MIGUEL DE LA MADRID, 1982-1988

On September 25, 1981, labor leader Fidel Velazquez announced that the 1982 PRI presidential candidate would be Lopez Portillo’s friend and disciple Budget and Planning Minister Miguel De la Madrid. As was the case with his two immediate predecessors, De la Madrid had received a law degree from the National University and had never been elected to public office. As would be the case with his two immediate successors, he had received an advanced degree from an Ivy League university (a master’s in public administration from Harvard).30

De la Madrid, an uninspiring speaker lacking the faintest glimmer of charisma, set out on a conventional PRI-style campaign. On the campaign trail, he emphasized that his administration would eliminate public corruption and modernize, but offered few specific solutions to Mexico’s pressing economic problems. His was the first Mexican presidential campaign to rely heavily on television, a medium that repeatedly broadcast his interviews.31

As a result of the 1977 political reform, which made it easier to register new political parties, seven parties fielded presidential candidates in 1982. However, this reform did little to redress the imbalance between the PRI and the political opposition. While the government distributed $20 million to opposition political campaigns, the PRI spent an estimated $300 million on its own

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Campaign.

The 1982 economic collapse tainted both De la Madrid and the political system. The PRI candidate received only 70 percent of the vote, the lowest the official party had received in its history. Despite this decline, the PRI remained firmly in control of the electoral scene. Its candidates for the Chamber of Deputes won 299 of the 300 directly elected seats. To increase voter turnout, television broadcasts of World Cup soccer games were suspended during the election to prevent voters from watching the games rather than voting.33

Upon taking office, De la Madrid faced rampant inflation, a huge budget deficit, massive foreign debt, collapsing oil prices, a shrinking economy, and growing labor unrest. He had little leeway in dealing with these problems since at the time of the 1982 economic crash, the Mexican government, in exchange for its IMF loan, had agreed to raise taxes, lower subsidies, reduce the budget deficit, cap wage increases, and limit public-sector borrowing.34

De la Madrid reduced public investment and lowered subsidies for a wide range of goods and services, including foodstuffs, electricity, health care, and the Mexico City subway. As a result of decreased subsidies, between May 1984 and December 1985, the price of bread increased by 60 percent, that of tortillas by 48 percent, and that of sugar by 61 percent. Finally, in a measure supported by the government-dominated trade union federation, the Mexican Workers Federation (CTM), 1983 wage “increases” were limited to 40 percent while the rate of inflation reached nearly 81 percent. This last measure was aimed not at deficit reduction but rather at regaining business support.35

De la Madrid’s recovery program notwithstanding, the overriding economic issue became paying interest on Mexico’s huge foreign debt, even if that meant sacrificing domestic consumption and investment to stimulate exports. The sale of these exports provided the wherewithal to make annual interest payments of $13 billion. Reduction of debt principal was a financial impossibility.

The economy shrank by 4.7 percent in 1983. On a per capita basis, it decreased 6.9 percent. An estimated 1 million Mexicans lost their jobs, many businesses closed, and most construction was suspended. The optimism of the 1950s and 1960s was replaced by despair.36

As if the economy were not enough to tax De la Madrid, his economic problems soon became political problems. Owners of small and medium-sized businesses began to defect to the PAN, and austerity undermined the PRI’s traditional labor and peasant base. To make matters worse, Mexicans quit blaming problems on presidents who as individuals made mistakes and began to question a system that put such power in the hands of a single individual. Despite difficult economic times and declining faith in the system, De la Madrid pledged to respect election results. This pledge, made at the beginning of his term, was a way to gain political legitimacy. As political scientist

Soledad Loaeza commented, “Since they lacked economic growth, they offered electoral democracy instead.”37

By the end of 1983, the PRI had lost mayoral races in the capitals of San Luis Potosi, Durango, Guanajuato, Sonora, and Chihuahua, as well the race in Ciudad Juarez, the sixth largest city in the country. These elections made it apparent that Mexico was becoming polarized regionally. On the same day that the PAN won the mayoral races in Chihuahua and Durango, the PRI won all fifty-two elections for legislative seats further south in the states of Campeche, Michoacan, and Zacatecas.38

The PAN’s sudden electoral strength in the north reflected the unity of the economic, political, and religious right. In response to the bank nationalization, business interests began to finance the PAN in the north while Catholic prelates criticized the PRI’s management of the country from their pulpits. The declining PRI vote also reflected the centuries-old antagonism between Mexico’s northern regions and what their residents perceived as smothering control by the highly centralized political system based in Mexico City.39

Under pressure from local PRI cadres and an embarrassing string of electoral defeats, De la Madrid returned to the PRI’s roots—election fraud. Labor leader Fidel Velazquez supported this shift, as did many traditional PRI stalwarts, noting: “We revolutionaries got where we are by bullets. Anyone wanting to remove us can’t do it with the ballot, they’ll have to use bullets too.”40

Beginning with the September 1983 elections in Baja California through the November 1984 elections in Yucatan, systematic government-managed electoral fraud became the standard operating procedure. In 1984, the PRI claimed victory in thirty-five of the thirty-eight municipalities in the northern border state of Coahuila.41

These electoral “victories” came at a high cost for the PRI. PAN members refused to play by the traditional rules of the game, which called for them to verbally protest PRI electoral fraud and then meekly wait until the next election when their participation would once again validate the process. Rather, a new generation of aggressive, militant PANistas raised the political ante. PAN protestors in Coahuila rioted and burned city halls in two of the cities where they claimed election fraud. Local police responded by firing into the crowds, killing at least two and wounding thirty-five. Army troops were sent in to control the situation. To maximize their coverage in both domestic and foreign media, PANistas would seize bridges across the Rio Grande to publicize their fraud charges.42

The 1985 mid-term congressional elections were vigorously contested. The PAN campaigned under the slogan, “We are the new majority.” Despite the presence of several dynamic opposition candidates, money and media overwhelmingly focused on the PRI candidates. The official vote count credited the PRI with 68.2 percent of the vote, down from 74.2 percent in the previous mid-term elections. Returns indicated that PRI candidates won in 289 of the 300 single-member congressional districts. The PRI remained strongest in rural areas, where it surpassed its national average by fifteen percentage points.43

These “victories” came at the cost of a further decline in PRI prestige. Going into the election, 55 percent of the voters felt the elections would be fraudulent. The many denunciations of fraud after the election only reinforced such skepticism. A Wall Street Journal article entitled “Mexico’s rigging elections hurts its image and its credit rating” reflected the tenor of the international coverage Mexico received.44

By 1986, rather than legitimizing the PRI, elections delegitimized it. This created a negative feedback loop since non-presidential elections increasingly attracted national and international attention, which increasingly exposed fraud, which increasingly delegitimized the PRI. This attention on PRI politicians, as essayist Carlos Monsivais observed, only highlighted their being “isolated and lacking in verbal, ideological, and cultural substance.”45

In response to the emergence of democratic regimes in South America and increasing media scrutiny during Mexican elections, in late 1986, Congress legislated yet another electoral reform in an attempt to enhance the regime’s badly tarnished democratic credentials. The new electoral law maintained the 300 single-member districts provided by the 1977 reform law, but increased to 200 the number of seats that would be allocated indirectly. The increased number of seats served one of the intended purposes of the law—image building.46

Another intended purpose of the law was guaranteeing continued PRI political control despite massive voter disaffection. The political elite realized the PRI might lose control of the Federal Electoral Commission, since each recognized political party was entitled to one seat on the Commission. As the number of parties increased, PRI control became more tenuous. To ensure PRI control of the Commission, the rules were changed to make the number of representatives a party had on the Commission proportional to its previous vote total. This rule change resulted in the PRI receiving sixteen representatives on the Commission, compared to the twelve received by all of the opposition parties combined.47

To ensure that the PRI would maintain control of the Chamber of Deputies, even if its vote total fell below 50 percent, the reform included a “governability clause.” This clause provided that if any party received less than 50 percent of the vote, but still received a plurality, it would be awarded sufficient seats from the 200-seat proportional representative pool to increase its representation in the Chamber to 50 percent plus one. Once the party winning the plurality (assumed by the drafters of the law to be the PRI) was guaranteed a majority, the remaining seats would be awarded to opposition parties according to the percentage of the vote they received nationwide. This brazen move to cling to power was opposed by both the political left and right.48

The shift in the allocation of proportional representation seats during the nine-year period between the 1977 reform and the 1986 reform highlights declining PRI fortunes. In 1977, seats allocated on the basis of proportional representation served to make opposition parties visible and ensure their continued participation in the electoral process. By 1986, such seats served to guarantee the PRI a majority in the Chamber of Deputies, even if its vote total fell below 50 percent.

De la Madrid’s orchestrating, or at least tolerating, of electoral fraud tarnished his image, as did a stagnant economy. Between 1983 and 1986, the number of job seekers increased by almost

3.7 million, while the number of jobs increased by less than 1 million. During De la Madrid’s term, the peso declined from 157 to the dollar to 2,280 as inflation ravaged the country. As a result of near-zero economic growth, between 1982 and 1988 per capita gross domestic product (GDP) declined by 15 percent. Not surprisingly, De la Madrid’s opening remarks at the 1986 World Cup soccer championship in Mexico City were drowned out by boos and whistles.49

Several factors—in addition to massive debt payments—retarded economic growth during De la Madrid’s term. Between 1982 and 1988, public investment declined by 50 percent while private investment declined by 15 percent. Decreased private investment resulted from a lack of confidence in government and excess production capacity. Despite receiving favorable treatment from the government, the business elite failed to return much of the capital that had fled Mexico during the last years of the Lopez Portillo administration. Rather, between 1983 and 1985, additional capital flight totaled $16 billion.50

De la Madrid shifted the fundamental economic assumptions concerning the Mexican economy. His administration abandoned the model of an economy oriented toward the internal market with the state stimulating production in a Keynesian fashion and protecting industry from foreign competition. Replacing the old model was the notion that Mexico should create an internationally competitive export-oriented economy. Foreign investment was to become the engine of growth. Such a model, often referred to as “neoliberal,” foresaw the government ceasing to direct energies and initiatives of society and instead simply regulating and overseeing growth. Allowing business to make most investment decisions represented a major shift in power from government to the private sector.51

Shifting the economic role of government was a substantial legacy in itself since it set Mexico’s economic agenda into the twenty-first century. De la Madrid’s successors implemented most of the changes required by the new economic model. Before he left office, De la Madrid did make significant progress at shrinking the federal government’s role in the economy. Public investment declined from 11 percent of GDP in 1981 to 3.4 percent in 1986. Between 1982 and 1988, privatization reduced the number of government-owned corporations from 1,100 to 412. However, since the large corporations, such as Pemex, were retained, the size of the government sector declined by only 25 percent during De la Madrid’s term.52