Communist Party of Mexico (Marxist-Leninist): The Economic Crisis and Corona Virus in Mexico

The economic crisis and the coronavirus pandemic, both in Mexico as well as at the international
level, are two different developments of different origins, which coincided in time and place,
both, but of course, like all the problems of human society, they interrelate and affect each other.

The Economic Crisis in Mexico

The characterization that we have maintained of the economic situation in Mexico in recent
years, after the crisis of 2007-2009, has been one of economic stagnation, with short periods of
weak growth, which never surpassed the levels of growth before 2008. Therefore, the Mexican
economy did not reach a boom, permanently creating the tendency towards a new crisis.
The anti-cyclical measures that the governments of Felipe Calderón, Enrique Peña Nieto, and
even Andrés Manuel López Obrador (AMLO) (in the last year), with their nuances, sought to
counter the downward trend in the rate of profit, placing the costs of the crisis on the proletariat
and the masses of people – increasing the exploitation of labor power seeking to increase the rate
of surplus value.

To achieve this, the governments of Felipe Calderón and Enrique Peña Nieto imposed in Mexico
all the measures recommended by imperialism, through their international organizations such as
the International Monetary Fund (IMF), the World Bank (WB), the Organization for Economic
Cooperation and Development (OECD). These were the same neoliberal measure that were
applied at the global level; this package of counter-cyclical measures were synthesized into
structural reforms, the country’s indebtedness and renegotiation of the North American Free
Trade Agreement (NAFTA), now known as the Mexico-United States-Canada Treaty (USMCA
Treaty).

The consequences of these measures can be summed up fundamentally in an exponential
increase in the exploitation of labor power – with the loss of many of the rights won in the
struggles of the working class since the Bourgeois Revolution of 1910-1917. They increase the
absolute and relative surplus value, and a major effort to privatize basic services, such as health
care and education.

This has also resulted in the handing over of more than 30% of the Mexican territory for mining
exploitation by foreign capitalists, the devaluation of the Mexican peso by more than 50% (in
2011, $1 US dollar was equivalent to around 11 Mexican pesos, in 2018 it was worth 21 pesos,
today it is worth 25), and the doubling of public debt (in 2011 the country’s public debt was
equivalent to 24% of GDP, now it is equivalent to more than 47%). However, just in this period,
the bankers and a handful of oligarchs of the country increased their capital exponentially; for
example the magnate Carlos Slim was among the first four richest men in the world, where he
still is, while more than 80% of the population remains below the limits of poverty and extreme
poverty.

In the last 10 years, the above led to the intensification of the class struggle in the country, where
the proletariat and the popular masses raised historical struggles. However, we did not achieve
the level of revolutionary accumulation of forces to give it a revolutionary way out, nor did the
oligarchy have enough strength to impose a fascist way out. In the elections of 2018, Department
II of the bourgeoisie (production of articles of consumption – translator’s note), through a

populist discourse, with social democratic overtones, brought AMLO to the leadership of the
Mexican government and State.

At that time, we pointed out: “With the arrival of AMLO-MORENA, a new phase of the cycle of
capitalist accumulation opens, one of the fundamental features of which, is that the fraction of
the bourgeoisie linked to Department II, of the economy is being put in charge” (Conclusions,
orientations, resolutions and tasks of the 7th Ordinary National Congress of the PCMML,
November 2018).

In the same document, we warned that a new discourse was being prepared with “new patriotic
symbols”, such as the referendum in the current constitutional frameworks, the sale of the
presidential plane, a cut in the salaries of top officials, and an “transparent” management of
public resources. The fight ‘from above’ against corruption had begun, the official government
residence was converted into a museum, among other measures.

In fact, at no time did they propose to dismantle the foundations of neoliberalism, which have
been established in the country for the last 40 years, much less to improve the conditions of the
working class. On the contrary, the central objective of the so-called Fourth Transformation of
López Obrador has been to modernize capitalism in Mexico, in order to guarantee the continuity
of the process of capitalist accumulation for the benefit of big capital.

AMLO has sought the growth of the internal market; however, his government is pro-oligarchic,
characterized by the revitalization of the national economy. It is the same as all the measures of
the capitalist governments, from whichever faction, they are unable to avoid the crises. This is
especially true when, in the case of Mexico, the structural reforms have remained intact; the
public debt has not grown under AMLO because of the austerity policy that has been imposed; it
has been paid on time.

The Mexican government promised a growth of the Gross Domestic Product (GDP) by 4%
during its six-year term. In the first year, a growth of about 2% was projected, and in any case,
they claimed that a possible crisis could only be caused by external factors, specifically the
weakness of the world economy. Our Party, in its First Ordinary National Conference of
December 2019, analyzed the following data to argue that the tendency towards crisis in Mexico
was largely rooted in the contradictions of capitalism in Mexico itself:
“What should be noted is that since the second quarter of 2018, the GDP has been declining,
until the third quarter of 2019 to 0.0%.

“The data on the industrial sector, the decline in gross fixed capital investment, among other
indicators, show that, in the short term, that is, the years 2019-2020, it would not be able to
overcome the conditions that would allow it to move from a phase of stagnation to one of boom.
“Given the conditions of the world and Mexican economy, there is a better chance of a crisis
developing. This would be to such an extent that the increase of tariffs on Mexico’s exports to the
US, a coordinated flight of capital outside the country, a speculative attack of financial capital
on the peso, the decline of foreign and local investment, among other economic factors, could
trigger a crisis.

“Industrial production is central to understanding the state of capitalist accumulation.
According to data from the National Institute of Statistics and Geography (INEGI), in the first
quarter of 2019 the main features of industrial production (secondary activities) is the following:

A contraction of –0.5% in the first quarter, –1.8% in the second quarter, –1.7% in the third
quarter; if to this we add the contraction of the last quarter of 2018 from 1.1% to 0.5%, we can
say that technically the secondary department in Mexico is in recession, according to the method
of INEGI itself.

“Since industry is in recession, this is not only reflected in the whole economy, the main thing is
that it shows the complications of the process of capitalist accumulation; to know the state of a
capitalist economy, the way industry is remains the central thing. Therefore, the crisis that is
growing in Mexico does not come from “abroad”, but is the contradiction of capitalism itself in
Mexico.

‘On the other hand, the stagnation registered by the INEGI is reflected in employment and
decrease of consumption. During March, only 48,515 formal jobs were created. The reality is
that the 269,143 jobs created in the first quarter represent the lowest number of jobs created in
the first three months of the year since 2014.

“In net terms (if we consider layoffs), for the third quarter of 2019 there was only an increase of
696,614 (formal) salaried jobs compared to the same quarter of 2018 (that is, an increase of
2.0%, less than the 2.4% obtained in the same period last year). The last data to point out the
main features of the Mexican economy, apart from GDP and industrial production, is gross fixed
investment.

“According to the report by the INEGI, Gross Fixed Investment registered a real decrease of
–3.9% in March and –1.3% in September. This indicator represents expenditure on construction
machinery and equipment, both domestic and foreign.

“In its cumulative annual comparison, Gross Fixed Investment was reduced by –5.5% in March
and –6.5%) in September. In particular the expenses of total machinery and equipment have
fallen from –7.3% to –7.8% and in construction from –4.2% to –5.9% in the respective months.”
Now (the second half of March), the crisis has arrived both in Mexico and the world; they are
trying to hide the real causes of the crisis, which are in the Law of the Tendency of the Rate of
Profit to Decline, social production and private appropriation, wage exploitation, the
accumulation of capital and the insatiable thirst for profit. These are all inherent in the
imperialist-capitalist system itself; the state has intensified the propagation of the idea that the
crisis has been caused by the economic war between China and the United States, the
coronavirus and the fall of oil prices.

On March 19, Michelle Meyer, Bank of America’s Chief US economist pointed out that “the
[US] economy has fallen into a recession” and with this the crisis has started, and the economy
of US imperialism will collapse in the second quarter of 2020, with a 12% decrease.
The destruction of the productive forces with this crisis will be brutal, Meyer continued, with
more than 1 million jobs lost every month and “wealth will be destroyed”.
With this apocalyptic statement, it is inevitable that this new crisis that we are witnessing will
have an international character and its fundamental feature, such as that of the most recent crises,
is a crisis of overproduction. Both the so-called trade war between the United States and China,
and the sharp drop in oil prices, have their cause in the overproduction of commodities.

The coronavirus pandemic only means that it is spreading at a time of crisis; the pandemic only
aggravates it, and is very far from being one of the causes of the crisis.

In any case, the relationship of the Covid-19, which began in Wuhan, China, on December 31,
2019, with this new economic crisis is that, on the one hand, it has affected world trade to the
extent that it has caused the closure of borders for people and commodities, both in China and in
various parts of the world. As China is one of the important sources for five industrial branches
(pharma-chemical, automotive, aeronautics, electronics and telecommunications), this has led to
a significant decline in world trade. However, various monopolies of the different imperialist
blocs have taken advantage of the health problem caused by Covid-19 to impose lockouts, to the
detriment of the workers, in order to reduce the overproduction of commodities.

Mexico, arriving on the international stage with a stagnant economy and without even minimal
growth, industrial production in decline, and subjected economically to US imperialism,
immediately suffered the blow. For more than 10 days up to March 20, the fall of the Mexican
Stock Exchange reached more than 7.1%; in two weeks the Mexican peso was devalued by more
than 30%, reaching a rate of one US dollar to 25 pesos, while 15 days before one US dollar was
worth about 18 pesos. A barrel of Mexican oil fell by more than 22%, reaching $18.78. This is
naturally causing a shock to the Mexican economy.

The Current Anti-Crisis Measures Are Striking the Proletariat

In Mexico and globally, the anti-crisis measures are the same that imperialism has applied in
previous crises, such as the credit line opened with the IMF, and advancing public investment
spending with 150,000 million pesos to stabilize the budget, insurance to guarantee that in the
face of the fall of oil prices the public budget will not be affected, the auctioning of the
international dollar reserves, in addition to the fiscal stimuli for big national and transnational
monopolies.

These measures are decided fundamentally by the oligarchy itself and imperialism, for example,
immediately, on March 19, the Federal Reserve Bank of the United States offered a swap line to
the Bank of Mexico and eight other countries, in order to avoid a shortage of US currency and at
the same time to put these central banks into debt. The Business Coordinating Council, for its
part, is preparing its fangs to benefit from the anti-crisis measures, proposing to the Mexican
government the cancellation of taxes, the injection of liquid money to avoid the dismissal of
workers, as well as the indebtedness of the Mexican government in order to face this crisis.
Taking advantage of the panic caused by the spread of the coronavirus, governments around the
world have begun to impose fascist measures. These are for social control and to prevent popular
uprisings because of the loss of millions of jobs, and imposing states of emergency to suspend
the fundamental rights of the population. In addition, the state has suspended the labor rights of
workers, imposing more enslaving labor on certain vital sectors of workers, for example in the
health sector, or by legitimizing lockouts without pay for workers, etc.

There are important prospects for the working class and peoples

The economic crisis is provoking the deepening of all the contradictions inherent in the
capitalist-imperialist system at the world level, but, in this particular crisis, unlike the one that
struck us more than 10 years ago, the world proletariat is more active in its class struggle.

Recent events in Sudan, Iran, Haiti, Ecuador, Colombia and Chile show that the mass movement
in the world is regaining ground.

Even though the working class has not been the main force and leader of the recent movements,
the International Labor Organization (ILO) is already estimating that, with the current crisis, it is
possible to lose approximately 25 million jobs, which will necessarily force the working class to
stand up in battle.

In Mexico, after the ebb in the mass struggle that began in the second half of 2018, the first
quarter of this year saw a revival of the mass movement, on March 8, with hundreds of
thousands of women taking to the streets, the outbreak of some university strikes (Autonomous
University “Benito Juárez”; of Oaxaca, Autonomous University of Chapingo), the strike of the
Single Union of Workers of NOTIMEX (state news agency), and the teachers’ mobilizations.
The struggles of the peoples for the defense of natural resources in the southeast of the country
are, among others, the elements that shape this perspective.

The financial oligarchy and its most fascist and bloodthirsty manifestations are licking their lips
in order to impose a fascist solution: the mass destruction of the productive forces and a new
redivision of the world through a Third World War. The measures imposed by border closures,
curfews and states of emergency in many parts of the world, under the pretext of the coronavirus,
are erasing at one stroke all the rights won by the struggle and blood of the working class. They
are arguing for a state of emergency, which is being magnified and/or provoked in many cases.
Their main purpose is to advance the putting down of the protests and the legitimization of
fascism.

In Mexico, since the coming of AMLO to power, these same sectors, the fascists and the ultra-
reactionary right, have reactivated all their mechanisms to seek roots among the masses. They
are constantly seeking to snatch away the historic banners of struggle of the proletariat and the
masses of people. They are not yet taking the lead within the mass movement, but the crisis we
are entering will also create conditions for them to step up their fight for the masses.
We, the working class and the popular masses, must be clear that there are still varying solutions
to this crisis, but the main ones are: on the one hand, the fascist solution, with a world war, and
this is the best solution for the benefit of the international financial oligarchy; and the
revolutionary solution that, with the intensification of the economic crisis that will lead to
political crises and possibly revolutionary crises, in which the proletariat must take the initiative
and unite all the popular sectors around itself, opening the way to the proletarian revolution.
From this perspective, it follows that the path of the working class necessarily involves
intensifying its efforts to advance as quickly as possible in its processes of revolutionary
accumulation of forces. This places as a current and immediate problem, the building of the
Anti-Fascist and Anti-Imperialist United Front, raising the slogan “Let the rich pay for the
crisis!’, taking up as forms of struggle the General Political Strikes, advancing towards a new
offensive, opening the way to a new epoch of proletarian revolutions.

This process, in Mexico, is in the building of the National Assembly of the Proletariat and
Peoples of Mexico, the centralization of the struggles of the whole country, under a single plan
of struggle, and the revival of the mass struggles, unmasking on the one hand the oligarchic
nature of the AMLO government, but also denouncing the fascist and ultra-reactionary right,

which pretends to stand in opposition to AMLO, with whom it has differentiated positions, but
both share the bourgeois pro-oligarchic nature.

The crisis has arrived and all the contradictions inherent in the capitalist-imperialist system will
deepen. The class struggle will intensify exponentially; the proletariat has no other way but to
resume its leading role in conducting its class struggle.
We Marxist-Leninist communists, revolutionaries, democrats from all over the world have to
play our historical role to help raise again the perspective of scientific socialism and
communism.

Now more than ever…
It is time for Proletarian Revolution! Workers of the World, Unite!



Categories: Mexico

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