Poverty in Mexico and Oaxaca Fuels Conflict

Winter 2006

About 30 million Mexicans survive on less than 30 pesos a day — not quite $3. The minimum wage is 45 pesos. The federal government estimates that 37.7 percent of Mexico's 106 million citizens — 40 million people — live in poverty. Some 25 million, or 23.6 percent, live in extreme poverty. In rural Mexico, more than ten million people have a daily income of less than 12 pesos — a little over a dollar. Mexican income is falling faster than that of any other Latin American country, according to the International Labor Organization.

In the southern state of Oaxaca that category of extreme poverty encompasses 75 percent of its 3.4 million residents, according to EDUCA, an education and development organization. That makes Oaxaca the second-poorest state in Mexico, after Chiapas.

Lack of economic opportunity in Oaxaca's villages is a result of Mexican economic development policies. For more than two decades, under pressure from the World Bank, the International Monetary Fund, and conditions placed on U.S. bank loans and bailouts, the government has encouraged foreign investment while cutting expenditures intended to raise rural incomes. Prices have risen dramatically since the government eliminated subsidies for necessities like gasoline, electricity, bus fares, tortillas, and milk. Lest one assume that low prices compensate for small incomes, a trip to a Mexican grocery store reveals that a gallon of milk sells for more than $3 — often a higher price than its equivalent in the United States.

The CONASUPO stores, which purchased corn at higher prices from farmers to help them stay on the land, and sold tortillas, milk, and food to poor urban consumers, were discontinued. Meanwhile, government businesses were sold to private investors. Foreigners with money to buy were allowed to own land and factories anywhere in Mexico, without Mexican partners. The oil income, which could have financed rural credit, and given small farmers at least a fighting chance to survive, was instead used to service debt payments — a condition of the Clinton administration's 1994 bailout.

Meanwhile, other reforms make rural survival still more difficult. To encourage foreign investment in land, former President Carlos Salinas de Gortari, probably the most corrupt in recent history, radically changed the land reform protections in the Constitution's Article 27. The communal ejido property system was privatized. Millions of small village families, who have farmed corn, beans, and vegetables for centuries, have found themselves with no land at all over the last two decades. As a result, they've joined a wave of wage labor to northern states, producing fruit and vegetables for export to the United States. That flow of people has crossed the border into the United States as well.

Thousands of indigenous people leave Oaxaca's hillside villages for the United States every year. Among Mexican states, Oaxaca has the second-highest concentration of indigenous residents. They leave in part because a repressive political system thwarts the kind of economic development that could lift income in the poorest rural areas. And as lack of development pushes people off the land, they find their way to other parts of Mexico or the United States, where they often live in poverty even as they send money home.

"Migration is a necessity, not a choice," explains Romualdo Juan Gutierrez Cortez, a teacher in Santiago Juxtlahuaca, in Oaxaca's rural Mixteca region. "There is no work here. You can't tell a child to study to be a doctor if there is no work for doctors in Mexico. It is a very daunting task for a Mexican teacher to convince students to get an education and stay in the country. It is disheartening to see a student go through many hardships to get an education here in Mexico and become a professional, and then later in the United States do manual labor. Sometimes those with an education are working side by side with others who do not even know how to read."

This economic reality was the central issue in this year's heated presidential election, in which the left called for a change in direction, only to be defeated by an elite determined to stay the course using any means necessary, including electoral fraud.

— David Bacon

Winter 2006