Carlos Salinas

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Carlos Salinas de Gortari (born 3 April 1948 in Mexico City) was President of Mexico from 1988 to 1994.

Contents

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Political career prior to the presidency

Salinas graduated with a degree in economics from the National Autonomous University of Mexico in 1969. He obtained a master's degree in Public Administration in 1973, a master's in Political Economics in 1976 and a Ph.D in Political Economics and Government, all from Harvard University. Upon his return to Mexico he became a professor of his alma mater. Although a member of the Institutional Revolutionary Party (PRI) since his student days, it was not until the presidency of Miguel de la Madrid that he was assigned a public post as minister of the Secretary of Planning and Budget (Secretaría de Planeación y Presupuesto) from 1982-1987.

The politic atmosphere in Mexico began to change during the 1980s. The country was experiencing a serious economic crisis, mainly caused by the splurges of previous administration and a drastic fall in the price of oil, which forced the country into default. Several important members of the PRI resigned, amongst then Cuahutémoc Cárdenas, son of Lázaro Cárdenas an extremely popular president during the 1930s. The 1985 earthquake, where 10.000 died (officially) shook the society, and has been considered as one of the catalyst of the awakening of democracy and the necessity of change. Miguel de la Madrid's administration provided a very inefficient response to the catastrophe, while the society itself organized successful rescue teams, many of them led by prominent left-wing intellectuals.

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Elections

Cárdenas registered as an opposition candidate from a left-wing coalition called Frente Democrático Nacional. He rapidly became a popular figure, and became the first opposition candidate to fill the Zocalo with sympathizers and to seriously threaten the PRI which had won all presidential elections since its inception in 1929. The Ministry of Interior (Secretaría de Gobernación), through its Federal Electoral Commission, was the institution in charge of the electoral process, and installed a modern computing system to count the votes. On 6 July, 1988 the day of the elections, the "system shut down" (se cayó el sistema), and when it was finally restored, Carlos Salinas was declared the official winner, even though several national and international surveys had declared Cárdenas the winner. Even though the elections are extremely controversial, and some declare that Salinas won legally, the expression se cayó el sistema became a colloquial euphemism for electoral fraud.

The process involved two suspicious shutdowns of the computer system used to keep track of the number of votes. Suspicions later grew as the Mexican Congress voted (the majority of the opposition included) to destroy without opening the electoral documentation that could prove otherwise. Other people believed that Salinas, in fact won, the ballot, albeit probably not with an absolute majority as the official figures suggested – which in fact is not required under Mexican election law.

During an interview for Televisa in September 2005, Miguel de la Madrid acknowledged that the PRI lost the 1988 elections. However, he immediately cleared his comment by saying that the PRI had "at least lost a significant amount of voters". Asked for comment on de la Madrid's statements, Senator Manuel Bartlet, who was the president of the Comisión Federal Electoral ("Federal Electoral Commission") during the de la Madrid administration, declared Salinas won the election albeit with the smallest margin of any PRI candidate before him. He attributed de la Madrid's remarks to his old age (71 years old as of 2005) and the remarks being taken out of context by journalist Carlos Loret de Mola.

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Presidency

In the early years of his term, President Salinas launched bold initiatives such as the reversal of the 1982 Mexican bank nationalization, restoring official relationships with the Catholic Church and the Vatican State, changing land property legislation, and most importantly negotiating NAFTA with the United States and Canada.

While an overall analysis of his term remains a controversial topic in Mexican politics, Carlos Salinas de Gortari's term made significant changes in the following areas:

  • Renegotiated the external debt. Had he not accomplished the renegotiation, Mexico would have defaulted in 1989-1990.
  • From 1975-1988, inflation had reached historic levels, up to a peak of 159.17% in 1987, a year before his term started. By the end of his term, inflation had been reduced to 7.05% in 1994, the lowest figure in 22 years.
  • From 1975-1988, the peso had devaluated from 12.50 MXP per dollar, to 2650.00 MXP per dollar. During his term, the peso devaluated from 2650.00 MXP to 3600.00 MXP or 3.60 MXN, by 30 November, 1994, the last day of his term; thus the peso devaluated far less than it had in the two previous terms
  • He reformed the Electoral System, making it citizen-controlled, and independent of the Secretaría de Gobernación (Interior minister) and introduced the "Credencial para Votar" (Voting Credential) as the universal and free I.D. in Mexico (thus, automatically registering all citizens in the electoral system, allowing them to vote without bureaucratic hindrances and without pre-registering as in the U.S.). The 1994 election were the first to have international observers, and were considered, at that time, the fairest elections in the century, though not free of controversy.
  • He reformed the Clerical Laws which had forbidden catholic priests from their citizen's right to vote, and established a new relationship between State and Church, which had been severely damaged after the Cristero War. The new laws also allowed the Catholic churches to own their own buildings (which had been nationalized).
  • Negotiated the North American Free Trade Agreement (NAFTA), with the United States and Canada.
  • He initiated a privatization program, by which the government retained only a few of the hundreds of companies and small business that were nationalized, mainly during the 1970s. One of the most important privatizations was, undoubtedly, was Telmex, which remained a monopoly until mid-1990s, and who was sold to Carlos Slim. Arguably, Salinas might have privileged him, as some critics point out, in the same way he had privileged Salinas Pliego with the privatization of Imevisión (later TVAzteca) over the rest of the bidders.
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Election year and economic collapse

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Salinas splurge

Salinas de Gortari's popularity and credibility at the time was still high; even though his government's currency policy put an unbelievable strain on the nation's finances, the resulting economic bubble gave Mexico a prosperity not seen in a generation. This period of rapid growth coupled with low inflation prompted some political thinkers and the media to state that "Mexico was on the verge of becoming a First World nation.", and in fact, it was the first of the "newly industrialized nations" to be admitted into the OECD in May, 1994. It was a known fact that the peso was overvalued since it was kept at a fix rate within a variation band, but the extent of the Mexican economy's vulnerability was either not well-known or downplayed by Salinas de Gortari's tame politicos and media. Nonetheless this vulnerability was further aggravated by several unexpected events (like the uprising of the EZLN in Chiapas) and macroeconomic mistakes of the last year of his administration.

Several economists and historians, amongst them Hufbauer and Schoot (2005) have analyzed some of the events and policy mistakes that precipitated the crisis of December, 1994. Salinas, following the PRI tradition on every election year, launched an amazingly high spending splurge to finance popular projects (and thus obtain sympathy for his own party), which translated into a historically high deficit. This budget deficit was coupled with a current account deficit, fueled by excessive consumer spending as allowed by the overvalued peso. In order to finance this deficit, Salinas administration issued the tesobonos, an attractive type of debt instrument that insured payment in dollars instead of pesos, given the fact that three important events had shaken the investors confidence in the stability of the country: the aforementioned zapatista uprising, the assassination of Luis Donaldo Colosio, the most-likely to win candidate of his own party, and the assassination of Francisco Ruiz Massieu, the attorney general in charge of the investigation of Colosio's assassination.

All of these, and the increasing current account deficit fostered by consumer binding and government spending, caused alarm amongst savvy investors that had bought the tesobonos, mainly Mexican and a few foreigners, who sold them rapidly, depleting the already low central bank reserves (which eventually hit a low record of merely 9 billion).The economic orthodox thing to do, in order to maintain the fixed exchange rate functioning (at 3.3 pesos per dollar, within a variation band), would have been to sharply increase interest rates by allowing the monetary base to shrink, as dollars were being withdrawn from the reserves (Hufbauer & Schott, 2005). Given the fact that it was an election year, whose outcome might have changed as a result of a pre-election-day economic downturn, Banco de Mexico decided to buy Mexican Treasury Securities in order to maintain the monetary base, and thus the interest rates from rising. This, in turn, caused an even more dramatic decline in the dollar reserves. These decisions aggravated the already delicate situation, to a point in which the crisis became inevitable and devaluation was only one of many necessary adjustments. Nonetheless, nothing was done during the last 5 months of Salinas administration even after the elections were held in July of that year. Some critics presume this was done in order to maintain Salinas popularity who has seeking international support to become director general of the WTO. Zedillo took office on 1 December, 1994.

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December mistake

See also 1994 economic crisis in Mexico.

A few days after a private meeting Zedillo suddenly announced his government would let the fixed rate band to increase 15 percent (up to 4 pesos per US dollar), by stopping the previous administration unorthodox measures to keep it at the previous fixed level (by selling dollars, assuming debt, and so on). This measure, however, was not enough, and the government was even unable to hold this line, and decided to let it float. While experts agree that a devaluation was necessary, some critics of Zedillo's incumbent 22-day old administration, argue that although economically coherent, the way it was handled was politically incorrect. By having announced its plans for devaluation, they argue that many foreigners withdrew their investments, thus aggravating the effects. Whether the effects were aggravated further or not, the result was that the peso crashed under a floating regime from four pesos to the dollar (with the previous increase of 15%) to 7.2 to the dollar in the space of a week.

Mexican businesses with debts to be paid in dollars, or that relied on supplies bought from the USA, suffered an immediate hit, with mass industrial lay-offs and several suicides. Businesses whose executives attended the meeting at Zedillo's office were spared the nightmare — forewarned, they quickly bought dollars and renegotiated their contracts into pesos. To make matters worse, the devaluation announcement was made mid-week, on a Wednesday, and for the remainder of the week foreign investors fled the Mexican market without any government action to prevent or discourage it until following Monday when it was too late.

Salinas faced widespread criticism in Mexico. He was blamed by the majority of the population for the collapse of the economy, and the method of his privatization of several government-run businesses (which had benefited a few of his friends). Moreover, he was blamed for allowing corruption, cronyism and drug dealing friendships. With respect to the collapse of the economy he rapidly responded by blaming Zedillo's inept handling of the situation, coining the term "December Mistake" to refer to the crisis and Zedillo's mistakes. He then argued that he had talked to Zedillo of a possibility of "sharing the burden" of the devaluation by allowing the peso to devaluate a certain percent before his term was over, and the rest of the necessary devaluation would have been done during Zedillo's administration.

The December Mistake caused so much outrage that for a long time, Salinas did not dare return to Mexico (he was campaigning worldwide for WTO head at the time). The incident also served to make it clear that his influence (if any) on the Zedillo administration was over.

Salinas was blamed for allegedly ignoring the economic problems of his administration, and, his prestige lost, he exiled himself to Dublin, Ireland, where he eventually married again. Although he is free to return to Mexico and does so from time to time, he always stirs controversy. His brother Raúl went to jail accused of masterminding a political assassination of Jose Francisco Ruiz Massieu, a member of their own party and of committing fraud while working for the government during Carlos's presidency.

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Salinas's book

Image:Nafta.jpg In the last years of Zedillo's term, Salinas came to Mexico to announce the publication of his highly controversial, thousand-page book, Mexico: The Policy and the Politics of Modernization. Written during his stay in Ireland (it was his full time job, in effect) and full of citations of press articles and political memoirs, it defended his achievements and blamed Zedillo for the crisis that followed the Salinas administration. Denying all accusations against him, including plotting Luis Donaldo Colosio's murder, his visit shocked the political scene of Mexico, with surprise interviews (most arranged by him as part of his book's release) in major media. A few days later, however, illegal recordings of a conversation between jailed brother Raúl and one of his sisters were leaked to the media, and their conversation about who really owned the family fortune and Raúl's imprisonment quickly put an end to the affair.

The book – a thick volume with quite small print, every page filled with footnotes and margin notes – proved as controversial as Salinas himself. Its objective value is questioned since it is clearly a document written in self-defense, but it still remains a prime source of material for the scholar, clarifying how Salinas viewed himself (and, critics add, demonstrating his pride and selfishness). One group of bank debtors formed after the December Mistake (El Barzón) declared their outrage at what they saw as profiteering from their tragedy, and took the decision to transcribe the whole book, respecting even its layout, and to give it away electronically, and they did just that, in spite of legal threats from the publisher. Salinas probably did not mind – he had already announced that he would donate a copy to each public library in the country.

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Later years

He divorced and married again. He seems to spend most of his time in Europe with regular travel to Mexico, but he is no longer the media sensation he was. The Mayor of Mexico City, Andrés Manuel López Obrador, of the left-wing PRD usually blames him for being the mastermind of what he perceives as confabulations against his government and presidential ambitions, not calling him by name but as the unmentionable.

On 6 December 2004, Salinas's youngest brother, Enrique, was found dead inside his car with a plastic bag strapped around his head. At first authorities were reluctant to talk of homicide, but later admitted it was, while denying any political implications. As days passed, authorities believed it was either an accidental killing in an extortion attempt by a close friend or associate, or a passional crime involving a member of his family. In either case, it probably was either improvised or carried out by inexperienced criminals. Enrique's body was abandoned in his car in a zone with surveillance cameras. The tapes show confusion and disorientation by the people who drove Enrique's car to the place and left in another vehicle. Enrique's cell phone was used after his death, and left in the car. Unknown fingerprints were left in the car, and human hairs were found in Enrique's fist. It was determined he was knocked unconscious and killed by suffocation, but not by the plastic bag found with his body. Apparently he knew his attackers and it is possible that he voluntarily met with them.

Many members of his family were called to render testimony, including jailed brother Raúl but not Carlos. Some years ago Enrique was suspected of being financial cover for his elder brothers Raúl and Carlos and had an account in a Swiss bank frozen, but most of the time Enrique held a low profile, being uninvolved with politics and mostly an entrepreneur practically unknown to the public. After his death, it was revealed he was currently being investigated in France and by Interpol; that he had some financial problems, and shortly before his death he wrote a letter where he explained in vague terms that he was subjected to terrible pressure by leaks (presumably a magazine article published about him some time before) and friends, and was afraid for his and his family's well being.

In January 2005, authorities were forced to confirm the media leak that there was the possibility Enrique was killed by agents of the AFI (Mexico's federal criminal police force). According to this hypothesis, he had financial problems with his ex-wife and was advised by his lawyer to hire some AFI agents the lawyer knew to fix the problem. Enrique contacted them but later reached an agreement with his ex-wife and tried to forget the matter, but the agents blackmailed and ultimately murdered him. Authorities also acknowledged they were suspicious of members of Enrique's family because they gave conflicting testimony regarding the hours before the murder and their relationship with Enrique was difficult. At roughly the same time, French authorities revealed they were prosecuting brother Raúl and other members of the family for money laundering.

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References

Template:Start box Template:Succession box Template:End boxde:Carlos Salinas de Gortari es:Carlos Salinas eo:Carlos Salinas de Gortari fr:Carlos Salinas de Gortari it:Carlos Salinas nl:Carlos Salinas ja:カルロス・サリナス・デ・ゴルタリ

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