Mexico News and Analysis: October 19-25, 2009

1. SME convenes national resistance movement
2. Federal Budget debates
3. Chiapas cancels elections
4. calderon allows cultivation of GMO corn
5. US arrests cartel members


1. SME convenes national resistance movement
The Electrical Workers Union (SME) convened a meeting this weekend to plan national resistance against President Calderon’s recent closure of the public utility Central Light and Power (LFC), which left more than 44,000 SME members suddenly unemployed.  Labor and social leaders, meeting in Mexico City, called for a series of actions beginning October 30, including street and highway closures, office blockades and educational efforts.  A general strike was also on the agenda, though a date will not be established until a meeting on November 5. 

Negotiations between SME and the Calderon administration broke down on Monday after federal authorities refused to discuss the possible re-opening of LFC.  Low level federal authorities without decision making power represented Calderon.  Labor leaders accused Calderon of stalling for time while pressuring unemployed SME workers to settle with the government on severance packages. 

Public opinion polls are slowly changing in favor of the SME workers as new information emerges on the Saturday night police action that closed more than 100 LFC installations.  Administration officials defended the closure as a cost saving measure, citing more than US$3 billion in annual federal subsidies.  But it turns out that the subsidies go directly to another government owned utility, the Federal Electric Commission (CFE), which charges LFC at rates almost three times what LFC is allowed to charge its customers.  In addition, many federal offices and politically connected corporations don’t pay electric bills, including President Calderon himself.  More than half of LFC’s 44,000 employees were hired under PAN administrations since 2000, and PAN appointees run LFC, which calls into question claims by the Calderon administration that workers are inefficient. 

A small group of dissidents within the SME, lead by Treasurer Alejandro Munoz and aligned with the PAN, called for new negotiations with federal officials.  Munoz is willing to accept the closure of LFC and wants to negotiate jobs for SME members within the CFE, which will run LFC.


2. Federal Budget debates
PRI and PAN Deputies from the lower house reached an agreement this week on President Calderon’s controversial budget that would include substantial tax increases.  The agreement calls for increasing income taxes from 28% to 30% and sales taxes from 15% to 16%.  The agreement would also impose a 3% tax on telephone service and increase taxes on alcoholic beverages.  However, PRI Senators immediately rejected the agreement, and opposition parties attacked increased taxation as the wrong recipe for economic recovery in the midst of the worst depression since the 1930s.  Calderon is trying to apply classic neoliberal policies by keeping the budget nearly balanced, while most other countries are attacking the depression with increased government stimulus spending.


3. Chiapas cancels elections
Chiapas canceled mid term elections scheduled for 2010, leaving hundreds of state Deputies, Senators and municipal authorities to serve two additional years.  The measure, which passed behind closed doors last month, came to light only this week.  Politicians defended the change as a way to save money.


4. calderon allows cultivation of GMO corn
The Calderon administration will allow cultivation of genetically modified corn for the first time on Mexican soil, which could put thousands of native varieties in danger of contamination.  The Secretaries of Agriculture and the Environment issued two permits last week, from among 35 applications, for experimental plantings.  Genetically modified crops are engineered by introducing changes in the DNA of seeds, often implanting animal genes. GMO crops can alter other seeds through pollen contamination carried by winds, and scientists are not certain of the long term health effects from consumption of GMO foods.  Mexico is the birthplace of corn with at least 55 native varieties grown on about one-third of the tilled land in the country.  Two studies conducted in recent years indicate that GMO corn has already contaminated some native varieties, though it’s not clear if the contamination is the result of wind-carried pollen, seeds imported by migrant workers or a combination of the two.  Transgenic corn is especially threatening to small subsistence growers who save their seeds from year to year.  Transgenic corn contains a terminator technology that produces sterile seeds, forcing growers to buy seeds each year from one of four transnational corporations. 


5. US arrests cartel members
US federal agents arrested more than 300 people this week associated with La Familia, the Michoacan-based cartel that has become the most violent in Mexico.  Arrests were announced in 38 cities.  La Familia, founded in 2004, is a combination cartel and religious cult that sells narcotics, mainly methamphetamine, in the US while prohibiting sales in Mexico.  The income is sometimes used for community development programs, giving La Familia a sort of Robin Hood image in rural Michoacan communities.  The cartel is also infamous for its violent responses to law enforcement efforts.  After the July arrest of one of its leaders in Mexico, the cartel killed 18 police officers and two soldiers, with many of the bodies showing signs of torture.