Today's date:
Winter 2001

Mexico's Future-So Close to God, So Close to the United States

Vicente Fox, the new president of Mexico, was inaugurated on Dec. 1. He spoke with NPQ Editor Nathan Gardels in Mexico City.

NPQ | The Mexican writer Carlos Monsivais once said that because the system doesn't work in Mexico for the average person, "everyone becomes an opportunist." For the poor, the best opportunity is to head north. "Los Angeles is the heart of the Mexican Dream," says Monsivais. Indeed, one-quarter of the working population of your home state of Guanajuato has migrated to the United States. What will you do to bring the Mexican Dream back home?

FOX | To tell you what has built up Mexico's problems is also to tell you the solution, by fixing those problems.

Mexico's timing has been way off. We were late to democracy. We had 71 years of one government, one dictatorship. We have been late in making change in rural areas-we kept the community-owned ejido agricultural system for 90 years. We have been late in education-we have the same system created after the revolution in the 1930s. We were late to globalization.

Because of this we have had no growth in 25 years. We have the same per capita income we had then. For the past 18 years in a row, wages have lost purchasing power.

The end result has been expulsion-people going to look for opportunity somewhere else.

We therefore need an economy that grows at least 7 percent a year, but sustainably-because we have have been eating up our forests, our oil, our water and polluting the air. Environmental sustainability is key.

Also, growth is not enough. Wealth must be distributed. The way it works now, any growth goes to the few. Today, Mexico has some of the richest people in the world and companies listed on the Fortune 500. But we also have the poorest of the poor, one of the worst income distributions anywhere.

To grow we need to build our human capital, which means a revolution in education. And we will require financial resources, which must come from foreign direct investment since our own capacity is limited. Our future will depend heavily on this.
Above all, we need to establish security in Mexico, by which I mean establishing the rule of law to eradicate corruption and violence.

So, jobs, education and security. That is the program.

NPQ | That will bring the dream back to Mexico?

FOX | Twenty years from now. In the next six years, the length of my term, it will be difficult, if not impossible, to get that dream back. At least we can set Mexico on the right path.

NPQ | Though stagnant in recent decades, Mexico has also been politically stable because the ruling PRI (Party of the Institutional Revolution) incorporated all sectors of society-peasants, labor, business-under its wing after the bloody civil war of the 1910s and 1920s, then sealed their loyalty with patronage and corruption.
How will a non-PRI government maintain stability?

FOX | At first, in the 1930s, the dictatorship was very violent. Later, as you said, it kept control not by violence, but by other means.

Now, stability has to come from democracy, sharing power and broadened participation in building up the new system. So, you are going to see a president that keeps campaigning, that is very close to people. I need to be close to people in order to maintain that positive energy and sense of hope that came about after my victory on July 2. As long as we have a people with hope and a government willing to be accountable and responsible, then I can count on a 100 million-member team behind me. Such a team is unbeatable.

NPQ | The core of the system of corruption in Mexico has been the impunity of the president. Everything followed from that. The key to democratic change is thus ending that impunity. How will you do that? What will be the ripple effect?
FOX | How? I would say by my own will and desire. I just want to be a president who is not corrupt. Those who might doubt I would do it on my own can take comfort in the fact that, fortunately, we have a Congress where nobody has the majority. I don't have a majority of my party within Congress. So, it has the capacity, through the rule of law, to put this presidency under the constitution.

Beyond that, we are going to be a very transparent, accountable government. The days of the imperial presidency are over. We will open up information to the media and public opinion. The auditing authority of Congress will receive full cooperation and information from us.

NPQ | Very early on in his administration, Carlos Salinas also claimed an end to corruption and put the head of the oil union in jail. Yet corruption got even worse. Why will it be different this time?

FOX | Since so many considered his election fraudulent, Salinas needed to gain legitimacy after the election. So he made high-profile moves, like this arrest. But it was more show than anything else. Underneath there was no commitment to accountability. So, he disguised the real nature of his presidency with such theater.
We are not going that way. I am certain that in our first 100 days we will discover many, many irregularities and illegalities. We are prepared for that, which is why I have put together a very strong "law and order" team in the cabinet to clean up. Establishing law and order is one of the biggest mandates the Mexican electorate has given to this government.

NPQ | Bush and Gore have both rejected your proposal for a "North American Common Market" until the vast wage differential between Mexico and the US is narrowed.

In general, American political leaders oppose your idea of a "European-style" development fund for Mexico as "bureaucratic" and would leave it up to the market to bring the economies closer together.

Where does this proposal stand? What mechanism will bring about the convergence you envision?

FOX | First of all, the idea of a North American Common Market is a long-term view that I am proposing. It is going to be a process, a "NAFTA plus," walking step by step to a more profound integration over the next 25 years.

I know that maybe the country least interested in doing something like this is the US. The US feels that, on its own, it has been successful. It has wealth. It has technology. It doesn't need somebody else. But I think we need to introduce universal, ethical values-solidarity, friendship, equity-into the US relationship with Mexico.

It might seem the process of integration would only be to our advantage. It will bring investment, knowledge, technology and jobs to Mexico. But I think it is also going to be to the advantage of the US over the long haul. We have many assets that make it worthwhile uniting our interests, from natural resources such as oil to people.
Right now the US badly needs workers in order to grow. This is now accepted by labor unions, government, companies and investors, and even by Federal Reserve Chairman Alan Greenspan. He attributes the ability of the US to grow at 5 percent a year with very low inflation to migration.

Over the long term, we need consistency in this US-Mexico relationship. If you open the borders for products, services and capital as we have under NAFTA, you must open it up for the free flow of people.

This can never happen if we don't narrow the income gap between our two economies. Our proposal then is to work on an "economic convergence" program to narrow that gap, first by having the same interest rates, inflation rate and same level of government deficits.

If we can attain these same economic fundamentals, then the differences will start narrowing.

To get to that stage, we need investment resources. It is easy for the US to say, "get the resources on the market" because they can do it. But, for Mexico or other developing countries, that is very difficult. So, while we can get part of what we need from the market, we also must get part of what we need from foreign direct investment, part from the World Bank and the Inter-American Bank.
What we have proposed now is to also get funds from NADBank (the North American Development Bank). It is a banking institution that could play the role of a development fund, and not only for Mexico but for the US too along the border to modernize customs or for ecological protection. NADBank can also invest in developing infrastructure corridors-highways, railroads, electricity grids, airports-that run down from Canada, though the US and into Mexico. This will enable the greater and more efficient trade of goods, and even enable a North American energy grid where we share electricity and gas. If the US wants to ship goods out of, say, Houston or Dallas, the shortest, least expensive route is through Mexico to the port of Manzanillo and out to Asia.

Now, of course, in the US it is very difficult to use the European example. They don't have it clear, they think it is a failure. But, to me, the process of building up the European Community is an inspiration. It can show us how to go about integrating the US, Canada and Mexico.

If the new US president has any other idea, I certainly want to hear it. Every day the US complains or Mexico complains about the usual problems of drugs, migration or trade. Nobody has solved them. I'm proposing that we take the bull by the horns and solve these problems once and for all through a larger relationship. I don't want to waste the six years of my presidency talking about the same old issues and coming no closer to a solution than all the former presidents.

NPQ | Mexicans working in California repatriate some $8 billion a year to Mexico-an amount nearly equivalent to the $10 billion a year in foreign direct investment in Mexico. Isn't there a way to leverage that capital for development?

FOX | As governor of Guanajuato, I instituted a program to persuade the Mexican "paisanos" working in the US to save 25 percent of what they transfer to their families back home for productive investment, in small shops or factories. Usually, 100 percent of this cash flow from North to South goes into consumption.
In Guanajuato, the state government matched what they put aside for productive investment dollar for dollar. For example, if they raised $50,000, we would put in another $50,000. With $100,000 we could put up a "maquiladora" in their own community with 100 new jobs. In Guanajuato we put together 35 such projects. Now, we want to do the same thing nationally.

NPQ | While you are proposing a North American Common Market, Venezuelan President Hugo Chavez has advanced another model: Bolivarian anti-globalization that seeks to unite Latin America against North American neoliberalism.
In that perspective, aren't you executing an historic shift of orientation for Mexico away from Latin America toward the US?

FOX | Well, my proposal is 180 degrees away from Chavez, though I also have the Bolivarian dream of an American continent that is united and integrated. We are not only married to the US and NAFTA. We also have a free trade agreement with Europe. And with Singapore. We also have trade agreements with Central America, and we are negotiating one with MERCOSUR (Brazil, Argentina, Chile, Uruguay).
Mexico can thus work in either direction. I dream of putting together the four large economies of Latin America-Brazil, Argentina, Chile and Mexico. Together, these would be four big economic machines pulling all of Latin American upward.
In the 20th century, Latin America has been a loser. But, learning from our mistakes, with the new democracies we now have, with the new spirit, Latin America and Mexico will be winners in the 21st century.

NPQ | But you will be winners by casting your fate with the North, not against it.

FOX | Yes. It may be possible that five to eight years from now we have a continental trade agreement.

NPQ | Since the revolution, Mexico has always insisted on the principle of non-intervention and sovereignty above human rights. Now Mexico is considering extraditing an alleged torturer (Ricardo Miguel Cavallo) from the Argentine "dirty war." Will your administration be more concerned with human rights and international openness than previous Mexican administrations?

FOX | No doubt. We will advance in that direction. Human rights, democracy, protection of natural resources, women's participation in key government positions-that is where we are going. We will let our voice be heard when human rights are being violated anywhere in the world. We will be more open to extradition, like the Cavallo case from Argentina, and the case of ETA (terrorists) from Spain. We will take a more active position worldwide.

NPQ | What about Cuba?

FOX | We are going to keep our strong relationship with Cuba, which we think is the best way to bring them toward democracy and an open market. The US blockade is not the solution. The US has remained alone in this position, as Canada, Europe and the rest of Latin America invest there.

When I visited Cuba, I saw that 30 percent of its economy is in the market. My hope is that soon Cuba will be a democratic nation with a market economy.

NPQ | During the decades of Mexico's anti-clericalism and anti-gringoism, its woes were blamed on being "so far from God, so close to the US." Under Fox, a practicing Catholic proposing integration with the US, might we say the solution to Mexico's woes is being "so close to God, so close to the US."

FOX | I feel like that. It is a privilege to be a neighbor of the US. It is a strategic advantage for Mexico. Of course, we must keep our culture and values. At the same time we can work together much more closely. With respect to the US, these words are key to me: Let's be real friends, real neighbors and real partners. Then we will all gain.

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