First posted 02 March 2006, Mexico City
“Jimmy joined the army ‘cos he had no place to go. Ain’t nobody hiring round here since all the jobs went down to Mexico.” So says Steve Earle in a song I like. It’s a common theme – everyone knows that cheap Mexican labour is costing American jobs. What not everyone knows is that China is in turn threatening Mexican manufacturing. I found that out in a most iconic manner – at a guitar-makers carpentry. Yes – the Mexican guitar industry is under threat from cheap Chinese imports.
Obviously this is quite funny. The Mexican mariachi is an international icon while as far as I am aware they don’t even play guitars in China (although I did once have t-shirt that said Wok ‘n’ Wol on it). Yet walk into any guitar shop in Mexico City and more than likely the first ten acoustic guitars you pick up will be Made in China by some horrific machine (have become terrible guitar snob since visiting the workshop). Handicrafts in general (I learn later in discussion with UN colleagues), which are an important source of income for low-income Mexicans, now compete with cheap imports from China.
Never underestimate Mexican hospitality (rule for life). I know people say that about every country they go to (except France) but it is strikingly true about Mexicans (at least those that I’ve met). I have been here under three weeks but it would take more like three years to do/see/drink all the things people have invited me to. (I have developed an extensive list of white lies which I deploy simply to ensure that I get my work done.)
So it was not surprising when my trip to Ricardo and Omar´s guitar workshop on Saturday (I want to buy a guitar) turned into a three hour setting of the world to rights, followed by dinner. They say that time is money, but in Mexico it is far more valuable than that. I think it is a combination of pride in their country, a relaxed attitude to strangers and, generally, time on their hands that makes Mexicans such easy people to get to know. And of course, it is through these kind of chats that you learn surprising things about politics and the economy (god, am I really that boring).
Apart from the threat of incoming Chinese guitars (possibly slightly less scary than Chinese guitarists) I learnt something else while chatting to Ricardo and Omar which will certainly influence my work here in Mexico. I am investigating the impact of overseas aid on development and poverty reduction in this part of the world. My thesis, building on work already being done at Christian Aid, is that there is an over-dependence on foreign ‘inflows’ (such as aid, loans and private investment) to the detriment of properly mobilising resources already in the country. We are right (as usual). I have lost count of the amount of Mexicans that have told me that, “The problem is not that we don’t have money. We do. The problem is what we do with it.”
A vital component is tax. Rich countries collect a lot more tax than Mexico and its neighbours do. In 2000 government tax revenue in the UK was almost 40% of GDP, and that is lower than most other European countries (Sweden reached 55% in 1990). The figure for Mexico is 17%, while Nicaragua collects about 20% (the same as it receives in foreign aid). One of the most important things developing countries can do, if they really mean to provide decent services to their citizens, is collect tax better.
But if you think there is scepticism about how taxes are spent in the UK, you need to share a few moments with Ricardo and Omar. It is not that they are against redistribution as a concept – they agree in principle with raising taxes on middle and high earners. It is simply that they have no faith in the authorities to do anything sensible with the money they raise. And they point to scandal after scandal to support their concerns. So they will not be voting for tax rises in the coming election.
And it is not just central government they loathe. They are livid at the increased clamping and ticketing of parked cars by the capital’s authorities not so much because of the inconvenience this new assault causes to the honest driver, but because they think the money raised will be spent not on road improvements but on the favoured drink of some politician’s girlfriend. Until there is public confidence that revenues will be used wisely, there will be no support for increases in taxes in Mexico, and ditto the rest of Central America I expect. And that reality has to affect our critique of the role foreign sources of money play in development.
It is also why Andres Manuel Lopez Obrador would be a good thing for Mexico. The former Mayor of Mexico City addressed thousands of supporters on Sunday in the Zócalo, the massive square in the Centro Historico, and I went along to watch. Lopez Obrador has a good chance of becoming the latest President of the New Left on the continent, following the likes of Lula, Chavez, Kirchner, Morales and others. But five years after the people dispatched the institutionally corrupt PRI party – in power for seventy years – Lopez Obrador has more than just his reputation for getting things done for the disadvantaged to commend him. Of all the candidates he is by far the cleanest and most obviously honest. He lives a relatively humble existence, and part of his platform (he leads the PRD coalition) is a reduction in the wages of top politicians and officials.
Ricardo and Omar are sceptical. So are some of my colleagues, who regard him as an untrustworthy populist. So am I. It is good to be sceptical. But elections are about choosing the best that is on offer, not waiting for perfection.
ps ¿Que hora son mi corazón? Went to see Mánu Chao on Friday. He did a cover of Volver.