El Otro Lado. Social Science Perspectives on Development Practice

El otro lado is the expression Mexicans use to refer to America. It literally means the other side, as on the other side of the border. I wrote this essay for my class Social Science Perspectives on Development Practice.

The first time I visited America I was impressed by the roads, parks, and houses – so different from Mexico. I knew we were not rich, but I never thought of us as poor. The first time I read the words the third world was in my textbooks. America, colored in a light yellow, was the first world; Mexico, colored in red was the third world. Somehow I forgot the second world, mainly communist countries, in orange. Without even noticing, the construct of The West was seeded in me. America, el otro lado, was better than Mexico.

Colonial and post-WWII D/Development

Mexico, as we know it today, is a rich and diverse clash of cultures, starting with the invasion and colonization of the Aztec empire by Spain in 1519. Hernán Cortés came upon a complex conglomerate of city-states governed by priests and nobles. The society the conquistadores encountered was not perfect, it is now documented that inequalities and even some forms of slavery existed, but its economy, based on communally owned lands, known as callpulli, and trueque was thriving. Pre-colonial America had a healthy, vibrant market, and a fair taxation and tribute system were in place. Pochtecah (merchants), artisans, and calpulli owners paid taxes on the goods they produced and the services they provided. The exception was minors, orphans, invalids, and beggars; also priests and nobles, hence the fair system (Cockcroft, 1996). What the conquistadores marveled at was precisely the richness of the Aztec society. Indigenous peoples in the America of the 16th century had better diets and a higher standard of living than their European counterparts at the time of their colonization. Just like India and China (Davis, 2000), Mexico did not enter modern history as the helpless "land of famine." So, how was a self-sufficient, sophisticated, resilient civilization transformed into a vulnerable, dependent state? 

The colonial period

The establishment of the encomienda labor system by the Spanish crown is what some scholars call the start of the "development of underdevelopment." Encomienda was the seizing of indigenous land by Spaniards to lending to criollos, the Spanish descendants born in the new world, in exchange for goods, and the Christianization of Indigenous peoples. Spain enriched itself by looting then New Spain's natural resources and using cheap, if not free, labor. The land was no longer communally owned, and a highly class-stratified society, castas, and new forms of oppression and corruption developed. Mexico's production of goods increased, exports doubled, and regional markets flourished, helping the surge of Spanish mercantilism and early European capitalism to the detriment of mestizo and indigenous communities (Cockcroft, 1996). That's what Federici describes as primitive accumulation, "the way capitalism is created out of the destruction of other ways of life" (Federici, 2009). The encomienda system gave way to a concentration of power into the hands of hacendados (plantation like estate owners), mine owners, traders, textile sweatshop owners, bishops, and bureaucrats. A feeling of discomfort arose, and the middle class of criollos and mestizos initiated the independence movement, disregarding indigenous peoples. 

The newborn United States of America was eager to expand its territory and economic force and set the first of a series of interventionist practices and policies in Mexico that would shape future relationships between the two countries. After a decade of wars against Spain and France, Mexico was finally independent but politically, economically, and morally devastated. Following the period of independence (1810-21), Spanish capital left, and Mexico was highly indebted. The new constitution, enacted in 1857, planted the seeds of economic modernization, helped unite the country, laid the basis for a strong state, and promoted capitalist principles of free wage labor, private property, foreign investment, and economic development. The new taxation and tariff system helped revitalize the mining and energy industries, improve the transportation and communications infrastructure, and double the production of the textile industry. 

During 1876 and 1910, Mexico underwent rapid and sustained growth, creating an environment of relative political stability and social peace (Cockcroft, 1996). The newly centralized state built most of the infrastructure around the biggest cities in Southern Mexico, increasing the interdependence of Northern Mexican towns with its counterparts in the Southern US. At the time, people from both sides of the border would cross between the US and Mexico daily with little scrutiny. Mexicans would go to work in border towns and would bring back goods for consumption and re-selling. At the beginning of the 20th century, physical barriers were minimal, and there was a vibrant market within the borderlands. Overall, however, manufacturing in Mexico grew only modestly: It was capitalism without industrialization. By 1910, US and British investors owned almost all industries in Mexico. The US dominated the railroads and mining industry and the British the oil industry. Inequalities grew wider than pre-independent times.

The Mexican Revolution (1910-20) not only interrupted but diluted the economic growth gains from previous years. Agricultural and livestock production dropped, the mining and oil industry was depleted. Distribution of goods between Southern and Northern Mexican states was interrupted, helping intensify the exchange of products within the border towns. Moderates, led by former generals, defeated the more radical Zapata and Villa. The new constitution, enacted in 1917, promoted a policy of private property and foreign investment, which helped improve the economy. Still, a wave of protectionist policies promulgated by the US government during the Great Depression led to strikes and social unrest in Mexico. Several structural reforms took place after 1929, including the nationalization of the railroad company in 1930 and the oil industry in 1938, and the land reform that extended for almost a decade in the late 1930s. In retaliation, US and British companies terminated purchases of goods and withheld loans. The US put into place a new wave of interventionist policies, including sending troops to the Mexican border and the deportation of more than 300,000 Americans of Mexican descendant. Import-substitution industrialization policies started to slowly advance during the 1930s, although it was not an official government policy until the 1940s. The government seized the foreign-owned private land and turned it into ejidos, communally owned land similar to a calpulli.  

In 1943, the Rockefeller Foundation and the Mexican government introduced the Green Revolution; its massive provision of credits, machines, fertilizers, and pesticides helped Mexico become the ninth-largest producer of food in the world (Cockcroft, 1996). The government opened its door to foreign capital often as a joint enterprise with the state and offered tax incentives for production directed toward the home market. The Mexican miracle was in its pre-cooking phase.

The post- World War II period

I was surprised to find out that Mexico had a prominent role in the Bretton Woods Conference that delineated the development project for the coming decades (Thorton, 2017). The creation of the IMF and the World Bank anticipated a new world order with the US leading the capitalist approach to the economy. Mexico's attempt to limit the ability of the largest countries to impose decisions on the smaller ones was received with skepticism. For Mexican experts at the time, even if countries initiated a process of accelerating external capitalization with their funds or with the help of other countries, the state needed to intervene. And that is what happened for the next four decades. Mexico followed the lead but crafted its particular regional version of macroeconomics with its variations and deviations (Drake, 2006). It was that or adhere to postwar socialism.        

In the years following World War II, the government intensified the import-substitution program initiated after the Great Depression. A series of policies, including the promotion of industrial expansion through public investment in agriculture, energy, and transportation infrastructure, followed. The progressive undervaluation of the peso, and the import control of consumer goods and other barriers to imports was vital to protect the national industry, helping expand the productive capacity. The government promoted relaxed policies on capital goods. During the 1940s and until the late 1960s, Mexico grew steadily between three and four percent. By the 1960s, GDP growth averaged about seven percent. Manufacturing remained the country's dominant growth sector, expanding seven percent annually and attracting considerable foreign investment. Industrialization expanded from twenty-two percent of the total economic share in 1950 to twenty-nine percent by 1970. Agriculture and other primary activities declined during the same period. Urbanization and low-paying urban jobs began to increase, reflecting the shift of employment from agriculture to industry and services. A wave of rural migrants moved to invasiones, irregular settlements in the outskirts of the cities, and started building houses independently according to their needs and available funds. Many got property titles through titling programs promoted by the government. Water and sewage, electricity, and paved roads came progressively. Several authors, including Davis (2005) and De Soto (2000) talk about similar processes of urbanization in other countries of the global South.

By 1970, Mexico's imports – mainly capital goods used to expand domestic production – remained high. The country had a diversified economy based on exports and became largely self-sufficient in food crops, steel, and most consumer goods. The GDP grew more than six percent annually at the end of the 1960s and early 1970s. Between 1977-1981 the GDP expanded at an average annual rate that was over eight percent (Drake, 2006). It was the Mexican miracle.

Development in the Era of Neoliberal Globalization

Several oil shocks in the 1970s slowed the economy worldwide. Mexico’s economy started to contract. It was hard to keep the import substitution of high technology machinery and equipment. Mexico still depended on foreign investment and was highly dependent on the oil industry. By the time the 1981 oil crisis hit, Mexico was not prepared. Fiscal and foreign exchange revenues were highly dependent on petroleum exports, and imports of intermediate and capital goods soared. Consumer prices in Mexico rose. The rise in US interest rates triggered a balance of payments crisis in the country. President Lopez Portillo declared a moratorium in August 1982 on external debt service payments. The economic rate dropped to around zero percent, the annual inflation rocketed to more than one-hundred percent, and unemployment reached double-digits (Cockcroft, 1996). The informal economy grew, and people from border towns started buying cheaper goods in el America, increasing the economic interdependence in the borderlands. Magnified by the crisis, el otro lado looked more unattainable than ever. The now 40-year-old Mexican miracle ended abruptly, and both the import substitution and the state-led industrialization strategies were almost dead. After 1982, Mexico started implementing radical changes to its development strategy, reducing the role of the state, favoring free-market mechanisms, and reorienting social policies, including social welfare and public housing provisions, toward specific goals and decentralization (Drake, 2006). As a result, public investment contracted, and the gap left by the state was not covered by the private sector as promised. As a consequence of the investment collapse, it was more difficult for the country to modernize and expand its economy, becoming less competitive in the newly globalized world. As unemployment increased, migration to the US increased as well. The US was interested in two commodities: oil and cheap labor. Mexico provided cheap with babysitters, gardeners, harvesters, cooks, and cleaning service workers for the US. While the US government penalized Mexican immigrants, it allowed employers to enjoy higher profits. Aware of how low-cost immigrant labor could help depress the average wages of Americans, the US government launched in 1986 an immigrant reform to legalize 350,000 guest-workers from Mexico (Moreno-Brid, 2009).

The 1990s maximized the implementation of neo-liberalism policies. The Washington Consensus’ recipe was followed almost exactly by then-President Salinas. Salinas encouraged private investment by denationalizing state enterprises and deregulating the economy in exchange for a reduction of the debt. Other policies implemented were lowering domestic borrowing costs, privatization of ejidos and oil resources, re-privatization of the bank system, and the expansion of a free-trade agreement with the US. Capital and foreign investment sky-rocketed after the North American Free-Tarde Agreement, NAFTA was enacted in 1994. NAFTA was the icing on the cake for Mexican neo-liberalists. It eliminated virtually all tariff and non-tariff barriers to intra-regional trade for over fourteen years. It made the way easier for the building of twin maquiladoras (high-tech assembly plants) along the US Mexico border. Exports soared, and Mexico went from being a country highly dependent on oil in the late 1970s to a maquiladora country by the late 1990s, when more than 50 percent of total exports came from maquilas (Moreno-Brid, 2009). Director Stephanie Black presents similar case studies in the film Life and Debt (Black, 2000). Maquilas are not an industry; Mexico has not yet reached the industrialization levels of other countries in the global South, such as Brazil and China. Maquiladoras employed and still employ thousands on both sides of the border, reinforcing the interdependency of both countries. NAFTA also hurt small farmers, since it was hard to compete with the protectionist policies implemented by the US; it was cheaper to import grains from the US. By the late 1990s, it was clear the neo-liberal reforms implemented failed to sustain and expand the economy. Social policies promoted by the government were unable to fully compensate for the harmful effects of the economic slowdown and the lack of job opportunities. Inequality was on the rise, and the top five percent had nearly fifty times that of the bottom ten percent (Moreno-Brid, 2009). US labor union activists saw NAFTA as shameless exploitation of labor; corporate executives saw it as an excellent, sensible business; the state department saw it as an interdependent partnership; and some Mexican and American scholars saw it as imperialism (Drake, 2006). Social movements were at the door. The social-democratic left was just around the corner, and a new wave of capitalism interventionism was not far from arriving.

Before organized political and social movements, including the Movimiento Zapatista and Movimiento por la Paz, took to the streets in Mexico, civil society was absent in the democratization process of the country. These social movements influenced the political system, which resulted in the election for the first time of an extremely conservative president in 2000 and a left-wing president in 2018. In the same way that the Movimiento Zapatista modified the vision that Mexicans had about Indigenous Peoples, the Movimiento por la Paz modified the way in which Mexican society perceived the situation of insecurity and violence in the country (Bizberg, 2015). Currently, the new government is struggling to reverse the social and economic devastation brought by the neoliberal vision of its predecessors. The migration problem goes beyond a wall; Years of American economic and political intervention in Mexico and Central America have had their consequences. Communities impoverished and co-opted by crime and violence prefer to take risks. The price of staying in their communities is higher than paying a coyote to help them cross the border. Caged children, separated families, deaths, deportation and criminalization have not stopped the migration to el otro lado.   

Contemporary Issues and Strategies: the case of CEDO Intercultural

Communities in northwestern Sonora in the confluence of the Gulf of California in Mexico have experienced social, cultural, and economic changes due to the implementation of predatory policies and regulations by the US and Mexican governments in the last 80 years. Indigenous peoples have been displaced and dispossessed by colonizers, missionaries, gold seekers, and hunters of the 16th and 17th centuries. More recently, communities of Mexican mestizos have had to deal with the consequences of capitalism and neo-liberalism intervention of the 20th century. Northwestern Sonora is the aridest area of the Sonoran Desert where a dune belt, a mountain range, a river, and the ocean converge, giving the desert a unique and vibrant ecosystem the Tohono O'odham (desert people) still utilize for cultural and economic interests. The Cucapá (water people) fished in the delta of the Río Colorado for more than 400 years until the US Mexican border passed them over. Likewise, the Tohono O'odham have traveled for hundreds of years from Arizona to the Gulf of California, unconcerned, until recently, of the border between the US and Mexico. These days, Mexican and Central American migrants cross the border aware of the dangers the Sonoran Desert represents in pursuit of the American Dream.

Right after the Great Depression, the US started building its economic power, intensified after world war II with the implementation of the Marshall Plan initiative. Along the Rio Colorado, three main infrastructure projects, the Hoover dam in 1936, the Imperial dam in 1938, and the Davis Dam in 1950 captured the fresh waters on which the Cucapá and O'odham peoples depended for their already precarious livelihoods down the river. Several centuries of exploitation and repression left less than 1000 indigenous peoples in the region. The development policies of postwar Mexico led to the construction of communication infrastructure in the region, facilitating the arrival and settlement of mestizo communities. The Mexican government had created ejidos, communally owned and managed land, as a way to confiscate and redistribute private lands to peasants to boost its state capitalist economic approach. The redistribution of land represented a new form of dispossession. Land traditionally owned by the Indigenous peoples was now in possession of mestizos. Indigenous peoples were invisible to the state’s capitalist structure.

As it did with the ejidos, the federal government promoted the collective use of fisheries resources between the 1930s and 1950s. Small fishing fleets entered the northern Gulf of California at the time. In the 1970s, big fishing cooperative companies monopolized fishing production (Valdez-Gardea, 2012). The increase in fisheries’ production, packing, and distribution accelerated the urbanization of small fishing villages, including Puerto Peñasco, displacing Cucapá peoples further north up in the Rio Colorado. But the Rio Colorado was drying up due to the construction of the dams upstream. The US Mexico agreement allocated less than ten percent of the Rio Colorado flow to Mexico, which was seized by the nascent agricultural industry driven by the government as part of the green revolution process in Mexico. The stream was interrupted entirely, affecting the wildlife of the northern Gulf of California dependent on freshwater for their reproduction and, consequently, the fisheries. Fisheries production and export decreased during the 1980s, causing even more migration. The creation of two of the biggest national parks in Mexico in 1993 and the introduction of neoliberal policies in the 1990s enabled the growth of the tourism industry in Puerto Peñasco, creating new challenges. Tourism still competes with the fishing industry for resources and investments.

The exacerbated urban growth due to tourism displaced fishermen's economy and relegated service providers, including gardeners, drivers, watchmen, hotel maids, to slums in the outskirts of the city. Cardboard homes without electricity or running water in the slums contrast with the towering buildings with heated pools next to the beach. Neoliberalist policies impacted populations differently in social, cultural, and economic terms, increasing rates of inequality and marginalization. Puerto Peñasco is a hybrid urban space formed by a four-star tourist enclave and a deteriorated city in which fishermen and service employees compete for space and the attention of the American tourists. Fishermen and the general population are not allowed to enjoy the facilities dedicated to the tourists, excluding them and forcing them to create separate recreational spaces. Even access to the beach, which by Mexican law is in the public domain, has been restricted by building physical barriers.    

In this environment of nearly forgotten and marginalized communities, NGOs found a niche. One of the oldest organizations in the region is the Intercultural Center for the Studies of Deserts and Oceans (CEDO). Founded in 1978 as a binational non-profit organization, CEDO works with different stakeholders, which has allowed it to position itself as a legitimate mediator between fishermen cooperatives, federal, state and local representatives, international and national donors, and environmental and social activists. CEDO's mediator role has given it the muscle to negotiate for a social change after the Washington Consensus, although not always with the expected results. At first, CEDO perceived fishing communities in the northern Gulf of California as homogenous entities with distinctive and articulated leaderships, but the reality was more complex. Representatives in a consultation process advocated for one or several groups at the same time, and sometimes they served their own interests. For example, when NGOs, the federal government, and fishing cooperatives reached agreements for access to loans and compensation for a temporary closure of the fisheries, the leaders of the cooperatives represented the interests of the permit holders, leaving aside packers, distributors, merchants, and fishing employees. The consequences of the failed intervention were marches, roadblocks, and the burning of vehicles as a form of protest. CEDO, as a mediator, was seen as a vendido, a traitor. Trust broke.

Trying to re-establish its reputation and helped by international foundations, CEDO started experimenting with different development approaches. Micro-financing for fishermen's wives had modest results. Women were already helping in the harvesting of seasonal produce and it was more profitable to continue working in the field than to start a business. Ecotourism as an alternative to fisheries did not work for all. Not everyone is willing or able to pursue a career in business, especially if one is a 60-year-old fisherman.   

Puerto Peñasco is an example of the consequences of the structural transformation in the Mexican economy. CEDO has served a dual and contradictory role in the Gulf of California during the last four decades. On the one hand, it has served as a mediator between the state and the communities, often raising the voices of the community by bringing them to the decision-making table. On the other, it has served as promoter of economic liberalization, even marketing cultural values with the promise of a better life. CEDO’s role has been somehow in-between state, society, and market, promoting the redistribution of resources and power within distinct social groups and advocating for political reform. Neoliberal policies implemented in Mexico in the 1990s displaced the role of the regulatory state, which was immediately taken by NGOs. They filled the gaps left in social welfare and rural development faster than others on the environment. CEDO started as an organization dedicated to environmental conservation but quickly filled the gaps in public education, gender inequality, community organization and training, and the generation of alternative economies. CEDO transformed the way society and the government organize and interact with each other. At the same time, communities and government shifted the way CEDO conducted its procedures and approaches. In general, NGOs have been successful in funneling aid to society and opening spaces for dialogue. Their role is limited by the available funds. In an ideal democratized world, NGOs have no role at all.

References

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