Tax Reform

The government’s own figures tell the story of a rigged tax system, where the rich pay pocket change and leave everyone else to cough up. While large earners paid an effective income tax rate of 1.3 percent in 2020 — even less than the year before — everyone else wound up on the hook for an average rate of 25.4 percent. And while the AMLO administration has made progress in getting corporations to pay back taxes and thus succeed in increasing revenues, the president himself has continued to double down on his refusal to raise taxes, despite longstanding rumors of a fiscal reform to come in the second half of his presidency.

What he has promised instead is an addendum to this year’s budget that closes loopholes and increases enforcement measures. While welcome, this is nowhere near enough. What must be considered is a gamut of measures, including an increase in the top income tax bracket, wealth and estate taxes, and the risible capital-gains rate of 10 percent.

To make these measures even more popular, the proceeds generated can be earmarked for specific policy proposals, like national health care or a massive investment in solar technology (see below). And if the executive refuses to take the initiative, the MORENA majority in Congress should cease being the rubber stamp for the president’s agenda it has been up to now, pass tax reform on its own, and dare him to veto it. Against the backdrop of a 20 percent increase in wealth by Mexico’s top fortunes during the pandemic, the need to take action becomes all the more pressing, lest MORENA conclude its term with the dubious distinction of leaving behind a nation more unequal than the one it inherited.

Mining

Mexico’s mining industry — largely controlled by Canadian and American companies — is sucking up the nation’s mineral wealth at an alarming rate: between 2010 and 2018 alone, five times more gold was extracted than during the entire three hundred years of the colonial period. On top of the theft of mineral wealth, the mercenary nature of Mexican mining breeds environmental degradation, collusion with organized crime, and the intimidation and assassination of activists.

AMLO has frozen the granting of new permits for mining, but with some 300 million acres already licensed out over the last thirty years, extraction will continue apace unless a significant rollback is undertaken. While any attempt to exert further control over the industry — for example, by taking a majority stake in the Mexican subsidiaries that their foreign owners hide behind — will send teams of lawyers crying into the arms of international tribunals and the enforcers of the United States-Mexico-Canada Agreement, it is a battle that cannot be put off.

One concrete step to be taken in the immediate future is the nationalization of Mexico’s recently discovered lithium supply, potentially the largest in the world. With the vultures already circling the territory — the CEO of Canada’s Bacanora Lithium has declared that the lithium deposits in Sonora are a gift that will keep on giving for some three hundred years — this cannot happen soon enough. MORENA in Congress should also move quickly to enshrine AMLO’s fracking ban into law, as the practice has not been fully abandoned.

Banking

Where the mining industry drains the country of its minerals, Mexico’s banking cartel does the same with its money, fleecing its clients through fees, commissions, charges, and eye-popping interest rates, the proceeds from which flow to corporate coffers in London, Madrid, New York, and Toronto (or rather, their respective tax havens).

In the first five months of 2021, banks in Mexico have raked in net profits of some $65 billion pesos (US$3.25 billion) — a 27 percent increase compared to the same period in 2020 — while offering 12.4 percent less in credit. In the short term, MORENA must pass the banking reform bill that died in the last session of Congress without letting either the banking lobby or AMLO’s belief in financial self-regulation water it down or block it. In the medium term, it must fully equip the Bank of Well-Being (El Banco de Bienestar) so that it represents a genuine public option instead of playing patsy to the private system by picking up the clients it chooses to neglect.

Meanwhile, MORENA should be laying the groundwork for a fundamental restructuring of finance and credit in the public interest that breaks the back of the cartel of financial institutions, 80 percent foreign-owned, that has turned banking into a private game of exclusion and enrichment.

Prosecutions

On August 1, Mexico will head back to the polls to vote in a referendum as to whether former presidents and other members of previous administrations should be investigated and, as appropriate, brought to trial for their crimes. This first-ever plebiscite under the nation’s public consultation law is set to pass overwhelmingly, although — in large part due to the foot-dragging and obstruction of the National Electoral Institute, which will be opening barely a third of the precincts in use for the midterms — it is not clear whether it will achieve the participation rate of 40 percent needed to be legally binding.

Whatever the case, the vote should serve as a spur for a governmental prosecution machine that, despite a number of high-profile arrests, has so far moved with frustrating slowness in punishing the corruption of the past. At heart is a tension between AMLO’s stated desire to put a punto final, or “full stop,” to the crimes of his predecessors and a public clamor for perpetrators of crimes of the state, from Acteal to Ayotzinapa, to finally be brought to justice.

To the president’s credit, he made the official request for the referendum to take place and has since been outspoken about the need for former presidents, from Carlos Salinas de Gortari to Enrique Peña Nieto, to face the law. In the face of an international press that reflexively labels any Latin American leader who refuses to toe the Washington Consensus as “authoritarian,” AMLO’s desire to place distance between himself and the process is understandable. But that does not make the process itself any less necessary: in the most practical of senses, failure to dismantle the criminal mafia that brought the country to the brink of ruin will simply allow this mafia to reconstitute itself in a future administration, more seasoned, ruthless, and less willing to lose its grip on power ever again.

Energy and Climate

AMLO’s energy reforms constitute the necessary first steps to clawing back public control over an energy grid that has been deliberately and systematically denuded in order to justify opening the door to corporations and foreign multinationals. Now, the MORENA majority must take the next step.

The Federal Electricity Commission’s strategic plan for the next four years is inadequate to tackle the crisis of climate change: in a country where three hundred–plus days of sun a year is the rule in large regions of the country, a fundamental logic cries out for a massive investment in solar technology. Recent plans to create a public, federally financed solar park in Sonora, a joint solar project between the Electricity Commission and the National Institute for Indigenous Peoples in Santa María del Mar, Oaxaca, and the largest urban solar installation in the world on the roof of the Central de Abasto market in Mexico City represent promising steps forward, but they must be scaled up and combined with a reform of the much-abused autoabasto, or “self-supply,” provision of the law in order to allow individuals and collectives to feed clean energy into the grid.

State and Local Governance

Most people’s first and most lasting contact with government comes at the state and local level, and with MORENA now governing half of Mexico’s states and a large chunk of its municipalities, it is an area it needs to master. This begins with attending to basic infrastructure needs that have been neglected thanks to decades of indifference and corruption.

Millions of Mexicans cannot drink water from their taps, have no access to parks or green spaces, do not separate their garbage for lack of recycling programs, breathe the foul emissions belched by trucks and buses, and must walk daily by waterways that are little more than open sewers. Renters suffer from unregulated rental markets and, in many cities, from forces of gentrification that push them farther and farther out to the periphery.

In state prisons across the country, moreover, thousands upon thousands of impoverished prisoners languish in pretrial detention for months and sometimes years in a modern-day version of debtors’ prison. In addition to reforming and expediting an often inhumane justice process, MORENA legislatures have an excellent opportunity to enact a penal reform in order to release those incarcerated for having or performing abortions, political prisoners, nonviolent drug offenders, and members of Indigenous nations who were refused the right to a trial in their own language. As most crimes are classified and punished at the state level, this would have a much greater practical effect than the federal amnesty law enacted in 2020.

Health Care

With AMLO’s plan to provide national health care to all Mexicans temporarily derailed by the pandemic, the next Congress would be an ideal time to bring this life-and-death issue back to the fore.

The administration has taken some important steps in the meanwhile, completing the construction of hospitals left abandoned by previous governments, eliminating fees in federal hospitals, and arranging — despite the opposition of multinationals like Bayer and a savage counter-campaign at home — to purchase medications from the UN in order to break up the cornering of the national market by a handful of unscrupulous distributors.

But no national plan will ever fully work without addressing the elephant in the room: the fragmented nature of Mexican health care, whereby private-sector workers in the formal economy are treated in one system (IMSS), public-sector workers in another (ISSSTE), and everyone else — in theory — in a far-inferior third system (INSABI). The MORENA Congress should take advantage of the expansion of hospital capacity fostered by the pandemic and the success of the national vaccination campaign to do what no one else has dared: unify the nation’s health care into a single, universal system that covers everyone equally.

Women’s Rights

In 2020, the Chamber of Deputies approved a bill to establish the constitutional right to dignified care, based on the co-responsibility of men and women, to be guaranteed by the state by means of the National Care System. The goal is to address the yawning inequality experienced by women in Mexico, who perform the vast majority of the most precarious jobs while also having to shoulder the care of children, the elderly, and the disabled.

So far, so good. But another article of the proposed legislation stipulates that no new entity or financial commitment be created, as “existing institutions must be taken advantage of.” In the new Congress, MORENA must go beyond these kinds of symbolic gestures and fully fund efforts to equalize and socialize care. It must also move to address the nation’s plague of femicides by providing legal protection and safe spaces for at-risk women, such as the Puerta Violeta, or “Purple Door” refuges, centers of multidisciplinary assistance for women and their families. The government has been widely criticized for an initial cutoff of funds to refuges as part of an overall drive to no longer subsidize private organizations. Its desire to take these services in-house is the right one, but it must follow through not only with maintaining the existing network but expanding it. At the same time, the new Congress should follow the example of MORENA legislatures in the states of Oaxaca and Hidalgo and legalize abortion at the federal level. This will mean going up against the Catholic Church and the nation’s burgeoning evangelical movement, but the recent legalization in Argentina has made the task easier for Mexico by showing how a progressive government can take on this historically taboo issue successfully.

Indigenous Rights

Mexico has a long way to go to address its historic debt with its Indigenous peoples. Whereas Bolivia, for example, enshrined Indigenous rights and autonomy in its 2009 constitution that recognized its plurinational character, Mexico has yet to ratify the San Andrés Accords, negotiated following the Zapatista uprising a full quarter century ago, in 1996. Ratifying the accords was a part of AMLO’s platform in each of his three runs for president, and must occur without further delay.

On a daily basis, Indigenous communities are on the front lines against the environmental depredations of mining companies and private water interests; a proper approach to Indigenous policy, then, begins with basic ecological stewardship. This means restoring water rights to the Yaqui tribe in Sonora, who have faced contamination of, and lack of access to, their own river. It means resolving the conflict that has kept the Mixe communities of San Pedro and San Pablo Ayutla without access to their local spring for four years due to threats of an armed group. It means resolving land disputes such as the ones that have led to the displacement of thousands of Tzotziles in the highland pueblos of Chiapas. It means halting the sell-off of communal lands — made possible by the constitutional counter-reforms of Salinas de Gortari — and writing AMLO’s executive order banning genetically modified corn and the toxic chemical glyphosate into law. But none of this will be enough without realizing that Mexico, too, is a plurinational state whose Indigenous nations have the right to autonomy, self-government, cultural expression, and full access to justice in their own languages.

Security

Instead of betting all of its chips on the army while militarizing police functions through the National Guard, the MORENA majority in the new Congress should rethink its approach to the stubborn, drug-related violence it has not managed to bring down over the first three years.

As a first step, it must finally pass its long-delayed marijuana legalization law which, caught between competing versions in the Chamber of Deputies and the Senate, died at the end of the last session (the recreational use of marijuana has been approved separately by the Supreme Court). But it must look beyond this to a much wider decriminalization along the lines of the Portugal model. However unlikely this may appear in the context of a US-fueled “War on Drugs” that has devastated the social fabric of country after country in Latin America, it has its historical precedent in Mexico.

In 1940, the government of Lázaro Cárdenas — visionary in this as in other matters — passed legislation decriminalizing all drugs, creating a network of treatment clinics and public dispensaries for addicts to purchase controlled doses, and releasing previous offenders from prison. Under pressure from the United States, the short-lived experiment was rolled back, but should be resurrected today with renewed vigor. Mexico has sacrificed far too many lives fighting the suicidal battles imposed on it by its northern neighbor; it’s time for it to go its own way.

In light of midterm losses by MORENA in some of the more affluent sections of Mexico City, a number of commentators have begun to intone the old siren song about losing the middle class. Leaving aside the fact that the party won states like Sonora, Sinaloa, and Baja California, which concentrate a large percentage of the middle-class voters outside of the capital, it is important to recognize that there is no such thing as a homogenous middle class. Certain sectors — such as young urban progressives turned off by the party’s lack of progress on social issues — can be won back. The recent legalization of same-sex marriage in two MORENA-governed states, as well as the legalization of abortion in another, are promising signs in this regard.

Other parts of the middle class will not be brought into the fold, even if MORENA legislators were to stand on their heads. Instead of chasing disaffected voters in the handsomely furnished high-rises of Lomas and Polanco, MORENA must recall that it came to office promising a historic transformation, not a tinkering around the edges. It is a transformation that the public is hungry for, and which will turn out voters en masse in 2024. MORENA has been returned to office to deliver, and deliver it must.