Documents on Mexican Politics.

False Expectations Regarding Border Development

False Expectations Regarding Border Development

por George Baker (


Once upon a time there was a poor farmer, possibly one in the hinterland of Baja California. The farmer was hard-working, honest and active in the community causes of his nearby village. One day, while working on his farm, a fairy appeared and granted him three wishes. The farmer, astonished, rushed home to consult with his wife about what he should wish for. Sitting at the table in the one room that served as a kitchen, living room and bedroom, the farmer and his wife began to think of how they should use their wishes. Gold? Castles? University education for their five children? Or should they wish for another cow, a few more chickens, and a pig?

Distracted, the farmer said aloud, "I'm so hungry I wish that I had a sausage."

Suddenly, on the table before him was a lean, certified low-fat sausage.

The farmer's wife, furious, began to upbraid him. "You fool! You've wasted one of our wishes. How could you be so stupid? What, compared to a castle, can you do with a sausage?"

The good wife continued in this fashion until the farmer, exasperated, shouted back, "I can't stand another one of your rage attacks. I wish that this sausage were stuck to the end of your nose."

As suddenly as before, the sausage was stuck to the end of the good wife's nose.

Try as they might to pull it off or disguise it, they could not. After much arguing, mutual recriminations and tears, the farmer used his last wish to remove the sausage from his wife's nose. Afterwards, they ate the one sausage and went to bed, the farmer still hungry.

This story makes us ask, what should the farmer have wished for? It also makes us ask, why is it that the power to wish is not the same as the power to have needs of oneself, one's family and community actually fulfilled? Finally, the story makes us realize the terrible consequences of wishing for the wrong thing.

We want to ask these questions in the context of a discussion of the needs and expectations of the faja fronteriza of the United States and Mexico.

The general argument that I wish to make is that the past one hundred and fifty years of a U.S.-Mexico border, counting from the Treaty of Peace and Territorial Limits of 1848, have been characterized by a history of wishing for the wrong things. I shall also insist that misguided wishing has taken place in the capitals of the two countries as much as it has in the faja fronteriza itself. As one border scholar in South Texas puts it, "Here on the border, we are the first to be affected, but the last to be informed, about decisions taken in Mexico City and Washington."

On earlier occasions I have characterized the maquiladora industry as the salchicha, the sausage of the fairy tale, of the U.S.-Mexico border (Baker, 1989, 1990). I now realize that the history of the faja fronteriza since the time of the Second World War is a region where other misguided wishes have been made:

1. Isolation in the border region by nationality, ethnic group and socioeconomic status,

2. Expectations of wealth from proximity of Mexico to the U.S.

3. Long-term, high wage employment in the defense and aerospace industries in U.S. border states,

4. NAFTA as a transnational strategy for sustained economic development,

5. Sustained economic development from a state-owned oil & gas industry in Mexico.

Let us consider each of these misguided wishes in turn.

Cultural and socioeconomic isolation--the distant neighbor effect

Alan Riding's justly famous book, Distant Neighbors (1985) argued, if only implicitly, that the United States and Mexico only knew and understood each other only distantly, despite geographical propinquity. What is not clear in Riding's book is the observation, perhaps equally obvious, that the distant-neighbor effect (if we might call it that) exists on both sides of the U.S.-Mexico border.

Distant neighbors on the U.S. side

On the U.S. side of the border, WASP populations wished for--and, until recently, largely succeeded in having--cultural, intellectual and physical isolation from Mexico. These same WASP border neighborhoods wished for--and, until recently, succeeded in obtaining--high-paying jobs associated with the defense and aerospace industries.

On the U.S. side of the border, there is little contact between the WASPs and WEMCs (White, Euro-Mexican Catholics), even though they may have comparable income levels, education and worldviews. Cultural isolation and discrimination, as we shall see, exists in many other dimensions in the faja fronteriza.

A case in point is the town of Coronado, where I grew up in the 1950s, located some fifteen miles from the U.S.-Mexico border. My father, a naval officer, was transferred to San Diego in 1950 or 1951 as part of the mobilization for the Korean War.

Coronado is one of the prettiest beach towns in the United States. The money it doesn't get from sailors it gets from the tourist and convention trade. The film Some Like It Hot, with Marilyn Monroe, was shot there, as photos on the basement level of the island's grand Hotel del Coronado (the "Del" for locals) will testify.

In my time Coronado was also an upscale town dominated by military and retirement households. Coronado celebrates the Fourth of July with a big parade down its main street: the parade is heavy with military bands, assault vehicles, honor guards and marching units of the Veterans of Foreign Wars.

Needless to say, citizens voted Republican. In a word, the town was redneck, which included layers of xenophobia, antisemitism and racism. I remember the one civic issue that residents discussed in the 1950s: Should they vote in favor of a bridge with San Diego or not? The vote was consistently against it, on the basis that it would bring in too much unwanted traffic. Topics such as relations with Mexico, or the advisability of a militarization of the local and regional economy, did not take place.

Mexico existed in the minds of Coronado residents as a place from which housecleaners came and where liquor could be bought inexpensively. For some years in the 1950s we had a housekeeper named Maria. It was with Maria that I first began to practice speaking Spanish. Later, my parents employed a woman named Carmen to whom, inexplicably, my mother gave the only copies of several large framed photographs of her own wedding and my father as a young naval officer.

When, in the 1970s, with the Oil Boom in Mexico and the progressive over-valuation of the Mexican currency relative to the dollar, Mexicans had unprecedented buying power in upscale border communities. In Coronado, Kippy's, a fashionable women's clothing store on Orange Avenue, enjoyed tens (possibly hundreds) of thousands of dollars of sales annually from Mexican upper-income women during the years 1977-82 (and then again from 1988-94). Kippy's was owned by the Kipperman and Brown families. The families were Jewish. During my last two years of high school, Margie Brown, who was Homecoming Queen in 1959, lived next door to me (there was then a vacant lot between our houses).

There were unspoken rules and invisible lines in Coronado that restricted contact between military and civilian families. My parents did not socialize with non-military families; as a result, they never knew the parents of my friends who not employed by the military. They didn't meet the parents of my girlfriend Susan, nor those of my other neighborhood classmates, Randy West, Ross White or Phil Andreen, to mention three.

I suspect that there were layers of prejudice, in the military families at least, that put additional separation between WASP and non-WASP families. So far as I know, there was never any social contact between the Brown and Baker families. I'm fairly sure that my parents never met the family of my classmate Melton Iwashita, whose parents were Japanese. Randy and I, on the other hand, were invited by the Iwashitas' to many Japanese Buddhist picnics held on the Coronado strand. We would have a great time.

There were only one or two Blacks (they were not called that in the 1950s) in our high school. There were a couple of brothers from Samoa (I remember their sword dance at a school talent show). I have no memory of anyone from Mexico. I call Bill Pope in Albuquerque, a classmate and close friend from Coronado. I tell him what I am up to.

"I remember," Bill began," my grandfather, Captain Baker, saying once that Coronado had the highest per capita membership in the John Birch Society of any city in the country." Bill, who seems to have a better memory of my childhood than I do, quickly reminded me of Emily Delasalas, a classmate.

"She was from a Mexican family. Her mom used to do housecleaning for us when we lived on Alameda Boulevard. Her mom was really a sweet person. I liked her a lot."

"Are you sure her parents were from Mexico?" I asked.

"No, but ask Emily. Do you have your Coronado High School directory? Her number is there. She lives in Missouri."

"Yes, for some reason I always carry the CHS directory with me."

"Adelante, caballero" [get going, then], was the spirit of Bill's advice.

I called Emily's number. A young girl answered. "Is Emily home? This is George Baker."

"Mom, it's for you."

"Hello?" said an older woman's voice.

"Emily, this is George Baker, from Coronado. Que tal?"

"Oh yes, George. Que milagro [What a surprise]!"

Left unsaid in Emily's friendly response was that, so far as I remember, she had not heard my voice in over thirty-five years. Also unsaid was that in high school we had, so far as I remember, very little contact. But we spoke for a half an hour, as if, over the years, we had regularly seen each other at the Coronado parade on the Fourth of July.

Early in the conversation Emily mentioned that she played tennis twice a week, "three times a week in the summer." Only the next day did I see a broader meaning in her playing tennis. I mentioned that my wife and I had played tennis that same morning, and that we were trying to play more often.

"My mom was from a small village in Mexico, my dad from the Philippines. The friends of my parents were mostly Mexican or Filipinos. They didn't have a lot of money. My mom worked as a cocktail waitress, I mean as a caterer, in the homes of naval officers. She also did housekeeping for them. Looking back, I think that my mom got a broader outlook on the possibilities for family life and standards of living in America because of her exposure to the families of naval officers and others for whom she worked. In some way she brought that home to us.

"My mom didn't ask us kids to get good grades, or any thing like that, but I'm really grateful to them for living in Coronado, as it gave me an education and career outlook that I never would have had if I had lived in Chula Vista or San Diego. The only thing my mom asked was that we take piano lessons. I took lessons from Ross White's mother for eleven years. "When I was fourteen I spent part of the summer visiting my mother's hometown outside of Mexico City. We went to parties, to the market, everywhere. I can say that I really bonded with that village. I sometimes imagine that, once we've retired, I could teach English in that village. "I took my daughter there when she was seven, hoping that she might have a similar experience to the one I had when I was a teenager. Her tears as we left made me feel that a bonding had taken place.

"In any case, when I was taking Spanish in Mr. Alvarez's class in Coronado, I recall being embarrassed that I already could speak the language. I would deliberately make mistakes on the tests to make it seem like I was more like the other kids. No one ever encouraged me to speak Spanish. Only much later, in college, did someone tell me how lucky I was to have the ability to speak Spanish. This person suggested that I teach Spanish in a local program. My attitude completely changed after that. "About college, my parents of never spoke about it. The topic of my going to college never was brought up. Only in the junior year of high school, when all the other kids were talking about college, did the thought come to me that I might go also. Then Mr. Schafer, the senior class advisor, suggested that I go into teaching. I had never thought of that possibility before."

I thought to tell Emily that I was in the same family situation in relation to college. My parents never spoke about it, except for my mother who occasionally would say that my dad would be pleased if I went to the Naval Academy as he had done. The purpose of my doing so was not expressed in terms of my educational needs or options for a career, but exclusively in terms of my continuing a naval tradition in the family. My conversation with Emily moved on, however, and I missed the opportunity to mention it. "I never thought of myself as non-White," Emily reflected. I still don't, except under unusual circumstances. My sister, however, is aware of her ethnicity."

"Perhaps because there were so few Hispanic kids in the Coronado schools, there was never a Mexican or Latin in-group or clique with which you would have been identified," I said. "Had you gone to school in Chula Vista things would have been different."

"I suppose so," Emily said, weighing the thought.

"I still go back to Coronado when I can. My brother owns a house there. Sometimes my husband goes with me. We like to be there for the parade." Emily said that she had not been back to Mexico in six years, but hoped to do so soon. I said that I had been "in Mexico City the day before yesterday."

"Que envidia," she said, invoking a Mexican expression for "how lucky you are." Emily and I spoke in Spanish for a few minutes. Hers was rusty but solid. Mine was polished but with structural, probably permanent, grammatical defects.

We spoke briefly `about the alcoholic abuse problem in Coronado. "Of course the Navy presence in Coronado culture was a big factor in the kids taking up alcohol." I told her how seven or eight years ago I had gone to Al-Anon, then to AA, to get a better understanding of myself and the alcoholic culture in which my teenage years were passed.

I told Emily that, as best as I could recall, during my time in the Coronado schools, from fifth grade through high school, we never made a single field trip to Tijuana. We never had an exchange program with Mexico. We never heard a speaker from Mexico at a school function. I do not recall that anything about Mexico was part of the curriculum.

I mentioned that, from speaking by telephone recently with Michael Iwashita, who graduated from Coronado High School this past May (in the rain, he said), that the school's Spanish class makes a trip to the Tijuana Cultural Center. How often, or what at what level, he did not know. I thought I also heard him say that he himself had never been to Tijuana, which, if so, most likely meant that he had never been to Mexico.

Emily said that she herself had been to the Tijuana Cultural Center, that it was a very nice place. Hanging up, I felt good about having that conversation with Emily, an honesty of feeling. I felt that I had made a small gesture of friendship that reflected a change from my earlier indifference to the circumstances, visible and invisible, of Mexican families on both sides of the border.

After talking with Emily I was reminded of my reaction in 1989 to seeing the film La Bomba, the story of Ritchie Valens, a rock singer of my teenage years. My reaction is hard for me to describe, then as now. His song "Donna" was one that I had especially liked. In the first place, I had never realized that Ritchie's real name was Ricardo Valenzuela, and that his family was from Mexico. In the second place, it had never occurred to me that the song had been about his gringa girlfriend whose WASP parents did not want her daughter to date anyone with Mexican roots. The song was born in the pain of the discrimination and racism, the pain of trying to cross one of those invisible lines in la faja fronteriza. I felt that my isolated cultural life in Coronado as a child had been part of this larger structure of denial and oppression. In some way I felt responsible for that denial.

This rather bleak picture is, I'm afraid, the most common one on the U.S. side of the U.S-Mexico border. I know of only one truly brilliant exception: there is an educational exchange program in Arizona called "Hands Across the Border." In the fall the program sends a class of fifth graders from an Arizona school to spend a week in a school in Sonora, and in the spring the kids from the Sonora school spend a week with their gringo playmates in Arizona.

Distant neighbors on the Mexican side

Cultural, political and socioeconomic discrimination on the Mexican side of the U.S.-Mexico border is probably more severe, more intense, than it is on the U.S. side. There are two classes, which, in cruel shorthand, we may call the Brahmin class and the Untouchables. The terms are too stark, too extreme, yet a precise terminology is elusive. As with most countries in the developing world, we know is that there are two classes in Mexico, Los de arriba (those from above) and Los de abajo (those from below), but we need to look for greater precision.

To substitute for "Brahmin" we need a term to refer to those persons whose careers and economic and political status depend on their maintaining sustainable relationships with Mexico City's clase publigestionarial, the policymaking elites in the Government. Clase politica (the political class) is not quite right, for two reasons: it fails to point to Mexico City and it suggests, wrongly, the set of all persons associated with public service. Clase Privilegiada (the Privileged Class) does not have a connotation of public service, but neither does it give the essential clue that the trail of privilege for the entire country starts in Mexico City. I have used the neologism Clase Chilanga (a term introduced in Baker, 1989). I'm not very happy with the term but it has the advantage of definitely pointing toward Mexico City (as a derivative of the standard nickname, chilango, for Mexico City residents) and of not giving a bias toward government employment. It's disadvantage is that it risks trying to sound cute, ironic or judgmental.

It is also difficult to find a true Mexican translation for "untouchables" or "under-class." The idea is to refer to all persons in Mexico whose livelihood, while not in the least independent of decisions taken in Mexico City, are not required to maintain personal and professional ties to Mexico-City based organizations and who, by definition, have no social ties to the Brahmins. The applicable criteria here are therefore as much political and social as they are economic. What term in Spanish fits this definition? Mexicans use the term clase popular as a code word for low-income sectors of the general population, but, again, the term I want is not exclusively defined by income distribution.

The term agachado (bent over, as if under a burden) might work for this purpose, but it sounds anti-government, leftist, as if blaming the Mexican form of government for the existence of this class. Our intent, by contrast, is to classify and name, not to blame or be judgmental one way or the other about el sistema (the Mexican way of alluding to their form of government). So what do call the class made up of sixty-five percent of the Mexican population?

The term la clase marginada could work: they are persons shoved out on the margin of the System, politically, economically and socially. Los marginados are typically not WEMCs: they may be Catholic, but their blend of genes points them in the direction of being non-White and of Amerindian descent. Apart from skin color, los marginados form the forty percent of the Mexican population who are classified as "in poverty," and they also form the additional twenty-five percent of the Mexican population who are in "extreme poverty."

Discrimination in Mexico is not only limited to the los marginados. Go to El Paso. Ask ten Latinos at random how frequently they cross the nearby bridges to visit Ciudad Juarez. "Maybe twice a year" will be a typical answer. Or, "We never go to Juarez, there's nothing of interest there." Chicano activists in El Paso have nothing to do with counterparts in Juarez. For many Hispanics, especially persons of ascendencia mexicana, going to Mexico means being treated like an Agachado by Chilanguenos. The high degree of Mexican American support for the anti-immigrant Proposition 187 in California is evidence enough of deep-seated resentments in U.S. Hispanic communities against Mexico. Once anyone in the U.S. has gained middle-class status, being treated as a second-class citizen is unacceptable.

The subject of the role of the border press in creating a border consciousness, that is, an awareness of common issues and the need for joint problem-solving, is the subject of a study all by itself. I know of only one border newspaper that makes a special effort to reach readers on both sides of the border, namely, El Manana published in Nuevo Laredo, Tamaulipas. The quality of journalism is so good that on one occasion in the 1980s the Laredo city council approached the management of El Manana with the idea that it might buy the local newspaper in Laredo. The city council even volunteered to help arrange financing (El Manana management decided, however, to pass on the opportunity).

At the other end of the border Zeta, published in Tijuana, has made a name for itself and a thriving business as an independent voice in a news world dominated by Mexico City; unlike El Manana, however, Zeta does not target cross-border audiences.

In these ways, distinct border communities have sought cultural isolation from each other, and this is true independently of national borders. They have largely succeeded in remaining distant neighbors.

Expectations of wealth from proximity of Mexico to the United States

The observations under this category may be brief, to leave room for a more detailed critique of transnational and oil issues.

At one of the annual meetings of the Arizona-Sonora Commission (probably in 1989), during a session of the Industry/Trade Committee, I stood up and said, "If 'proximity to the United States' were personified in the person of the international sales manager of my Mexican manufacturing company, I would fire him immediately for inadequate performance." I'm not sure that anyone understood me then, but the message should be clear now.

Another way of making this point would be to paraphrase the famous expression attributed to Porfirio Diaz, President of Mexico for some thirty years until the Revolution unseated him in 1910. The paraphrase would read: "Poor Mexico, so close to the United States, so far from the American market." The simple truth is that Taiwan, Singapore, China, Korea (all third-world economies of sort) each has a bigger market presence in the United States than does Mexico. For Mexico, "cercania a los Estados Unidos" has been a curse for Mexican manufacturers.

For Tijuana, proximity to the U.S. has meant economic benefits from the trinket, drinking and sexual appetites of U.S. sailors and marines. The owners of restaurants and hotels like Cesar's Palace and the Rosarito Beach Hotel have benefited from the upscale budgets of movie stars and middle-class patrons. The same proximity has benefited narcos, bars--I'm thinking of the Blue Fox (in my days in the 1950s)--and managers of prostitution rings.

Mexican border manufacturers of products not meant for the tourist trade, meanwhile, all but do not exist.

Defense and aerospace industry in the U.S. border states

We must also be brief in this category. In the Cold War days prior to 1989, the four border states of Texas, New Mexico, Arizona and California received some 25% of the contractor and salary budgets of the U.S. Department of Defense, worth some $50 billion annually (Baker, 1989).

My argument (Baker 1987, 1989) has been that the maquiladora industry took off in the 1970's owing to the availability of expensive first-world infrastructure (e.g., highways and telecommunications) on the U.S. side as much as it did on supposedly inexpensive (Baker, 1992) labor on the Mexican side. Consider: How many maquiladoras would have opened in Cd. Juarez if the highways to the major American markets in the Midwest and Northeast had been served by dirt roads? A determining factor in the building of this infrastructure since the Second World War was to serve the military and aerospace industries.

Because the military and aerospace industries of Southern California were cloaked in secrecy and rigid procedures of government procurement, there did not spring up--as in Northern California's Silicon Valley--the hundreds of start-up companies that, otherwise, might have served this industry. By and large, these industries fell into the hands of oligopolistic suppliers. check

I remember that for many officers retiring from the Navy, getting a job with Ryan, Convair or Rohr, three military/aerospace giants, was considered the ideal sequel to a military career.

Presumably, the degree of "local integration" (as economists think of it) of the defense/aerospace industry with Southern California suppliers was higher than the 2-5% reported by the maquiladora industry; in any case, they paid well (unlike the maquiladoras) even if they formed an economic island. .c.4. Maquiladora industry as source of wealth for the border region ;

As the negotiation and approval of NAFTA some thirty years later would show, the thinking of Mexico City was that border states and the economy at large would benefit by the presence of transnational companies with assembly or manufacturing plants in Mexico.

First promoted as "twin plants" in the mid-1960s, following the abrogation of the so-called bracero program in 1965, the maquiladoras (also known as "in-bond" plants) were supposed to provide employment opportunities on both sides of the border. In the thirty years of the operation of this program, employment opportunities have been generally limited to low-ceiling jobs that paid enough to afford salchichas perhaps once a week for employees on the Mexican side of the border. Moreover, salaries in the maquiladora industry have been going down, not up, during the period 1980-95 (Gambrill, 1995). Ojo: find article on what do we have to fear from NAFTA?

Is it too much to say that the maquiladora industry has been a massive disappointment to everyone on the Mexican side of the border? Of course, by "everyone" we have to exclude Mexican real estate brokers, industrial park developers, plant managers, lawyers, customs brokers and other facilitators of the movement of in-bond goods.

The persons who are disappointed with the maquiladora industry are plant workers and their families, environmentalists, economists. Mexico publigestionarios (policymakers) are also disappointed by the industry (Baker, 1990), as every attempt to levy a fair tax rate on the industry has been defeated. These populations have seen salaries drop, taxes fall far short of social expenditures, public and private health jeopardized, and air, water and soil resources damaged.

On the U.S. side, persons who are not disappointed with the maquiladoras include scholars (not only at the University of Texas, El Paso) who have been funded directly or indirectly by the maquiladora industry to produce economic reports favorable to the industry. The Free Trade Alliance, sponsored by the maquiladora industry, has successfully lobbied the Congress with the result that only sleepy staff assistants are found there in relation to this subject.

Finally, the hopes for the newly-created NADBank (North American Development Bank), which was supposed to provide funding for environmental infrastructure along the maquiladora border strip, are fading: local governments on the Mexican side do not have the financial resources even to borrow money, much less complete infrastructure projects like the sewage treatment plants in Tijuana or Nuevo Laredo.

Our technical, economic critique of the maquiladora industry can be saved for the next section.

NAFTA as a transnational strategy for economic development

There are four problems with the transnational strategy adopted by the Mexican Government first in the mid-1960s and then, more intensively, in the early 1990s with the negotiation of a Free Trade Agreement (FTA) between Mexico and the United States. We will illustrate these the first of these problems using official trade statistics for Mexico's exports during the period January-April for 1994 and 1995.

This first problem concerns the absence of an adequate accounting method to measure the performance of the Mexican economy in the area of trade, mainly exports. For all analysts of the Mexican economy (e.g., Vazquez Tercero, 1995) the matter of greatest urgency is having real information about the performance of Mexican companies who are not subsidiaries of transnational corporations. There is no statistical reporting on their economic activity at all. Further, there is not even a name in Spanish or English to refer to Mexican companies owned by Mexicans; that is, companies who pay taxes in Mexico on their wholesale profits from exports.

The problem is that economic statistics of the Government of Mexico in the area of exports include two distinct accounting categories whose values cannot be summed: one category concerns exports at wholesale market prices; the second category concerns exports at internal plant prices, also known as transfer prices. Goods are exported from Mexico at both prices, but, clearing customs, there is no annotation of any difference in the basis of their valuation (except that maquiladora exports are separately tracked). There is no economic meaning to the sum of the customs valuations of goods priced at market values with others priced at itnernal plant values. No conclusion whatsoever may be drawn by changes in the sum of these two values.

The market value of total Mexican manufactured exports are captured by an equation

Total value =x + F(y), where

x= market value of exports of Mexican companies

y= internal plant valuation of transnational shipments (maquila an= d non-maquila),

F= parent pricing formula to calulate the market value of Mexico-assembled goods.

The Mexican Government, however, reports Mexican exports only as X + Y. As mentioned, in the category of manufactured exports the Government does disaggregate maquiladora exports from non-maquiladora exports. The problem is much deeper, however, than this simple distinction. What we are after is the economic activity of Mexican (non-transnational) companies, but we know that the "non-maquiladora exports" are loaded with cars, auto parts, computers and chemicals of transnational companies with subsidiaries in Mexico.

Would someone in the Mexican Government kindly tell us what are the exports of purely Mexican companies? We will not wait for an answer from Mexico City, but will try to supply our own answer by reference to the following tables, the development of which at critical points required guessing at key microeconomic ratios. For this analysis let us use the abbreviations NTME, non-transnational manufactured exports (those of Mexican companies), and TME, transnational manufactured exports (those of subsidiaries of transnational companies).