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Privatization in Mexico is a road to nowhere

Infrastructure is key to development. There is little more crucial to trade and commerce than a good system of roads and highways. That is why Mexican President Enrique Peña Nieto recently announced a major new infrastructure program that hopes to attract $100 billion in private investment. The construction of a first-class highway system is today what the building of railroads was in the late 19th century, both a practical matter and a symbol of progress. Since the late 1980s Mexico has engaged in massive highway construction through public-private partnerships, resulting in the costliest toll roads in the world at great public expense.

By 1997, the Mexican government acknowledged that the expensive toll roads were a failure. The toll costs were simply too high for most Mexicans to use them, and so a few wealthy Mexicans and tourists whizzed down pristine, empty highways while most Mexicans continued to use the old single-lane roads left to languish with ever-deepening potholes. Former foreign minister Jorge Castañeda called the private road project “a dumb idea that didn’t work.” The failure was so drastic that the government spent close to $8 billion re-nationalizing about half of the 50 newly constructed highways. The private companies involved complained that they stood to lose more than $3 billion, and so the Mexican government stepped in to make up for their losses from the public treasury.

Given such a monumental failure, it’s surprising that Peña Nieto is following the same disastrous road. But he is. Roads are simply one example of a general neo-liberal mantra: privatize, privatize, privatize. In the mid-1990s, President Salinas de Gortari went on a privatization spree, selling off Telmex, the national telephone company, to his friend Carlos Slim. He also undid one of the major triumphs of the 1910 Mexican Revolution by allowing communal land holdings to be sold. The free trade agreement, NAFTA, was part of this privatization campaign to encourage foreign investment and commerce.  By the end of Salinas’s six-year term in 1994 the number of Mexican billionaires had grown from 4 to 24, and millions of Mexicans had sunk into poverty.

In the mid-1990s, Mexicans responded to the massive shift in wealth to the 1% with social protest and rebellion. A small indigenous army in the southern state of Chiapas calling itself the Zapatista Army for National Liberation launched a revolution that became the first Internet guerilla struggle. In the midst of this unrest, in 1995 the people of Tepoztlán, a small town an hour outside of Mexico City, fought against a multinational corporation that had planned a half-billion dollar golf course in a zone with a scarcity of water. The townspeople kicked the authorities out of town, set up barricades to prevent the entry of federal police, and elected a popular assembly. To everyone’s surprise, the Tepoztecos won, against the wishes of state and federal officials and the pressure of a well-financed and well-connected transnational company with professional golfer Jack Nicklaus as its consultant.

Now these two skeins come together again as Peña Nieto’s ministry in charge of infrastructure plans a highway expansion through Tepoztlán. The Secretariat of Communications and Transportation (SCT) seeks to widen the La Pera-Cuautla highway, which runs through an ecological reserve in the municipality of this popular tourist destination. Tepoztecos are once again organizing against runaway modernization. They camped out at the construction site to stymie progress by Tradeco, the engineering company hired for the project, and took over their modest town hall. Tepoztlán’s municipal president, reported to be a close relative of Tradeco personnel, fled. He hasn’t been seen since.

Opponents of the highway expansion point out that a shorter, flatter, straighter route would be the Cañon de Lobos national highway to the south. At issue is the privatization of development in Mexico. Considerations of sustainable, environmentally sound alternatives are crowded out by the shell game to transfer resources to private pockets. The Cañon de Lobos route is a national highway, while the route through the eco-reserve has been conceded to private administration. Tradeco will set up toll collection on the new road, and existing roadside stops will expand to host hotels, gas stations, 7-11’s and other chain convenience stores. A Walmart is even said to be in the works. Most important is Tradeco itself. Much favored with government contracts during the presidency of Felipe Calderón from 2006-2012, Tradeco symbolizes both the dynamism of the Mexican economy and its notorious political corruption.

The bulk of the Tepozteco activists look like farmers, but they have leveraged the power of technology to great effect, with Facebook pages, Twitter, and other social media efforts reaching worldwide. Like the 1995 golf course struggle, their success depends on marrying their deep tradition of protest politics with a postmodern tech-savvy edge. Yet much has changed in Mexico in the 20 years since Tepoztecos took over their town to oppose the golf course. One activist camped out in front of the municipal building contrasted his position with what he saw as a general apathy. People in town, he lamented, “are only interested in cell phones and consumerism.” Between communal values and consumerism stretches a great abyss. Tepoztecos may stop the tractors. But the highway protest points to a much larger divide in Mexican society between the few who have benefitted handsomely from privatization and the many who have not. If Mexico continues to build expensive toll roads that few can afford, the public will once again have to subsidize private corporations. And that is a road to nowhere.

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