206/YOUR MONEY OR YOUR LIFE!
to ensure ongoing debt-service payments in exchange for a marginal
decrease and rescheduling of the debt load.
In 1982, Mexico's total foreign debt was S95 billion. During the
following six years, Mexico paid out S102 billion in interest
payments and principal repayment. The Mexican debt nevertheless
increased to $112 billion by 1988 (George, 1992). Between 1988
and 1994, Mexico paid $125 billion in debt-service repayments -
funds drawn in part from privatisation receipts. Yet, for all that,
Mexican debt did not decrease. On the contrary, foreign debt was
$130billionin 1994. Current president Ernesto Zedillo has promised
to repay the 'aid' provided in 1994-9 5 - primarily by the US (but also
by the Bank for International Settlements and the IMF) - to rescue
financial markets. With this in mind, Faprode (an independent
research institute) estimated in late 19 9 5 that Mexican debt totalled
more than $180 billion (the OECD calculates that it totalled $134.4
billion in late 1995).
For Mexico, as for other Third World countries, foreign debt
repayment involves a huge transfer of revenue from small and
medium-sized producers to capitalists holding foreign debt paper.
Among these capitalists, one finds Mexican capitalists who hold some
of this foreign debt paper, purchased with capital they shifted onto
foreign financial markets. In addition to this transfer of wealth, since
the December 1994 crisis a part of Mexican oil revenues has been
channelled through a US account which US officials can freeze if ever
debt-service payments are not met. This is a blatant symbol of
Mexico's renewed submission to the US. At the beginning of 199 7, in
an attempt to escape this humiliating predicament, the Mexican
authorities made an early payment of $10 billion to the US Federal
Reserve.
Privatisation and Heightened Dependence on the US
President Carlos Salinas de Gortari used his six years in power (late
1988 until late 1994) to extend the neo-liberal policies initiated by
his predecessor Miguel de la Madrid in 1982. Under Salinas, the
banking sector was privatised, with large segments falling into the
hands of US capital; and an agrarian counter-reform was enacted
through amendments to Article 27 of the Constitution, which
granted 50 per cent of arable land to peasants and small farmers.
This counter-reform reduced the collective property accessible to