BY HILDA CUZCO
On January 15, U.S. president William Clinton announced that the government of Mexico paid the entire $12.5 billion it borrowed from Washington, plus interest, three years ahead of schedule. Government officials are also bragging that the U.S. Treasury pocketed a larger-than-normal profit from the loan, which the White House cobbled together after the collapse of the Mexican peso in 1994.

Nearly a week later, a hunger strike by street sweepers in Mexico City was attacked by the police January 20. The incident received nationwide media attention in Mexico and highlighted the devastating toll Clinton's "bailout" brought on the country's workers and peasants.

After two years of protests and a 97-day hunger strike, the street sweepers reached a settlement with the government on January 22. The administration of Mexican president Ernesto Zedillo agreed to rehire 190 of the dismissed workers and compensate another 110. The hunger strikers were fighting to win back the jobs of 366 street sweepers from Tabasco state, in the southeast, who were fired in 1995. Their dismissals were part of the austerity measures the Zedillo regime implemented in the last three years to repay the U.S. loans and continue making payments on the country's foreign debt.

Orlando Benito Martínez, one of hunger strikers, told the New York Times that the Tabasco workers were fired after they demanded back pay they were owed from extra services they were required to perform for local politicians, like cleaning their private homes and building swimming pools.

In the early hours of January 20, prior to reaching an accord with the government, 200 policemen carrying shields and truncheons stormed the strikers' campsite on a highway median across from the National Human Rights commission office in Mexico City. The police officers beat up the workers who pelted them back with stones. One worker was hospitalized. Two hunger strikers, Venancio Jiménez, 22, and Jorge Luis Magaña Alamilla, 35, were forcibly taken to a city hospital. The workers called this action a kidnapping, as did a major newspaper columnist, while the city authorities dubbed it a "humanitarian" intervention. Zedillo complimented the officers, saying they "acted well" to end the fast.

The Tabasco workers had occupied the town hall in Villahermosa, the state capital, last year forcing the authorities to reach a settlement. Later in October, they decided to march to Mexico City accusing the governor of Tabasco, Roberto Madrazo, of not complying with the agreement. Madrazo has been the target of opposition parties on charges of illegally spending $39 million on his 1994 gubernatorial campaign. The federal authorities declined to prosecute him, and the state officials dismissed the case.

Fall and bailout of the Mexican peso
The current crisis in Mexico dates back to Dec. 20, 1994, when Zedillo announced a devaluation of the peso. In response, international money traders unloaded the currency hand over fist, driving it down 40 percent against the U.S. dollar in one week. The collapse of the peso raised fears among bankers and financiers in the United States and other imperialist countries that Mexico could default in interest payments on its loans. The country's foreign debt stood at $98 billion last year, or 38 percent of Mexico's gross domestic product.

In February 1995, Clinton authorized "loan guarantees" to Mexico of $20 billion from the U.S. Treasury, while the International Monetary Fund and other lenders offered an additional $30 billion. In exchange, the Zedillo regime agreed to carry out a harsh austerity plan to guarantee payments on the debt. This included imposing a cap on wages well below the rate of inflation, layoffs, increasing the sale tax from 10 to 15 percent, and raising fees for public services.

At the time the White House faced opposition from many politicians in both the Republican and Democratic parties and decided not to ask approval from Congress. Among the most outspoken critics were Senator Alfonse D'Amato, a Republican from New York, and rightist politicians Ross Perot and Patrick Buchanan. "They were wrong," Clinton said on January 15, without referring to specific names. "Today the American people can be proud that we did the right thing."

Treasury Secretary Robert Rubin said Washington made an extra $580 million profit on the loan. This is because the White House charged a "premium" on interest to Mexico, 4 percent higher than normal U.S. interest rates, supposedly to make up for the risk involved.

Today the peso stands below the rate of 8 to the dollar. Inflation was 29 percent at the end of 1996.

The Mexican government is paying back 1.5 billion borrowed from the IMF as well. Mexico's Finance Minister Guillermo Ortíz said in an interview that the Zedillo administrations financed these loan repayments by selling bonds denominated mostly in foreign currencies in European, Asian, and U.S. markets in five to 10-year term.

The austerity measures imposed as conditions for these loans led to plunging living standards for Mexico's workers and peasants and many in the middle classes. "Obviously the crisis took a toll in terms of economic welfare, and incomes are still down from their 1994 level," said Ortíz.

Since 1994, many people have lost their jobs or are underemployed, scores of small businesses have gone bankrupt, many homeowners cannot pay their mortgages, and real wages have fallen sharply. A study published in 1996 by Mexico's National Autonomous University (UNAM) reported that 50 percent of the Mexican population of 92 million live in extreme poverty, up from 31 percent in 1993.

In 1996, the country's gross domestic product grew 4.5 percent and Mercedes Benz sales in Mexico jumped 50 percent over 1995. But inflation, cuts in social services, and other austerity measures meant a rapid deterioration in living and working conditions for workers.

A recent report by UNAM said that while the cost of living rose by 913 percent between 1987 and 1996, the minimum wage grew only by 249 percent in the same period. In December, the Zedillo administration raised the minimum wage to 23-26 pesos ($2.90-$3.30) per day. According to the UNAM report, a basket of basic food staples - tortillas, beans, eggs, rice and cooking oil - costs today an average 64.50 pesos ($8.16) per person daily.

Many workers who have lost their jobs have resorted to marginal employment for an income. Thousands from the countryside continue to flock to the capital city.

Juan Calderón, a young man who used to work in a government job and now sells knockoff perfumes out of a car trunk, told the Christian Science Monitor, "My other job was better, but this puts food on the table." Calderón is one of the tens of thousands of street vendors, ambulantes, that take over the sidewalks in front of the store shops in Mexico City's historic center. Their growing numbers have been noticeable since the 1994 currency crisis, and have survived conflicts with both the shop owners and the police who conduct raids and confiscate their merchandises alleging they have not paid permit fees. "I already pay every day to keep this spot, but I couldn't tell you where the money goes," said Rosa Angua, who sells nylons. "It's all corruption."

Resistance by workers and peasants
The strike of the street sweepers in Mexico, adds to the thousands of protests taken place last year against austerity measures. "We are dying of hunger in Tabasco," Benito Martínez, one of the hunger strikers, told the New York Times. The workers there said that they have no land to farm and fishing is out of the question since the waters are polluted by Pemex - the state-run oil enterprise. Some 3,000 protest marches took place in 1996 in Mexico City alone, including nurses who squirted blood drawn from their arms with syringes, demanding medicines for the social security hospitals.

Skirmishes in the countryside have also included demonstrations by peasants against political repression and economic conditions. Guerrilla groups have also began functioning more widely in rural areas like Guerrero and Chiapas, winning sympathy among peasants. Last year, when a train loaded with corn passed through a shantytown in the northern city of Monterey, residents halted it while families rushed to fill sacks of grain.

An official census in Mexico of 1995 released last December described the states of Guerrero, Oaxaca and Chiapas as falling behind the national average by almost every measure. The southern states mostly populated by indigenous people have unpaved roads, schools are in poor conditions with irregularities in the attendance from both teachers and students, and illiteracy runs rampant, while one out of three homes lacks running water. These are also areas where guerrilla groups carry out armed assaults on government installations.

Last November, a group of peasants blocked the highways in Chiapas restricting access to four municipalities. They were demanding a price increase for their corn from $162.8 per ton to $320.5. The authorities gave them the run around while arguing that "other groups" have been forcing people to join their protests. In the municipality of Laja Tendida, near the border with Guatemala, a group of peasants holding a protest were attacked by the police leaving three dead and several injured. Seven police officers were eventually jailed for the killings.

Stopping flow of immigrants to U.S.?
An editorial in the January 16 New York Times stated that Washington "bailed out" Mexico, "because Mexico's economic collapse would have slashed demand for American exports and driven illegal workers across the border."

A study by the Organization for Economic Cooperation and Development (OECD) said that economic conditions in the country since 1994 have fostered immigration. The OECD predicts that more than 6 million peasants will be moving to either Mexico City or will cross the Mexico-U.S. border in the next decade.

Meanwhile the U.S. Immigration and Naturalization Service announced a plan to spend $400 million in addition to their allotted budget, "to secure the border," according to INS Commissioner Doris Meissner. The agency will hire 1,000 additional border cops and 350 new border inspectors.  
 
 
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