Mexico News and Analysis: June 22 - July 5, 2009

1. GNP to shrink 8% this year
2. New attack on Zapatista communities
3. Mexico’s mid-term elections – Corruption and abstention   


1. GNP to shrink 8% this year

Mexico’s Gross National Product will shrink 8% this year, the worst recession in 78 years, according to the semi-annual report “Economic Perspectives” published by the Organization for Economic Cooperation and Development (OCDE).  President Calderon will oversee a lost sexenio, due in part to his “modest” and unfocused economic stimulus package, according to the report.  The country will lose 588,000 jobs in the coming year, on top of the 550,000 jobs lost between March, 2008, and April of this year.  Six months ago, the OCDE anticipated 0.4% growth for Mexico in 2009, but the government’s draconian response to the influenza scare in combination with a worldwide depression forced the organization to recalculate.  The World Bank predicts a 5.8% decline this year while Mexico’s Treasury Secretary predicts a 5.5% decline.

Meanwhile, family remittances, the second most important source of hard currency, declined by a record 20% in May, in large part due to increasing unemployment among immigrant workers in the US.


2. New attack on Zapatista communities

Chiapas elites are inventing a new way to attack Zapatista communities – sell their land to third parties.  Baltazar Dominguez is the latest to employ this technique, selling hundreds of acres owned by the Zapatista community 16 de Febrero to a group of 12 private citizens.  Dominguez used to hold title to the land, which was liberated during the 1994 uprising.  The government indemnified Dominguez using state funds, but apparently he is selling the land using his original, but now invalid, titles.  The strategy is designed to create local disputes between Zapatista and non-Zapatista communities.


3. Mexico’s mid-term elections – Corruption and abstention

Mexico’s mid-term elections, scheduled for July 5, are turning into a referendum on the country’s corrupt and incapable political class.  About 70% of the 77.5 million potential voters are expected to abstain, with perhaps another 5% submitting blank or spoiled ballots, part of a rapidly growing null vote movement that crosses the political spectrum.  The economy and violence dominate the national debate, as President Felipe Calderon’s major policy initiatives are very much in play, particularly the deployment of 45,000 troops in many large cities and a decidedly tepid government response to the most severe economic crisis since the Great Depression.  All 500 seats in the lower House are up for grabs.  Calderon’s PAN holds a plurality with 206 seats, but the PRI is expected to gain significantly from their current 106 seats.  The dysfunctional PRD is likely to lose its position as second party in the lower House.  The election covers six governorships, including the key border states of Nuevo Leon and Sonora, plus 565 mayors and hundreds of local and state-wide posts.

On the eve of the election, accusations of vote-buying and illegal campaigning dominated national headlines.  The Federal Electoral Institute (IFE), a government agency that lost most of its credibility when its nine members, all affiliated with the PAN, seated Felipe Calderon as President in 2006, heard scores of complaints as it tried to wind up business before the Sunday election got underway.  The PAN accused future presidential candidate and current Mexico State Governor Enrique Pena of illegal campaigning while the PRI accused President Calderon of the same.  Both parties largely ignored the PRD, which is expected to do poorly in large part because of serious internal divisions that lead to contested internal party elections last year.  Everyone accused the Green Party, pound for pound perhaps the most corrupt political machine in Mexico, of illegal television ads.  And video scandals continued to surface.  Arturo Escobar, the PAN representative to the IFE, was caught carrying $1.1 million pesos, for which he could offer no explanation.  At least 1,000 boxes of food with the PAN emblem, apparently purchased with government funds and destined for illegal vote-buying, tumbled from a truck when it crashed in the state of Tamaulipas on Friday.