AUT: Part 1, Mex Labor News, Jan 99

[Dan La Botz <103144.2651@xxxxxxxxxxxxxx>]

MEXICAN LABOR NEWS AND ANALYSIS         =

January 16, 1999                    =

Vol. IV, No. 1
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               About Mexican Labor News and Analysis
     =

     Mexican Labor News and Analysis is produced in collaboration
with the Authentic Labor Front (Frente Autentico del Trabajo -
FAT) of Mexico and with the United Electrical Workers (UE) of the
United States and is published the 2nd and 16th of every month. =


     MLNA can be viewed at the UE's international web site:
HTTP://www.igc.apc.org/unitedelect/. For information about direct
subscriptions, submission of articles, and all queries contact
editor Dan La Botz at the following e-mail address:
103144.2651@xxxxxxxxxxxxxx or call in the U.S. (513) 961-8722.
The U.S. mailing address is: Dan La Botz, Mexican Labor News and
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     MLNA articles may be reprinted by other electronic or print
media, but we ask that you credit Mexican Labor News and Analysis
and give the UE home page location and Dan La Botz's compuserve
address.

     The UE Home Page which displays Mexican Labor News and
Analysis has an INDEX of back issues and an URGENT ACTION ALERT
section.

     Staff: Editor, Dan La Botz; Correspondents in Mexico: Bob
Briggs, Robert Donnelly, Peter Gellert, Jess Kincaid, Jorge
Robles, Don Sherman.
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IN THIS ISSUE:
The Year in Review:
     *Mexican Political-Economic Year in Review: Crisis Continues
               by Robert Donnelly, Dan La Botz and Peter Gellert
     *Mexico=92s Labor Year in Review: UNT, the Pole of Attraction
               by Dan La Botz
Regular Articles
     *Mexican Teachers Arrested for Protest in Senate
     *Congress of Labor: CTM's Rodriguez Alcaine to Preside
     *Cananea Strike Continues, May Spread; U.S. Solidarity
     *Custom Trim Workers Win Decision: Will Breed Co. Comply?
     *Rank and File Wins in Nuevo Laredo City Workers Union =

     *INEGI Fires 270 Temporaries for Demanding Permanent Status
          - by Elyce Hues
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        The Year in Review
          MEXICO: THE ECONOMIC CRISIS CONTINUES,
          THE POLITICAL OPPOSITION GROWS SLOWLY

           by Robert Donnelly and Dan La Botz
             with help from Peter Gellert

     In 1998 Mexico=92s Institutional Revolutionary Party (PRI)
government proved unable to resolve the country=92s continuing
economic crisis, and  millions more Mexicans fell into extreme
poverty. As the world economic crisis worsened with the collapse
of Russia, the Asian depression, and continued uncertainty about
Brazil and Latin America, Mexico=92s conservative government and
its neo-liberal economic policies proved unable to move the
nation forward. Five years since the implementation of the North
American Free Trade Agreement (NAFTA), Mexico has not only failed
to overcome its economic problems, but for the majority of
Mexicans those problems have worsened.

                    Fall in Oil Prices

     While the 1995-1997 recession supposedly came to an end in
1998, with the official unemployment figures improving from 3.6
to 2.6 percent, still for most Mexicans 1998 will not be
remembered as a year of recovery, but rather as a year of
deepening depression. =

 =

     Once again as so often in the past, oil plays a central role
in Mexican developments. The Russian collapse and the Asian
economic crisis caused a fall in oil prices, one of Mexico=92s
principal exports and sources of revenue, leading the government
to cut the budget once again. In the last year Mexico=92s federal
and state governments slashed their budgets in the area of social
welfare programs, such as health and education. The fall in oil
revenue and government budget cuts have reduced employment and
weakened the internal market, leading to economic difficulties
for other industries and services.

     At the same time, stagnant wages and rising prices have
meant a further erosion of the Mexican workers=92 standard of
living. Prices for products such as gasoline, electricity, buses
and taxicabs, tortillas and milk have all risen dramatically in
the last year. Several studies by academic researchers, labor
unions, and government agencies have found that one half of all
Mexicans now live in extreme poverty. The economic crisis has
also meant a growth in the informal or underground economy =

illegal companies that pay no taxes, provide no health insurance
or retirement benefits, and do not pay minimum wages which now
employs an estimated 50 to 60 percent of all Mexicans.

                    Fobaproa Bank Scandal

     The economic crisis and attendant corruption also stood at
the center of politics. Federal lawmakers spent much of 1998
debating what to do about Fobaproa, the acronym for the
government's Bank-Savings Protection Fund, which was found to be
in arrears of more than 50 billion dollars in March. The fund,
akin to the U.S. FDIC, offered federal insurance on deposits and
was created shortly after the 1994-1995 peso crash to help
stabilize financial institutions and provide an incentive to keep
money in Mexico. Fobaproa, however, was disastrously misused by
bankers, such as Angel Isidoro Rodr=EDguez S=E1nchez, alias "El
Divino," and Carlos Cabal Peniche, who typically authorized
illegal loans to front companies, after which they personally
accessed the funds, and then defaulted.

     Importantly and unlike the FDIC, which provides a
100,000-dollar ceiling, Fobaproa offered no maximum amount for
how much could be insured. Debate took up much of the legislative
agenda, with the Zedillo administration suggesting that the fund,
which had accrued close to 12 billion dollars in interest by
Sept. 1, should be converted into public debt. The Party of the
Democratic Revolution (PRD) and the  National Action Party (PAN),
which together formed a majority in the Chamber, argued against
the proposal. The PAN did so because its ranks included many
failed investors, who wanted to see banks and bankers pay, and
the PRD because average Mexicans, traditionally distrustful of
big finance, had had no part in abusing the system. =


     Finally, in December, the PRI and the PAN passed into law a
plan that will supposedly fix the Fobaproa debacle by effectively
creating a second and similar fund. The bill seeks to force banks
and other financial institutions to cover the Fobaproa debt. The
so-called Bank Deposit Insurance Institute will ostensibly be
better managed and provide a cap on insurable savings at a
slightly higher maximum than the FDIC's. None of the original
Fobaproa monies were converted into public debt, but the
government still remains responsible for the funds, and several
years will most probably go by before the responsible parties pay
up. Current Finance Secretary Jos=E9 Angel Gurr=EDa will head the new
institute, while the nominations of other governors will have to
be ratified by Congress.

     One interesting sidelight with potentially far reaching
consequences is the PRD=92s accusation that the PRI=92s 1994 election
campaign was partially financed with huge contributions from
bankers who were later covered by Fobaproa in the form of
defaulted loans.

     For average Mexicans, wrestling with the day-to-day issues
of higher inflation and lower buying power the consumer price
index (CPI) finished the year at close to 20% over 1997 levels,
while officials authorized only a 14% increase in the minimum
wage Fobaproa was another example of the rich getting richer and
doing so by the government's good graces. =


     Particularly infuriated was the grassroots debtors movement,
which in 1998 was forced to contend with a Supreme Court ruling
that upheld the constitutionality of charging interest on top of
interest. Piquing tempers was the fact that some of the corrupt
and culpable bankers had been living abroad in luxury and were
able to return home without setting foot in a Mexican jail.
Former Banpa=EDs President Rodr=EDguez S=E1nchez, for example, was
extradited in 1998 after Spanish police seized his yacht in the
Mediterranean, but he has not been incarcerated as his crime is
not considered "grave," i.e. he didn't physically injure anyone.
He still faces bank-fraud charges, though.  =


     Toward the end of the year El Barzon, the most important
debtors=92 organization, showed its continuing political vitality
when it launched a new round of protest demonstrations, once
again surrounding banks and government buildings. Many El Barzon
chapters, made up of farmers and businessmen, middle class
professionals and some peasants, have joined the Party of the
Democratic Revolution (PRD). =


     Fobaproa also gave a boost to the PRD itself, which
capitalized on the public outrage. National leader Andr=E9s Manuel
Lopez Obrador, for example, organized a make-shift referendum on
whether the fund should be converted public debt a refreshing new
direction for a party which has tended in the past to put all its
eggs in the parliamentary basket. The response was, as might be
expected, overwhelmingly against the Zedillo proposal and helped
extend the party's reach to disaffected voters outside of the
metropolitan Mexico City area. Lopez Obrador said three million
people nationwide voted in the referendum. Also, PRD leaders
published the names of Fobaproa debtors, that is to say the
individuals, banks, and corporations that were at fault. The
PRD's position that the fund had been mismanaged by a gang of
speculators in cahoots with government officials coincided with
public opinion and helped the party.

     Despite its importance in the national dialogue Fobaproa
debt by September equaled almost half of the 1999 expenditures
budget President Zedillo did not mention it by name during his
annual Informe, the Mexican equivalent to the U.S. State of the
Union Address.           =


               Chiapas and the Zapatistas

     Another issue that received scant attention in the Informe,
presented on Sept. 1, was the on-going conflict in the troubled
southeastern state of Chiapas, where rebels have been fighting
for social justice and indigenous rights since 1994. This despite
the fact that the year began with news of the Dec. 23, 1997,
massacre of 45 Tzotzil Indians, almost all of them women and
children. The new year started out with accusations, later to be
found true, that pro-government para-militaries were responsible
for the slayings. Then-Interior Secretary Emilio Chuayffet and
Chiapas Gov. Julio Cesar Ruiz Ferro were forced to step down.

     Also, 1998 saw increased numbers of foreigners deported on
charges of so-called "political" activity. Twelve Americans,
Canadians, and Europeans, for example, were expelled on Easter
Sunday. Human rights monitors and independent observers said the
deportees were singled out for being pro-Zapatista, and in few
cases was the offending activity clearly explained.

     President Zedillo partially succeeded in politically
isolating the Zapatistas, making them a non-issue for the first
time in four years. Throughout the year, the administration could
point to its very public calls that rebels sit down with
officials at the negotiating table. Zedillo also could point to
the fact that the Zapatistas and leader Subcomandante Marcos had
failed even to respond to those missives. No doubt, though, the
government was engaged in behind-the-scenes machinations, such as
the summer's orchestrated dismantling of CONAI, the independent
peace commission headed by San Cristobal de las Casas, Chiapas
Bishop Samuel Ru=EDz Garcia.  =


     New Interior Minister Francisco Labastida Ochoa, who
replaced Chuayffet, exploited the government's position,
appearing frequently in newspapers and television to lament the
Zapatistas' lack of cooperation. The EZLN=92s spokesperson,
Subcomandante Marcos, meanwhile, released few communiques to the
media and those that he did sometimes opened themselves up to
misinterpretation. But the biggest breakdown for the Zapatistas
came when its leaders decided to abruptly cut short a scheduled
meeting with COCOPA, the congressional Chiapas peace commission
that includes PRD, PRI, and PAN deputies. The delay was blamed on
the fear that the Zedillo administration would try to infiltrate
the proceedings, but many expressed discontentment with the
Zapatista decision. Zapatistas and congressional representatives
did meet during the weekend of Nov. 21, but the government had
already successfully "spun" the EZLN's postponement as a sign of
unwillingness to resolve the Chiapas conflict. At the meeting,
Zapatistas made five conditions, including military withdrawal
from Chiapas and the freeing of political prisoners, before they
would meet with Zedillo administration officials. =


     Mexico received some criticism from abroad for its dealings
with the Chiapas Rebellion. In its annual Human Rights Report,
the U.S. State Department reported that "continuing violence in
Chiapas cast a shadow over the human rights situation." Assistant
Secretary for Democracy and Human Rights John Shattuck said
summary executions, torture, and illegal and arbitrary arrests
were major abuses. Human Rights Watch also charged in early 1999,
based on a two-year investigation, that Mexican police and
soldiers commonly kidnap, torture and murder people not only in
Chiapas but throughout Mexico.

     Nevertheless, Zedillo=92s political gambit proved largely
successful. Although there was a huge groundswell of outrage
immediately following the Acteal massacre, the prolonged
stalemate between the government and the rebels produced little
increased sympathy for the Zapatista movement among working-class
Mexicans. Moreover, inaccessible and vague statements hurt the
movement, while the government's very outward espousing of
peaceful negotiation as means to end the conflict, as well as the
resignation of Chuayffet and the naming of a special prosecutor
to investigate Acteal, turned the tables on the Zapatistas who
were pictured in the media as unresponsive, stubborn and,
ultimately, standing in the way of a resolution. The Zedillo
administration also succeeded in "spinning" the issue on
foreigners. The government cast foreigners in Chiapas, whether
they were human rights observers, priests, restaurant owners, or
teachers, as meddlesome outside agitators who were bent on
"pitting Mexican against Mexican," as Zedillo said in his
Informe. Opinion polls showed that half the population accepted
the government=92s xenophobic position, but this also reflects a
widespread sensitivity about foreign interference in Mexico=92s
internal affairs, and the vulnerability of the country=92s
sovereignty.

     The Zapatistas=92s attempt to create an independent, non-
partisan, non-electoral political organization, the Zapatista
Front for National Liberation (FZLN), failed in 1998 to become
the pole of attraction on the left which the EZLN had hoped.
While the FZLN organized chapters, carried out demonstrations and
began political projects in a few cities and states, it has not
so far cohered as a national organization. Moreover as an
opposition force on the left it has failed so far to compete
successfully with the growth in popularity of the Party of the
Democratic Revolution (PRD), El Barzon, or the new National Union
of Workers (UNT).  =


     Though the PRI-government, the Mexican Army and pro-
government paramilitary groups continue to put pressure on the
opposition in Chiapas, the EZLN appears to have dug in for a
protracted struggle against the government, and shows a
remarkable ability to continue to lead autonomous communities in
the countryside. The EZLN will try to overcome its isolation by
once again taking the movement to the Mexican people. The
Zapatistas plan to send 5,000 people on a tour of Mexico to build
support for their indigenous rebel movement, and the EZLN has
called for a referendum on March 21 on indigenous rights. The
EZLN will try to use the FZLN organizations, the tour, and the
referendum to build a national political current.

     In terms of organized labor, both the Congress of Labor (CT)
and the Confederation of Mexican Workers (CTM) continued to
decline in strength, while the new National Union of Workers
(UNT) (founded in November 1987) gained in influence during its
first full year, leading demonstrations and a national
workstoppage in December against the PRI=92s economic program. The
left wing May First Inter-Union Group (CIPM) and the National
Assembly of Workers (ANT) proved unable to challenge the UNT as
the leaders of the labor opposition. [See the article below.]

          Political Stalemate PRI in Decline

     The year saw growth for Mexico's opposition parties, which
took an absolute majority away from the PRI in the Chamber of
Deputies, while the PRD consolidated power in the Mexico City
assembly; and the PRD won some surprising elections. But 1998
also was a regrouping year for the dominant Institutional
Revolutionary Party, which has held the presidency in some form
or another since 1929. =


     The long-term tendency seems to remain the decline of the
Institutional Revolutionary Party (PRI). While the PRI regrouped
and gained ground against the National Action Party (PAN), it
also lost some ground to the Party of the Democratic Revolution
(PRD). The PRD won state governor elections in Zacatecas and
Tlaxcala areas where it had not previously been successful. In
several cases the PRD=92s victories have been won by politicians
who defected from the PRI to run on the PRD ticket.

     Internal divisions continue in the PRI, and, in a rare
display of independence from the traditionally all-powerful
president, several PRI governors such as Manuel Bartlett from
Puebla and Roberto Madrazo from Tabasco have publicly made known
their interest in being the PRI=92s presidential candidate in the
year 2000. The ruling party itself is debating, at least in its
upper echelons, the question of candidate selection, since the
traditional method of the president designating the new candidate
is increasingly unpopular in the ranks and the public as a whole.

     The National Action Party, the leading opposition party a
decade ago, while holding its ground in elections has for the
moment lost momentum and popularity. In the public mind the PAN
has become identified with the PRI, for example in the resolution
of the Fobaproa scandal, and the PRD has come to be seen as the
real opposition party. And the PRD, which in its early years (it
was founded in 1989) had a reputation as a loser, now appears as
the genuine opposition party which also proves capable of winning
elections.

     At the same time, the inability of Cuauhtemoc Cardenas=92s
mayoral administration in Mexico City to undertake real changes,
and a series of minor scandals in the police department, have
undercut much of the initial enthusiasm for the PRD as any type
of decisive alternative to politics as usual.

     As Mexico enters 1999, the PRI-government establishment
faces challenges not only from the PAN and the PRD, but also from
important social movements such as El Barzon, the National Union
of Workers (UNT), and the EZLN in Chiapas. If the economic crisis
continues to deepen, not only the political parties, but also
these social movements could prove an important force. =


                         ###

END PART 1 OF MEXICAN LABOR NEWS AND ANALYSIS, JANUARY 1,1999
                BE SURE YOU HAVE PARTS 2 AND 3



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