CASE STUDIES/207peasants and small farmers, and served the Interests of the big
domestic and foreign agro-export companies. Furthermore, the state-
owned industrial sector was thoroughly restructured and, for the
most part, also privatised. MNCs have tightened their grip on the
Mexican economy. This neo-liberal shock therapy was designed to
prepare Mexican capitalists to prosper within the new North
American Free Trade Agreement (NAFTA) zone linking the US,
Canada and Mexico.
The wave of privatisations initiated in 1982 by President de la
Madrid has been breathtaking in its scope. Of the 1,550 state-owned
companies that existed in 1982, about 100 remain in state hands.
Privatisation has led to a pronounced concentration of capital in a
few private hands. Currently ten groups control 71.2 per cent of
shares quoted on the Mexico City stock exchange. Privatisation has
enabled capitalists to acquire companies at cut-rate prices, and to
repatriate dollars invested abroad, no questions asked. For foreign
capital, privatisation has been a heaven-sent invitation to buy up
companies in strategic sectors, such as telecommunications. The
funds that have entered Mexico have not created any jobs; indeed,
they have been used to buy up companies that already existed, and
then to 'streamline' them of a number of their employees. When
NAFTA came into effect, Mexico did not come out on top; in fact, the
trade deficit with its neighbours actually increased.
To make matters worse, much of the capital on the stock market
was very volatile. The investors in question were at the ready to sell
off their shares in order to tap into better profit opportunities
elsewhere. Between April and December 19 94, this money took flight
(Toussaint, 1994; in this article, I noted that capital flight had begun
before the August 1994 elections, paving the way for the December
1994 crisis).
By the end of 1995, Mexican capital deposited in US accounts
totalled S24.6 billion - that is, twice the total of the previous year.
Current Mexican president Ernesto Zedillo has the temerity to say
that the SI00 billion that entered the country during the Salinas
presidency were speculative, incorrectly included in calculations of
national revenue: 'Those revenues did not belong to us.' He does not
mention the fact that, in order to attract this speculative capital, the
government auctioned off state-owned companies that did indeed
belong to the nation.