Above photo: Protesters march during a demonstration against the rising prices of gasoline enforced by the Mexican government at downtown in Mexico City, Mexico, Jan. 7, 2017. The sign reads, “Out Pena. No more high prices of gasoline.” Photo:Reuters
Consumption Tax on Oil Catalyzes Popular Protests
Deep disdain for President Enrique Pina Nieto has opened up the possibility of an electoral victory for the left, says Professor John Ackerman.
KIM BROWN: Welcome to The Real News. I’m Kim Brown in Baltimore.
During the past week, protests took place throughout Mexico in reaction to a 20% price increase for gasoline. The protests have so far resulted in four deaths and the arrests of over 700 people. Also, over 300 stores are said to have been looted throughout the country.
The gasoline price increase is part of a plan by President Enrique Peña Nieto to eliminate subsidies in the wake of the partial privatization of the country’s oil industry. On Wednesday, President Peña Nieto vowed to continue with the price increases despite the protests.
Well, joining us today from Mexico City to analyze the situation in Mexico, we’re joined by John Ackerman. John is a professor at the National Autonomous University of Mexico. He’s also Editor-in-Chief of the Mexican Law Review and a columnist with both La Jornada newspaper and Proceso magazine. John, thank you so much for being here.
JOHN ACKERMAN: Pleasure, as always, to be on The Real News Network.
KIM BROWN: Appreciate it, John. So, John, give us some background about these protests because people are said to be reacting to the price increase of gasoline. So, is that all? Or is there more to this?
JOHN ACKERMAN: No, this is not just about gas or gas prices. This is another step in the collapse of the legitimacy of the ruling government, the ruling regime. We can compare it, I think, to the government of Carlos Andrés Pérez in Venezuela about 25 years ago, the beginning of the ’90s. Carlos Andrés Pérez came back for his second presidency, and one of his most important reforms was more privatizing — they already had more privatizing then was in Mexico but deepening the privatization of oil in Venezuela. This lead to a fiscal crisis of the state and lead to widespread protests and the collapse of what used to be considered the most stable, centralist democracy in Latin America — Venezuela. And we had a revolution, a peaceful revolution, which lead to a new constitution, lead to a new government. And this is the process we’re in the middle of in Mexico.
Now, I’m not trying to say that you know, we’re going to have a Chávez coming in, or Maduro, or that Mexico is going to follow the path of Venezuela — for good or for bad, or however you want to look at it — but Mexico is going through a collapse of its sitting government and this is being expressed through the question of oil.
When Enrique Peña Nieto came in, in 2012, one of his most important policy programs was to privatize oil. As a result of this oil privatization, he promised that oil prices would come down and that Mexico would grow through increased international investment.
Well, this 20% increase from one day to the next on New Year’s Day of 2017 has finally convinced the Mexican people demonstrating this that it was all just a lie from the very beginning. He did privatize oil but it was not for the benefit of Mexicans but for the benefit of his friends and the big oil companies. And so, this is finally sinking in with the Mexican people — and that’s what we’re seeing with these protests explicitly against the gas hike, but more generally against authoritarianism and oppression in Mexico.
KIM BROWN: Well, John, then it begs the question, I mean, do you think the situation could endanger the president’s position? Because according to polls, his popularity was already was already at a historic low.
JOHN ACKERMAN: Yes. Enrique Peña Nieto is the most despised, I would say, President we’ve had in Mexico in recent history. Not even, you know, Carlos Slim, or Vicente Fox, or Felipe Calderón, who also got very low on their public opinion ratings, did not get as low as Enrique Peña Nieto. Mexico had been until Peña Nieto an exceptional Latin America. The Mexican people, although they saw there were serious problems with neoliberalism, repression, authoritarianism, in the end, they kind of hoped or believed that the President was going to save them, that he was on their side of the people. But with Enrique Peña Nieto this has changed.
Now Peña Nieto has approval ratings down in, you know, 10, 15… 20% is the highest number I’ve seen in recent polls. And he gave a State of the… you know, a national address on all the television channels yesterday, at night, and he looked pretty tired. You could note it in his face. You could note it in his expression. He himself seems to kind of want to pack his bags. He’s still got another two years left, which could be too long for him.
One of the good opportunities is that, you know, we do have elections coming up next year in 2018, a federal presidential election, also for national congress, lots of state governments. And so that could be an opportunity for reviving politics and democracy in Mexico.
KIM BROWN: So, what is the situation like in Mexico at the moment? I mean, does it look like the protests will expand further? Or are they decreasing?
JOHN ACKERMAN: Okay, well, what’s happening in Mexico today — there are really two separate types of protests or actions going on. On one hand, we have peaceful protests — again, for gas hikes and broader against Peña Nieto and against, you know, neoliberalism. People are taking highways, they’re peaceful but they are strong protests — they’re closing off important highways, giving free passage through toll roads, cordoning off gas stations which have now been privatized, which are no longer, many of them Pemex, the national company, but are now run by private corporations.
And so that’s been happening pretty much peacefully and it’s been growing — particularly of course, you know, taxi drivers, public transportation drivers, have been the ones that have been most active in this because they’re the ones who are going to be hurt the most. It’s going to be hard for them to raise the prices for the people who are using public transit or taxies but they’re going to have to eat up that 20% increase directly in their income.
On the other hand, there have been some violent actions. I would not call them protest actions. In fact, the information which I have, and many journalists have been looking for this can see, is that most if not all of riots have (audio difficulty) …provoked by the government itself.
There are plenty of videos, for instance, we can see in which the police itself has been protecting these protestors, supposed protestors. There are lots of reports of youth being hired by the police, being paid 800 pesos, 1,000 pesos in order to do rioting. It looks like a concerted strategy by the regime itself to try to discredit the peaceful protests against the gas hike.
So, we need to be very clear about these two different manifestations. There’s no evidence that any of the peaceful protests have then gone to take over or steal goods from these big supermarkets. These are two independent phenomena: one being produced by the government itself, provocateurs, classic strategy of the Mexican government; on the other hand, authentically angered citizens who are protesting against the gas hike.
KIM BROWN: John, I know you said that these protests are not solely because of the 20% increase in the price of gasoline, though, that seems to have been the catalyst. But it’s kind of ironic that Mexico, the government decided to enact these price hikes shortly after opening up some deep water tracks for deep oil exploration for the purpose of getting more gas and oil out of Mexican waters. I mean, these things seem to be relatively close together on the calendar, are they not?
JOHN ACKERMAN: Right. Exactly. I mean, this is why people are so angry because Peña Nieto has been promising them all along that the privatization of oil was going to lead to the reduction of prices. The problem is that it is just not the case — and as many of us knew from the very beginning, if you privatize the oil, you’re going to get a fiscal crisis. And the government is now desperate to get money from any source possible and one of the easiest ways is on this consumption tax on oil, and so they are trying to bring it in, in order to avoid a complete collapse of the government. But, by doing so, they’re angering more the people. So, it’s a vicious cycle which is really starting to bring this government down.
These new contracts for deep oil are private contracts in which there’s a big question about what percentage is actually going to get into the Mexican government’s coffers and be able to be used for social services, for instance? Because of the low price of oil, Mexico has been forced to sweeten these deals and turn them into, you know, real gifts for the international oil corporations.
And so, Mexico is getting less and less income out of oil and the need for hospitals and schools are today just as important as ever been before. So, we’re getting this kind of crisis and that’s why I compare this from the top to the situation in Venezuela in the ’90s or in Bolivia in the beginning of the 21st century — there were protests over access to water, for instance, which of course were not just about water but was about, in general, the privatization of public services.
Mexico up until now had been sort of an exception to this social protest and this political move towards the left. We’ve been lost in neoliberalism forever, seemingly, but perhaps Mexico might finally be getting onto this left-wing wave, ironically, precisely at the moment in which, you know, the South American countries are shifting back to the right.
KIM BROWN: Well, you have to explain to us, like, how other political sectors are reacting to the protests. Particularly, what is the reaction from the leader of the country’s left, Andrés Manuel López Obrador and his new political party MORENA? So, in a recent article for the publication NACLA, you suggested that MORENA was enjoying a great boost in popularity already before these protests and lootings began. So, how are these developments affecting him and his party?
JOHN ACKERMAN: Yes. López Obrador achieved in 2016 what neither Bernie Sanders nor Pablo Iglesias from Podemos in Spain achieved in 2016. Both Podemos and Bernie Sanders did a great job, but in the end, Bernie Sanders, you know, was campaigning for Hillary Clinton and Podemos, in its second round of the parliamentary elections in Spain, actually reduced its voting and the new president is the same old president, the right-wing in Spain.
While in 2016 what MORENA and López Obrador achieved is to really this… overreach and get … I’m confusing Spanish. I’m sorry for this. But commit the so-desired sort of “paso,” which is when the new left really just sort of goes by. The old left leaves — the PRD which is our old left, our Democratic party, it’s the, you know, socialist party of France — has really been left in the wayside and MORENA has really positioned itself as really the number one contender for the 2018 elections.
Now, with these oil protests, López Obrador has been supporting the protests, of course, the peaceful protests, and has called publicly for a special session of Congress to revoke the increase in the gas prices. Peña Nieto responded to that yesterday, saying, “No, we’re going straight ahead. We’re not going to change things.” And so, this is a rebuke to López Obrador but, in the end, demonstrates that López Obrador is the only one who really defends the budget of the people and I think, in the end, this is going to strengthen López Obrador.
One of the reason why they’ve been using all these provocateurs to create scenes of violence is precisely to try to blame MORENA and López Obrador for the violence and try to use this to reduce his prestige. But he’s playing it, I think, quite well, quite institutionally, calling for peaceful protests and calling for the political organization of Mexican people so as to change the federal government in 2018.
KIM BROWN: Indeed. Well, John, we certainly appreciate you giving us your expertise and updating us on the situation in Mexico. We hope to check in with you soon to find out how these developments are continuing to progress.
JOHN ACKERMAN: Thank you so much, Kim. A pleasure, as always.
KIM BROWN: All right. We’ve been joined by John Ackerman. He is a professor at the National Autonomous University of Mexico. He’s also Editor-in-Chief of the Mexican Law Review and you can check out his columns in both La Jornada newspaper and the Proceso magazine. John, we appreciate your time.
JOHN ACKERMAN: Thank you.
KIM BROWN: Thanks for watching The Real News Network.