Guidelines for an Annual Report

Carlos A. Heredia
Equipo Pueblo

This report has been drafted on the basis of available information and documents from the different social networks in Mexico. The report will put forward concrete examples and statistics on social development; tie the information to the actors in this field (networking and alliance building); and include the points of view of civil society (lobbying and campaigns).

This is not meant to be an exhaustive report, but rather a guideline for a more in–depth analysis leading to an annual report on social development in Mexico, due in early 1997.

Indicators for Monitoring Social Development

The Mexican government usually measures its own commitment to social development via the evolution of social expenditure. During the Salinas administration, the government claimed that social expenditure accounted for almost 50 percent of the federal budget. It has now become evident that even in the years when the economy was supposedly performing adequately, this was only achieved through accounting gimmicks. The draconian structural adjustment measures implemented in the aftermath of the December 19, 1994, devaluation have led to the scaling back of social expenditure, and Mexicans have witnessed a severe deterioration in wages, employment, and income. This is illustrated with statistics from the National Health System on children’s mortality.

a/ Per 1000 inhab.
b/ Per 1000 children born alive and duly registered.
c/ Per 1000 inhab. 1 to 4 years old.
d/ Per 10,000 inhab. 5 to 14 years old.
e/ Per 10,000 children born alive and duly registered.
Source: President Zedillo’s First State of the Union Address.

The relative progress shown by official statistics, however, is challenged by figures on malnutrition. As poverty increases, so do deaths due to preventable diseases. New statistics on malnutrition are startling. The percentage of children between 1 and 4 years old in rural areas who suffer from severe malnutrition rose from 7.7 percent in 1979 to 15.1 percent in 1995 (El Financiero, Mexico City, 25 September 1995, p. 28). In poorer states, it has reached almost 34 percent.

Regional geographical differences are also very relevant. The incidence of malnutrition among preschool children in the southeast (Guerrero, Oaxaca, and Chiapas) is double that of the north. In Mexico City, just 3 percent of children under 5 suffer from malnutrition, compared to 14 percent in the southeast. According to the UN Economic Commission for Latin America and the Caribbean (ECLAC), the increase in the number of street children is also very relevant. Three out of four children who live in poverty drop out of primary school. They work 46 to 48 hours a week.

Those who still attend school work between 24 and 35 hours per week. The economy has been through a vicious cycle of low sales, reduced production, increased unemployment, falling purchasing power of wages, and declining sales. This cycle increased the overall indebtedness of families and businesses, whose financial and fixed assets were confiscated on a massive scale by their creditors.

Although the Mexican government signed the Copenhagen commitments, the degree of compliance is far from satisfactory. There are serious shortcomings in meeting the very minimal standards outlined in each one. Here we will briefly review progress on the commitments.

1. There is no an enabling environment for social development. The country is immersed in the most serious economic crisis in 70 years. There is no rule of law in Mexico, and although in theory the Constitution promotes full respect for all human rights, in practice the situation is abysmal.

2. Not only has there been no progress in eradicating poverty, but it has grown. 76% percent of all Mexicans (69 million out of a total population of 90 million) live below the poverty level –a daily income of two times the minimum wage, which in February 1996 was the equivalent to US$2.71 per day– and over 45 % (40 million people) live in absolute poverty, without the means to meet their basic needs. The 1994–1996 economic contraction has made things even worse. By December 1995, Mexico had a total foreign debt of US$175 billion, with annual debt service payments exceeding US$25 billion. This amounts to a massive drain of resources that could otherwise be allocated to development.

3. According to official statistics, unemployment is only 7 percent; but such measures do not properly gauge the dimension of the problem. Almost half of the economically active population is unemployed or underemployed. Makeshift employment programs do not help much in creating permanent jobs. Economic and trade liberalizaton have hurt the productive apparatus and thus destroyed almost 2 million jobs since the most recent eruption of the crisis in December 1994.

4. In the era of North American economic integration, Mexico is probably as disintegrated as it has ever been, torn between a relatively well–off north and an impoverished indigenous south. Only 10 percent of the total population (the urban middle and upper classes) is considered a viable market with any purchasing power whatsoever.

5. As UNDP’s 1995 Human Development Report on the condition of women shows, Mexico is no exception to the general rule that women are the first hurt when a country undegoes an economic crisis. Indigenous women and single mothers are particularly vulnerable. Roughly 70 percent of all the poor are women.

6. Education standards have suffered. Increasingly, parents are unable to send their children to school even if it is free, because the children are needed at home to bring in the little extra income they can get from working at a very early age.

7. Mexico is an OECD member country. But beyond agreements nominally established with Central American countries, it does not have a policy of cooperation with relatively less developed countries. The government has bought into the idea that foreign trade is a cooperation policy per se. When we look at the Human Development Index for local and regional levels (for instance, the state of Chiapas), the contrasts are as sharp as those that exist between the OECD countries and sub–Saharan Africa. While Forbes magazine lists 24 Mexican individuals as members of the club of billionaires, over 17 million Mexicans barely survive on less than $1 a day.

8. The several structural adjustment policy packages implemented since 1982, and especially the draconian adjustment program enforced by the U.S. Treasury, the IMF, and the World Bank since February 1995, have increasingly polarized Mexican society. The poor have once again borne the brunt of the crisis. Although social programs are nominally protected, NAFTA and the economic liberalization process have put enormous pressure on health, food and nutrition, and environmental and education programs.

9. The Mexican government has no social development strategy. It believes that "the market" will take care of social and developmental needs. As for the 20/20 compact, the Mexican government wants to have it both ways: to be considered both an OECD country, which doesn’t give official development aid, and a developing country, which is entitled to receive aid.

Concrete Plan and Strategy

Fourteen months into the Zedillo administration, the government’s economic plan has no social development component. It now seems extremely unlikely that Zedillo will come close to delivering on his promise of "well–being for your family". There is no specific policy to create jobs, build new and affordable housing, and provide health services and education to those Mexicans who live in poverty or outright misery.

The government has not produced a National Poverty Eradicaton Plan. The blueprint for economic policy is supposedly the National Development Plan, 1995–2000. However, the financial bailout package engineered by the Clinton administration in February 1995 –which is intended to make sure that Mexico will service its foreign debt without interruption– has taken precedence over the NDP.

In the 1996 budget, the federal government has allocated 11 billion pesos (US$1.42 billion) to poverty eradication, while over 84 billion pesos (US$10.8 billion), over seven times as much, will go to rescue the troubled Mexican banks.

Upon our return from Copenhagen, NGOs, lawmakers, and government officials met to establish a national committee to follow up on the commitments of the UN Social Summit. The president of the Social Development Committee in the Chamber of Deputies is now drafting a National Law for Social Development, and a coalition of NGOs have submitted a proposal in this regard.

On the other hand, it has not been possible to formally establish such a committee for the Beijing process. Although the UN has proclaimed 1996 as the International Year for the Eradication of Poverty, the programs to be implemented by the different agencies are still to be made public.

A healthy relationship between civil society and the state has not yet been achieved. That is, at present indicators that allow citizens to measure and evaluate their engagement in the social and economic process have not yet been set up. However, several initiatives are already in motion, with different degrees of progress:

* Debt Watch (Oxfam partners network): Monitors the impact of internal and external debt on social development.

* National Network of Networks (Red de Redes): This group is putting together an alternative social development proposal.

* Impact of Adjustment on Women (Gloria Tello, Sedepac): Tracks the impact of structural adjustment on women.

* Inter–American Development Bank (IDB) Network: On January 18, 1996, in Guadalajara, two dozen Mexican NGOs established a network to carry out liaison with the IDB. Equipo PUEBLO (EP) is also active in the Latin American and Caribbean Network on Multilateral Banks (RedBancos).

* Equipo PUEBLO: A member of the NGO Working Group on the World Bank, Equipo PUEBLO has focused on monitoring World Bank projects and policies. We have repeatedly requested World Bank documents such as the Country Assistance Strategy (CAS) and the Participatory Poverty Assessment (PPA) on Mexico. The Bank has formally refused to share those documents with us, although we got a copy of the CAS through our own sources in Washington. The CAS basically ratifies the contractionist policies of the structural adjustment program, which is certain to have a negative impact on poverty.

* Observatorio Social: A specialized NGO based in Guadalajara, Observatorio Social has recently been established to monitor economic and social statistics provided by official government sources.

* Alternative Budget Project: This project will shortly be implemented by Equipo PUEBLO in coordination with other NGOs. In the Alternative Budget, revenue and spending priorities will be established according to social and human development guidelines. This exercise will learn from similar projects in Brazil (INESC, IBASE) and Canada (Canadian Centre for Policy Alternatives [CCPA] and CHOICES).

* NAFTA Watch: the Mexican Action Network on Free Trade (RMALC) has worked on NAFTA and hemispheric integration since 1991. It continues to monitor the impact of NAFTA on the economy, labor, and the environment and it has proposed an alternative trade and development agreement for the region. Equipo PUEBLO has put forward a joint report with The Development GAP for Alternative Policies (DGAP) and the Institute for Policy Studies (IPS), both Washington–based, that will be sent separately ("No Laughter in NAFTA").

As for the Beijing process, there is already a loose coordination between NGOs: the National Network of Women’s Organizations ("For a Feminist Millenium"). There are several technical groups on topics such as poverty and development, including one that will work on the World Bank, coordinated at the Latin American level by Laura Frade of Mexico.

On March 23, 1996, over 500 women from all over Mexico will meet to set the social development and gender agenda for Mexico. The government’s National Program for Women focuses on reproductive health but fails to address social, political, and economic issues. Finally, most of the citizen and social networks mentioned above, with others like El Barzon (a national consumers union) have put together an Alternative Economic Strategy for National Development, which from September 20 to November 20, 1995, was endorsed by over 428,000 Mexicans. This strategy incorporates most of the elements for a social development strategy mentioned above.