return; the police are often involved. In most cases, ransoms are paid and the police are not contacted. Crime was relatively rare in Mexico until the mid-1980s, and rose sharply with the economic crisis of 1995. Mexico has joined Colombia as one of the Latin American countries in which kidnappings have become almost routine. Mexico's Industrial Chamber of Commerce says that, instead of investing in factories, many firms are investing in security.

Economy. Mexico's Population Council in September 2002 reported that remittances were $8.9 billion in 2001, $24 million a day, up 35 percent from $6.6 billion in 2000 and $4.2 billion in 1996.

A profile of a two-working parent, two-children Mexican family earning $24,000 a year concluded that the incomes of teachers and engineers, nurses and small businessmen rise and fall with the value of the peso, interest rates and the unemployment rate. The richest 10 percent of Mexicans receive 40 percent of Mexico's income; the poorest 50 percent receive $4 a day or less. The 40 percent in the middle class earn an average of $1,000 a month.

In terms of economic growth and personal income, the 1980's and 1990's were "lost decades," and the Mexican middle class responded to the cycles of crisis by sending women and children to work and by incorporating members of their extended families into their households. About six percent of Mexico's professionals migrated to the US in the past 20 years.

Power plants are being built in Mexico to supply the US with electricity. One article described "energy maquiladoras" as the third phase of economic integration- first labor migration, then assembly plant maquiladoras, and now producing electricity in Mexico because it is cheaper, even though two new plants in Mexicali will use natural gas from Texas and send most of the electricity they produce to California.

Guatemala has followed Mexico's lead and begun to issue a form of matricula consular so that its citizens in the US can open bank accounts and cash checks.

Deborah Kong, "Mexico Names Man to Direct," Associate Press, September 19, 2002. Tim Weiner, "U.S. Will Get Power, and Pollution, From Mexico," New York Times, September 17, 2002. Ginger Thompson, "Free-Market Upheaval Grinds Mexico's Middle Class," New York Times, September 4, 2002.