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575 April 14,1987 MEXICO: THE KEY PLAYERS Paul R Wisgerhof Senior Fellow INTRODUCTION Mexico's last revolution spanned exactl ten years, from November 1910 to the presidential election of November 1920. hat revolution closed Mexico's first century of mdependence and opened the door to the blossoming of a new nation, based on a nomnally democratlc constitutional system and or anized around a "triad" consisting of a labor movement. Because Mexico has always been a land "governed sometimes by strong men, sometimes by strong institutions, and sometimes by outsiders, it has no histo of participatory democracy on the U.S. or Eur o pean model. Nevertheless, today's Zxico while still run from Mexico City, is not a tradtional dictatorship. The "triad components remain the key layers in Mexico and act as a system of checks and balances, not, perhaps as effective as ti at mandated by th e U.S. Constitution, but with each element exercising a moderating role on the functioning of the others.

Although legally a multi arty nation, Mexico is effectively controlled by the Inshtutional Revolutionary Party (the Pk, in the initials for its Spanis h name, Partido Revolucionario Institucional All elected and ap ointed national government officers, all state governors government always have the concurrence of the Party, and the Party's decisions usually, but not always, have the government's concurre n ce. The constitution organizes the national government along lines very similar to those of the United States; For example, there we one-party government, a business/financial/agricu f tural coalition, and a well-organized most mayors, and the majority o P deputies and senators,belong to PRI. Decisions by the This is the second in a series of Heritage studies on Mexico. It was preceded by kkgrounder NO. 573 Keys to Understanding Mexico: Challenges for the Ruling PRI April 7,1987 Future papers will examne o t her Mexican political parties as well as the nation's economic and foreign policies. executive, legislative, and judicial branches with nominal checks and balance on each another. The executive, however, is clearly su reme in the Mexican system, and for e c onomic and olitical reasons, the checks an B balances are,much less effective than is the case in the u.B Cartels and Agribusiness. The business leg of the triad has three significant e1ements:the commercial/industrial interests, the financial sector, and the agribusiness groups. The commercial and industrial sectors tend to form cartels, which are dominated by a single sprang from major landholders and from the rapidly e andmg and rotecte rpings industrial family or small poup of families and centered in a major ciq. The financial importance The "maquiladora" system along the northern border, whereby U.S. and other countries' firms establish plants to assemble or finish manufactured parts made in the U.S or elsewhere and reexport them, has flourished since the early 1970s. U.S. firms participating in this system et low- riced labor and pay U.S. duties only on the value Foreign investment in Mexico is limited. Foreigners, generally, cannot own more than 49 percent of a Mexican operation. Some exceptions exis t , and others could be granted if the government of Mexico decided to do so. Foreigners also face geographical restrictions on where they may invest, especially in real estate sector. Agribusiness has flourished, articularly in the TI orth and in 5 aja Cal i fornia, but it has been subjected to a series of lan B reform measures, reducing its economic and political added to their product in dm emco. H ome 700 maquiladora currently are in operation The most important labor union in Mexico is the Confederation o f Mexican Workers de Trabajadores Mexicanos-CXM The union, while not founded by the p in every presidential election since that of Lazar0 Cardenas in over 11 affiliated unions and workers organizations, and its leader teac K ers, a majority of private scho o l teachers, and about half of the university professors will alwa s have an important voice in the government's daily operation. Four other large labor fe B erations, which include public workers, easants, and others in their ranks, are affiliated with th e CM through the Mexican La or Congress. Significant independent unions include the Oil Workers Union, which controls the employees of the national oil com any, PEMEX, and the Teachers Union, which is composed of all public school and instructors.

Only pro fessors and teachers at private universities are likely not to belong to the union THE GOVERNMENT The Party" and the Government The PRI in many wa is the government of Mexico. The President has very nearly not overstep the Party's perception of the bounds of expedien and propriety. On the absolute authority to te ir the government what to do, so long as the President's wishes do other hand, the President is consulted by the Party in making 7 ecisions on whom to 2nominate for governorshi s, judseships, and other major appointive positions, although not tantamount to election in any race in the nation, given the PFU's control of the elective process, it quickly becomes evident that the Party really is the government.

The Party's Central Executive Committee an d subordinate secretaries wield extensive patronage powers. They can see to the a pointrnent of almost anyone in office; likewise against the reelection or reappointment of officeholders, those who wish to remain in the apparatus in the next admhstration t end to go along with the Party's desires. On the more work together to assure that the Party's oals and objectives are met. It is assumed b one executive branches are closely attuned to the Party's wishes Role of the President on most of the lower-leve P a ppolntive and elective positions. Since nomination can be they can seek the removal of those who B o not perform. Since the Constitution mandates and all that the Party's desires are good f or the nation. Thus, both the legislative an (r the senior levels , an "old boy" network and each politician's obsequious group of hangers-on While the Mexican government is organized on a basis very similar to that of the United States, it would be unwse to draw fine comparisons The Umted States of Mexico (the nation's o fficial title) are in reality ruled from Mexico City by the President. The legislative branch consults with him on most legislation, and the President's views are usually acce ted to the President. The PRI's candidates for state governors are selected b t he President naming new Justices. The President sets domestic and forei Mexico's large bureaucracy.

The President serves one six-year term. He cannot succeed himself nor can be be reelected subsequently. There is no Vice-president. Should the President die or be incapacitated during the first half of his term, a new election would be called. Should the r oblem occur during the second half of his term, the Chamber of Deputies (the lower gouse of the Congress) would appoint an interim President to complete the term. There would also be an mterim president to fill the gap between the president's demise and t h e election of a successor, since Mexican law says there must always be a President for the nation to function by the ruling Party. The cabinet is, of course, appointed by him and is directly responsi f le The Supreme Court, which appoints its own members, consults with the x esident before direction of financial and economic policies and is responsib $F e or the performance of olicy, determines the However, while the President appears to be absolute and omnipotent--he is not. The President has to balance t he corn eting interests of labor, the entrenched politicos, the Church, Army, business, and the kft.

The Cabinet The Cabinet Secretaries consult with the President anywhere from hour1 to once a month, depending on the importance of the individual Secretary 's work to t i e formulation 3of policy and whether or not there is a crisis in his or her bailiwick. The principal eters exercise real influence on both the President and the nation, especially in the economic and foreign relations spheres.

The Secretari ates are im ortant for two reasons: 1) they are the home bases of the receding cabinet. The constitution does not re uire such experience, but the PRI has senior arty bureaucrats an B technocrats who run the nation; and, 2) since Plutarco Calles in 192 B n o one has been elected President of Mexico who was not a member of the F ound it a useful test of a man's technical and PO E 'tical ability In addition to the President, 21 men sit on the cabinet. Nineteen of them run Federal Ministries (called Secretaria t es) and two are responsible for the Federal District (its chief executive officer and attorney general of the cabinet positions is the Secretary of Government other European and Latin American nations this is called the This Secretan 'ate controls all of t he vital domestic functions of The Secretary of Programming and Budget sets the government's spending priorities and allocates resources. This office controls who gets to purchase what and which requests for the next year's budFet are heard. The direct im pact of this office on the public is not as great as Gobe rnaa 'on s, but for the bureaucracy, this office has do or die authority.

Next in line of im ortance comes the Secretary of Commerce and Industrial Development This fecret ariat e controls the busin ess and commercial development pro ams of the nation. It also grants, reviews, and ma reject license applications by all the government on some issue, whether or not it was related to business, the industry could find itself in serious difficulty with the government just in terms of being allowed to riate also decides on where the overnment will invest its continue in business. This Secreta limited resources in industrial development, expansion of steel an other primary industries the f usinesses and indus t ries of the nation. Thus, shou r d a major industry decide to oppose cf Fourth in importance is the Secretary of Finance and Public Credit This Secretariate fills many of the same functions as the U.S. Department of the Treasury does, controlling the nati o n's money supply, supervising the banks, and controlling the government's access to foreign and domesac credit. This is where decisions are made regarding expansion or contraction of the money supply, public borrowing, and the operation of the banking sys tem. Together with the Secretaries of Government, Commerce and Industrial 4Development, and Programming and Budget, Finance and Public Credit is responsible for the execution of the annual budget.

Fifth in importance, because it has little impact on the do mestic scene, is the Secreta of Foreign Relations Foreign Relations fills a role anal0 ous to the U.S. Department o State, but has little or no say in the field of immigration. he Secretan ate is also the governments spokesman to foreign media. The Secret a ry of Forei closely with the President in formulating Mexicos foreign policy to the Left over the past 30 years, and it should be expected to continue to do so. Mexico is the only nation in the Organization of American States that did not break relations with Castros Cuba in 1962; it continues to maintain warm and cordial relations with Cuba to this day. Likewise, its relations with Sandinista Nicaragua are excellent.

Mexico prides itself on being open to the leftists who seek or have sought to overthrow t heir governments. Mexico City remains a hospitable refuge for the headquarters of emlla movements operating in El Salvador and Guatemala, just as it was to the !r andinistas prior to Somozas overthrow. It is also the home base of the largest Soviet East b loc, and Cuban embassies and intelligence operations in the hemisphere.

The Attorney General controls the courts and is the nations lawyer but does not control either the police apparatus or the prison system. The Comptroller General checks on the other Se cretan ates compliance wth their budget obligations and works with the Secretary of Finance to monitor the operation of the nations banks. Neither is as powerful as is the similar body in the U.S. system.

Navy controls that oreanization. There is little coordination r; etween them in up olding the govemments deslre to avoid a strong military. The Air Force operates under the aegis of the Secretary of National Defense.

The Secretary of Agricultural Reform and the Secretary of Agriculture and Hydraulic Reso urces control the nations agriculture. Their decisions on agriculture, land reform, irrigation, and related issues directly affect the lives of some 30 million Mexicans still on the land. In terms of food production, they obviously are even more important to the daily life of the entire nation 7 Relations works is has moved steadily Of the The Secretary of National Defense is the head of the Arm while the Secret The remaining Secreta riates include: Communications and Transport, which handles highways port s , airports, and all communications, includin the post office; Education Industries, which handles electrici mining, petroleum, and all state-owned industries Public Assistance, which provides health care at low or no cost to the poor and manages public he a lth and sanitation; Labor and Social Welfare, which takes care of the usual labor concerns and social security; Tourism, which promotes tourism to Mexico and licenses forei which covers all levels, except private universities; Energy, I4 ines, and Parasta t al Fisheries, which concerns itself wi x offshore operations and fish farming; Health and and f? cology, who has a hopeless task hotel operations and resorts in Mexico; and the Secretary of Urban Development 5The Legislature The le 'slature is bicameral. T he Senate consists of 64 seats, two for each of the 31 with the President's. Senators may not succeed themselves, but they can be reelecte after sitting out one term. Senators are usually nominated to their office by the PRI as a reward for ood service in other jobs; it is not a steppingstone :to higher office. Since 1929, the PRI The Chamber of Deputies consists of 400 seats. 300 members are elected directly from congressional districts based on population. The remaining 100 seats are reserved for minorit y parties, and the members are elected by the des at large. Deputies serve for sitting out one round de PRI appoints its candidates as a reward or good work at lower levels, and uses the Chamber as a training ground for future jobs within both the Party an d the government.

The legislature does not really legislate. It accepts suggestions for new laws from the executive, that is, from the Office of the President and from cabinet ministers. Legislative changes in the laws as received from the executive branch are usually cosmetic, not substantive As might be expected, although the President can veto a law, it virtually never happens, since the exedutive proposes almost all legislation. All proposed legislation is discussed in the appropriate committee there i s one committee in each house for each be offered, but they normally deal only with the language, not with the substance of the law being proposed No Power of the Purse. Much of the legislation only implements decrees already promulgated by the President, w hich have the power of law until superseded by congressional action. Because of the President's ability to rule by decree, the Conpess does not really have the power of the purse. The Con ess sits for one official session each another two-month term somet i me between February and June, but this is not required by the Constitution. When Congress is not in session, a group of 30 members from each house sits as a "Grand Commission" to cany out such tasks as the Congress may need to complete, the most important of which is the confirmation of presidential appointments.

The 100 members elected from the minority parties participate on the various committees, but their real role is to protest those actions taken by the PRI that the minority parties perceive to be a gainst the best interests of the nation. They obviously do not have the votes to overturn a government or Party decision, but their statements in Congress are occasionally, reported in their hometown papers. They seldom get national coverage 8 states an C P two for the Federal District., Senators are elected for six-year terms, co-e ual has ost only one senatonal election, Oaxaca in 1976 three years, and they ma not succeed themselves, alt K ough they ma be reelected after 7 ministry) and forwarded to the f u ll cham 6 er for discussion and passage. Amendments may year from September 1st to December 30th. It is usu 8 y recalled by the President for on the other hand, rarely complain, in public, about legislation Since no one is reelected anyway, complaintants w ould be liable careers impaired if not abruptly terminated. It also should be noted little access to the Congress, and there is little reporting on the debates within either house The Judiciary The court system is strongly influenced b the PRI. Since 1929 all members of the courts are non-PFU members. This close association with PI& coupled with low ay, has corruption at the Distnct and Appeals levels are common, less so with the Su reme Court commonl thought to be the deciding elements of justxe in Mexico . This has resulted in a certamty that the accused in a criminal action is guilty as charged unless he can prove otherwise Supreme Court have been members of the d arty. Few, if an ,justices to the lower federal played a major role in generating a lack of e steem for the judiciary in Mexico. C K qrges of Political considerations in criminal cases and monetary considerations in ci VIP cases are widely he T d conviction that the courts should be avoided in settling civil disputes, and a I The udiciary does exe rcise one effective form of restraint on the executive branch.

Feder judges may issue a writ of restraint (am aro) on behalf of an citizen who claims that his constitutional rights have been violated y the government. e effect of the writ is to stop furthe r government action in the specific case until the federal Supreme Court has heard the case. The writ can be issued in any case involving federal junsdiction, and may be issued against any federal officer or institution. It may not, however, be used in ca ses involving political disputes.

While the Supreme Court can declare a law unconstitutional, it is far more likely to declare a law constitutional on an ex post facto basis. This was done in 1983 following the 1982 nationalization of the rivate banking sy stem, but it would appear that the Supreme h a Court has never declared a P aw unconstitutional Supreme Court. The Mexican judiciary is strongly controlled at the federal level. The senior court is the Mexican Supreme Court, composed of a Chief Justice an d 25 Associate Justices. The Supreme Court justices are a pointed by the President on recommendation anytime after reaching age 60 if the have served ten years on the bench. Below the who may have tenure granted by the resident until age

65. There is a Federal istrict the federal court of first instance.

The federal court system handles all important civil litigation, leaving only divorce actions and small civil disputes to the states. All major felonies except murder are also federal res ponsibility of the other members of the court to an in B efinite term. Justices must retire at age 65, or Su reme Court is a Federal Appe 9 s Court. There is one appeals court in each of six ju cr icial districts covering the nation. Each court has ten me m bers serving four- ear terms Court in each state and the Federal 8 istrict, consisting of from four to 30 justices. 'This is b 7State and hal Government State and local activities are much less important in Mexico than they are in funding for state and lo c al operations comes from the governors are effectively ap ointed by the President (the PRI has never allowed another party to elect a governor w hlP e the mayoralty elections in large cities also are usually won by the PRI THE POLITICAL PARTIES There are t hree major Mexican olitical factions: the PRI and its associates; PAN and like-minded organizabons; and the L ft. As Mexico prepares for the 1988 presidential elections, the parties shape up as follows 0 0 Institutional Revolutionary Party, Partido Re vol ucionario Institucional (PRI) was founded in 1929 by Plutarco Calles, President of Mexico from 1924 to 19

28. The Party formalized a coalition of similar organizations and was originally called the National Revolutionary Party (PNR The PNR was organized ar ound four oups: the military, the bureaucrats, the agricultural sector, and orgamzed labor. In 1943 t e military grou was dissolved as a formal sector of the Party and the Party's name was changed to the P Popular Organizations (CNOP composed of bureaucra t s, housewives, professicnals merchants, and others of middle-class background; b) the National Federation of Peasants-Farmers (CNC), made up of farmers, agribusinesses, and associated industries and c) the Mexican Labor Con ess (CMT). The three oups o era t e through the Party Party president, the PRPs secretary general, secretaries for agricultural, social, labor, and popular action, two secretaries for political action (one a deputy, one a senator a secretary for finance, and one for media/public relations .

The Party publishes a monthly magazine, La Republica, which is circulated to Party committees and agencies at all levels. There is also the semi-monthly Proveca 'on Politica Political Projection) that is sent to all P leaders. The PRI and the Government jointly own the Mexlco City daily news aper, El L ci nal It has nationwide, free circulation, but pu The Party is also a triad, the three majdr actors being: a) the National Federation of executive, called the National l% ecutive Committee (C fRr N CE 's m embers include the it is neither widely read nor we 1y regarded, especially by other newspapers and journalists su The port pT oft e right to strike by all workers, including those in government, except for the The arty's foreign PO P icy calls for indepe n dence from the United States, the Soviet Union has an active membership of over three million. The PRI's policies include dtary. It promotes a minimum wage for all trades and labor, social security, basic health care for the poor, public housing for worke r s, communal or individual farms for peasants and rofit sharing for rivate sector workers. It insists on "no reelection to public office 8and Europe. It favors close cooperation with the Or anization of American States in order Nicaragua an opposes the "co n tras to romote Latin American re onal interests. The arty usually favors and supports le R -of-center overnments in &in America. It supports the Sandinista regime m d Popular Socialist Party. Farther to the Left than the PRI, but closely associated with i t and suporting PRI's residential candidates, is the Popular Socialist PT Partido Popular o-(PPSf It was founded by a former member of Mexico's ommunist Party in 19

47. The party has a national executive committee. It ublishes a monthly ma azine called Dem 'a and a weekly newspaper called El Eombatiente (The Figher PPS claims 400,000 adherents, centered in the states of Oaxaca and Nayarit and in the Federal District. The party's platform calls for the nationalization of all industries and business, but it s uggests that this will create a socialist, not communist economy Its foreign policies support Marxist and leftist governments. It claims financial support from the Socialist International. It would not be surprising if it also received contributions from M oscow and other communist governments as well Authentic Party of the Mexican Revolution. Occupyin the position to the right of the PRI spectrum is the Authentic P of the Mexican Rev0 f ution, Partido Autentico de la Revolucion Mexicana (PARM). P 2 M was f o unded in 1954 by a retired army general farmers P n return for government subsidies, PARM supports the PRI candidate for It claims support from some 300,000 middle-class, middle-aged farmers and workers. Its centers of strength are reportedly in the State s of Nuevo Leon (Monterrey Jalisco Guadala'ara and Tamaulipas, plus Mexico City. The party, which is very loosely organized, supports a moderate approach to.the ongoing revolution along with protection of private roperty and welfare programs. PARM also see k s additional aid for small president National Action Party. The loyal opposition from the middle and right is led by the National Action Party, Partido Aca 'on Naaonal (PAN). PAN is a conservative party founded in 1939 on a platform of Catholic social pri naples. It has roots going back to the National Catholic Party of 19

11. The arty president and secretary general lead the National Executive Committee. The e ommittee has secretaries for political action recruitment, finance, campaigning, and public relat ions. The PAN nominates its candidates for office, including the residency, at an open convention, on both the national presidential elections since 1958, except in 1976 when the party could not get the needed 80 percent agreement on a candidate.

PAN ubli shes a monthly magazine, La Naa 'on. Two daily newspapers, El Herald0 ip Mexico ity and El Norte in Monterrey, support the p but are not owned by it. The PAN has at least 750,000 active, dues-paying members. t is strongly represented in the North Baja Cal i fornia, Sonora, Chihuahua, Durango, Sinaloa, and Nuevo Leon). The party Ei so has done well in municipal elections in Jalisco, Yucatan, and the Mexlco' City region and state level, depending on the o k ce. Presidential candidates have been offered in all r e 9PAN'S domestic policies call for effective suffrage by stopping fraudulent elections, less olicy the party is staunchly government investment in the industrial and commercial sectors of the economy, and multiparty formulation of policy in the governme n t. In forei anti-communist. It favors a good working relationship with fipb e .S. but never at the expense of domestic considerations. Though not associated with an of the Christian including the papal encyclicals calling for mcreased social justice Mexic a n Democrat Party. More radical than the PAN, and informally associated with it is the Mexican Democrat Party, Partido Democrata Mexican0 (PDM). PDM was founded in 1971 PFU's anti-church stance. The party has perha s 200,000 members, most of them committee and 23 regional committees. Each committee includes secretaries for finance membership cam aigns, and public relations. The party publishes a monthly magazine democratic parties of Europe, the PAN apees with most Catholic i K eas on social reforms Sinarau im UN 2 a neefascist, very Catholic group founded in 1937 to redress the church-oriented, middle-class urbanites. The 8 DM is run through a national executive.

Democrata whic K is distributed to all members the leaders of the Sinarquista National Union, Un ion Nacional PDMs domestic policies favor "a union of church and state call for the divestment of government-owned industries and commercial ventures, a reduction in welfare programs and the end of PRI domination of the government. The party's foreign pol i cy favors open alliances with anti-communist nations. The arty is unlike1 to be a major player in The Unified Socialist Party o Mexico, Partigo SO~ ialista U nificado de Mexico (PSUM was founded in 1981 through the unification of four small arties of the f ar Left with the communist principles. The PCM was a Moscow line party for its entire existence; PSUM follows in this tradition. The Mexican Workers Party (PMT) was also offered an opportunity to join PSUM in 1981, but declined. The offer is still open Me xican politics since most Catholic lay lea B ers favor the d AN Mexican Communist Party (PCM). PCM was founded in P 919, based on orthodox Unified Socialist Pa The make-u of the Left is, in some ways, more interesting.

The PSUM claims a membership of 120,0

00. It is an interesting amalgam of communist views, countin among its leadershp individuals who have espoused causes ranging from expropriation of all privately owned businesses, industries, and services under a Manost-Leninist government. The pq would own all media and control all-education.

Forei The.party's youth grou controls the Student Federation at t e National Autonomous University of Mexlco, ge nation's largest university Cambodia to I 1 Salvador to Albania. The party's domestic policy hs calls for the Rev0 P uttonary Front (FDR) in E I Salvador. It is, of course, ro-Sandinista in Nicaragua.

Nueva It is supported editorially by 9 0 percent of the nation's newspapers policy is anti-U.S. and resowet. PSUM supports Cuba, and the Democratic K The p arty publishes a monthly ma azine, El Machete and a semi-monthly paper, Vida 10 Socialist Workers Party. The founded in 19

73. Among the lO0,OOO members. The bulk of Zapotec, and Tarascan Indians. The remainder lower classes PST, much as PSUM, has a domes tic poli calling for nationalization of all means of production and commerce, arty control of sc Yl 001s and media, and general government control of society. It would K ave committees of workers o erate all mdustries. The E municipal governments would co ntrol and operate all pub 'c utilities In addition to these, mofe or less, major arties there exists a lethora of minor actors none of them commands a significant following.

These other groups cover the entire politi cap spectrum from the P ar Right to far Left, but Mexican politics are influenced by three other important institutions: the Army,'the Church, and organized labor The Army was much more important 50 years ago tha n today; it has been co-opted. and corrupted so thorou ly that it no longer poses a threat to state religion in 1857; while it has faithful adherents who would like to reestablish that role such an event is highly unlikely. Organized labor is an integral p a rt of the PRI system; it will co-opt, corrupt, or clobber an upstart new labor group that wanders too far away from the system. The Church was legislated out of its tra e itional Latin American role as the the "revolutionw ideas of the P lL THEARMY Unlike virtually every other Lath American nation, Mexico has not had a successful military revolution since 19

20. The last significant attempt by the Army to influence the government was in 1940.

The Arm was depoliticized in the mid-1920s by President Plutarc o Calles, and his methods an J ideas were followed by Presidents Lazar0 Cardenas and Manuel Avila placed control of food an fuel for each district in the hands of civilians. x e Army had to fun& for the military was gradually reduce B until it constitute f less than 2 percent of were greater (and st llr are) in the regular army Camacho. These men be an simply: they divided the nation into 33 milit ask the government any time it wanted to move or eat. Zone commanders were rotated eve few years so that they could not build a ower base in any 'ven zone. Finally GNP. his discouraged the purchase of new equipment, and training was significantly cut.

Since budget stringencies made it difficult to pay officers a reasonable salary, the government encouraged corruption.

A Presidential Military Staff was created for two purposes: to create tension between the staff and the regular Army office corps, and to

ve the staff increased op ortunities for influence peddling. However, promotion opportumties districts and 11. - Lacking Aristocratic Tradition. A third element pla ed a major role in subduing the Mexican military. Virtually allaf the troops are drawn om the very oorest elements of society, and the officers come from the lower middle class. Thus, the exican milita r y does not have the aristocratic tradition that is a commonplace in other Latin nations In turn, the officers receive a good education at both military and private universities, while the soldier is well fed, clothed, and housed if Domestically, the Army i s an integral part of the security system. Its 140,000 officers and men guard the borders, support the olice, and provide security.for the President It is very anti-communist, and quite xenopho ic. The General Staff beheves the only possible significant e x ternal threat 1s the Unitded States. It is deeply concerned with the possibilities of increase domestic violence and errilla amvity Bearing this in mind, the equipment. On the whole, however, the military seems content with its lot, comfortable in the how l ed e that, so long as the believe in the tem, the system will allow them to military convinced President Jose Lopez Porti lr o in 1977 to provide them some new continue wi t% a relatively safe, so i and undeman r ing existence THECHURCH Another of the mor e interesting balancing acts that the system arran es is between player in the Mexican system. All subsequent administrations have seen the wisdom of that decision. The last important attempt to change the rules occurred in the mid-1930s with the rise of t he ultra-Catholic "Christero" movement around Guadalajara. With some 90 percent of the nation baptized as Catholics, the Church must be accommodated, co-opted and guided into an acceptable role without arousing the ire of the populace.

The Church is a stro ng influence on the daily life of many Mexicans. However, while the Church opposed the "socialized education reforms of the Cardenas administration in the late 1930s, it has learned to live with, and in many cases work with, the government's health and so cial welfare programs. Some 10,000 pnests work in 53 dioceses in Mexico.

They wear mostly civilian clothes outside the church, but are visible nonetheless Church and the state. The 1857 constitution effectively destroyed the C urch as a political The Churc h has a varie of action-oriented groups including 0 us Dei, Catholic tacitly, the PAN and PDM.

Action, the Christian Fami r y Movement, and the National Parents pr don. It supports The government and the bureaucrats blow hot and cold on the subject of Chu rch/State relations. On the one hand, the support the good works of the Church and readily the slums of the big cities. The state, however, also is concerned about a small number of priests who preach liberation theology or otherwise spread unrest and dis c ontent in the countryside. Again, so long as both sides understand the system and continue to play by its rules, there is little cause for concern by either group acknowledge the fact that the C i urch and the priests work effectively to restrain unrest i n ORGANIZED LABOR To the extent that the PRI is the government, the Pa is, to a very large extent organized labor. The modern labor movement began in exico in the early 1930s 12Originally set up by a variety of anarchist, socialist, and communist organizat i ons, Mexico's first union efforts were not entirely successful. There were two reasons first, the government was not in control of the organizations, thus undercutting Party authority, and second, the PRI had not yet decided on what role organized labor s h ould play either in the Party or in the government The CI'M 5.L In 1938, with the expro riation of the foreign oil companies and World War II looming qw Mexico decided that it ha B to exercise effective control over the labor unions. Vincente and the d RI , Lombardo Toledano was ousted and vp elasquez instal P ed as the undisputed within CTM. hl ile these officers of the union will use their union loyalists to quiet dissent e erne of the rank and file. The level o P corruption is sai d to range from kick-ba cks on Lombardo Toledano and Fidel Velas uez emerged as the kin

ns of the nascent Confederation of Mexican Workers onfedera cion de Trabaiado res Mexlcanos Followin a dispute on union leadership and the pro er relationshi between the won leader of CI'M. An informal compact was struck which made it clear to all that,.so long as the CI'M leadership supported the PRI and turned out the vote, the PRI would support the CI'M and its efforts to improve the lot of Mexican labor.

Part of the rice of cooperation has been the creation of a group of chiefs (caciques within the ranks, at the same time they re ortedly are linin their own pockets at the in 7 ividual dues to agreements with factory owners not to strike--or a price.

The CI'M has been effective in helping t he government control latent political unrest with union workers. CI'M agreed to a "no strike" posture in 1982 when President Lopez Portillo granted a 10 percent wage hike in a period when inflation was running at 45 percent annually. The added CI'M and t h e transfer of contr! of the%%e housing fund (INFONAWT) to the union. id Dro was the creation of a "Workers Bank" run by the The CROC The next lar est union, a PRI creation, the Revolutionary Confederation of Workers and Peasants, zonfederacio Rev0 luciona r io de Ob reros v Ca mDesinos (CROC is composed of white-collar and government employees plus middle-class office workers. It also includes mid-level management in many industries. The CROC is the only union allowed to organize federal employees, and it ha s most of the shortcomings of CTM The Independents Two other unions exercise considerable influence both on PRI and on the Mexican body olitic: Joaquin Hernandez Galicia's Oil Workers Union, and Carlos Jonguitud Barrios reachers Union. Relations between th ese two organizations and PRI never have been smooth.

To the extent that relations deteriorated in the mid-l970s, the PRI and the government sought to undermine the authority of the union leaders. In 1976 Jonguitud Barrios was elected governor of San Luis Potosi, conveniently exailin him to a second-class mining and agricultural state, a four-hour drive north from Mexico E ity. While he was able to retain 13 his title as Secretary General of the teacher's union, he lost many of the prerequisites of control . He returned to the union in 1982 in a more coo erative frame of mind. Iikewise 1982 Lopez Portillo threatened to appoint him Ambassador to Fiji. That seemed to reduce the bickering within the upper executive ranks of the oil workers' union, and it added t o efficiency in the oil fields as well CI'M's 11,OOO affiliates, together with the affiliates of all other major labor organizations, are loose1 united under the banner of the government's Mexican Labor Congress, Conmeso de $.ab year to discuss labor-rela t ed ed to issue a sort of white paper adwing the administration of the group's concerns the Government was willing to take some risks to bring A ernandez Galicia to heel. In late CIU This government-led group meets twice a All of the government-affiliated u nions willin y play the role of strike breaker when a new union or labor organization attem ts to wie fl d more power than the PRI is willing to grant. Such events are common, and tg ey underline the mportance that the PRI places on dominating and control ling organized labor.

THE BUSINESS GROUPS The business worl d of Mexico is a textbook example of a "mixed econom sector is nearly as large as the private, and there is a definite regionality in ti e location Thepublic of major centers of manufacturing and commerce. Those business centers farthest from Mexico City tend to be those most opposed to the government's economic policies.

Furthermore, they are often centers of the PAN and other opposition political activity.

This has contributed to several direct clashes between the private sector and the government with the private sector generally on the losing side.

The &overnment of Mexico, together with state and municipal corporations, controls the producbon and distribution of electricity nationwide. The production, refining, and sales/distribution of all petroleum products are the exclusive sphere of activi of Petroleos de Mexico (PEMEX the state oil monopoly. This includes the production, a stribution and sale of natural as. Thus, all major energy sources are the property of the state.

Contemplation of t% is simp le fact of life can gwe an industrialist mghtmares owned w E ile trucking is mostly private. Bus lines are about evenly split between private thir cr of intercity lines publicly owned. Trucking is entirely private but controlled by route Most of the basic steel industry, with the exception of the privately held HyLsA, S.A Trans ortation is also a mixture. The railroads and light rail networks are federally and ublic (federal, state, or local) ownership with most municipal hnes and perhaps a licensing group , is state owned. Secondary steel fabrication is mostly private Nationalized Banking. The banking industry was about 70 percent private until 1982 when President Lopez Portillo, in a fit of i ue, nationalized it. About 40 percent of the ownership of the na t ionalized private b as been resold to the private sector, but the government retains effective control of every bank in the country 14 Paper production and importation is a state monopoly. This has obvious implications for media and the printing industry: cooperate or shut down. Broadcasting is somethine of an anomaly. While the use of the airwaves is controlled by the government, just as it is in the U.S about half of all broadcast outlets, both radio and television, are privately owned.

The largest TV network, Televisa, headquartered in Mexico City, while not anti- overnment, pushes a more right of center political and pro-business philosophy than anti-government, or perhaps it would be better to say anti-administration.

Between the labor laws, the prima cy of the CIM and associated unions, and the governments control of energy and licensing procedures, it is clear to any observer that mdustrialists and big business must cooperate with the government to survive. Part of this is evident in the fact that al l com anies and businesses emplo more than 15 persons Confederation of Industrial Chambers (CONCAMIN business and industry, but is, in fact, another voice of the government that f eld by the government. Some regional and local broadcasters are even more ha v e to join the local Chamber o Commerce and Indus;4 wcf is affiliated with the is group purports to speak-for Industrial Regions. Mexico has five important industrial re ons, two in the North and fall into two broad categories: the U.S. and foreign owned a s sembly factories operating on the border, many of which have significant Mexican articipation, and the agribusiness industries in Tiuana, Mexicali, Ciudad Obregon, an 1 Hermosillo. Ford has just opened a Sonora three in the South. In the North there is th e Sonora/Baja Cali P ornia axis. These groups car assembly p ant in Hermosillo, and there are also important mining operations in Further to the east is the Monterrey-Saltillo-Chihuahua triangle. Chihuahua has long been the industrial and commercial center for the agricultural and pastoral north. It also includes the assembly operations and off-shore banking that is centered on Ciudad Juarez.

Further to the South is the Monterrey-Saltillo axis. This is the industrial and financial located in Monterrey employ emicals, food processing, and food processing, and can equipment maker CYDSA (chemicals of Mexicos GNP glass maker in Latin America).

Saltillo is the center of Mexicos automobile production. Chrysler and GM build engines and cars there, includin parts for export to the U.S. Fords largest. engine plant in transportation centers.

Until the nationalization of 1982, the major industrial cities of the north were also financial centers. The major northern banks, including those of Monterrey, Chihuahua City, H ermosillo, and Baja California, controlled about 40 percent of the nations deposits and handled more than half of the foreign exchange transactions. One of the reasons for the nationalization of the banks by Lopez Portillo in 1982 was his belief that the i ndustrialists, through their banks, were exacerbating the nations financial roblems with Mexico is located between Salti f lo and Monterrey. Both cities are important rail and road capital flight. Whether true or not, the perception remains in Mexico that t !I e 15 nationalization was undertaken to punish "noncooperative" businessmen to place total control of banking and the financial system in government hands.

Southern Industry. In the South, industry is concentrated in three cities: Veracruz Guadalajara , and Mexico City. There are numerous satellite cities scattered around the big three, but none of s ecial note. Veracruz is the largest port on the Gulf of Mexico and the and is the home of the largest truck and bus maker in the nation. Guadalajara is ho me to a large concentration of second and third echelon industries, none especially important in its own right, but which have combined into a very important re 'onal and national center.

Finance and real estate are significant contributors to Guad zf ajara's economic success.

Mexico City is, of course, the heart of the nation. Virtually every major industry has offices there, and about 40 percent of the nations' industrial output is generated in the Valley of Mexico. It is the center of the largest bankin and financial system in the nation The business community and the PRI remain on the "outs A reconciliationis unlikely so long as the government mists on retaining control of the private banks. In response to the government's attitude, the business commun i ty has formed the Business Coordinating Council to attack openly the business and economic policies of the government. The group apparentl has strengthened its ties with the PAN, but remains circumspect insofar .as open continues to casti ate former Presi dent Lopez Portillo for his policies. Of course, no direct criticism of Presi t ent De la Madrid appears.

Another group, little howh but wieldi? eat commercial and financial power, is the Mexican Businessmen's Council, Conseio e %mpresarios de Mexico. This group, founded in 1975 follohg the assassination of Eugenio Garza Sada, leader of the Monterrey business community, seeks to rotect the interests of the major industrial, financial, and commercial entrepreneurs. de members of the organization, said to number about 30 probably represent the largest single concentration of wealth in the nation. The group's rel a tions with Luis Echeverria (President from 1970 to 1976) were excellent; with Lopez Portillo (1976 to 1982 a disaster; and with de la Madrid (1982 to date), cordial but not close center of the oil in B ustry. It also claims a significant share of secondar y steel processing and it dominates finance, industry, and commerce all t f e way to the Guatemalan border support o r PAN is concerned. This is less true in Monterrey, where the local press Whether some sort of reconciliation can be worked out between the business/industrial community and the next administration remains to be seen. If the government cannot bring business back into the fold, Mexico runs the risk of having a very well-educated articulate, and wealthy segment of society actively ositioning it s elf against the status quo difficulties, should the populace perceive the government to be loosening, or losmg, its control and in favor of the moderate opposition. This co up d lead, in turn, to more widespread THE UNIVERSITIES Many Mexican students see t hemselves as radicals; manifestations include on-cam us demonstrations and publication .of very nearly seditious newspapers. The student bo B y of the National University in Mexico Ci (the lar est Mexican umversity) is dominated by the Youth Movement of t h e Communist Bnf arty of exico, Juventude Co munista Mexican0 16- (JCM The communists have made inroads on many other federal campuses, notably in Monterrey and Guadalajara. Monterrey's private universiry, founded by the city's industrialrsts in 1946, is s taunchly anti-communist.

Today, the student population represents more of a potential for trouble than a significant threat. As more and more reasonably well-educated rofessionals are roduced by the system and find it increasingly difficult to obtain meani n& employment, tg e young graduates will be good candidates to lead another revolution in Mexico. They naturally would turn to lower classmen for "cannon fodder and their pleas for help would most certainly strike a responsive chord CONCLUSION Mexico has spent the last 65 years maturing and growing after a ten-year revolution.

The result has ken a one-party It is a corrupt system, not nevertheless to operate in by the consent of the leaders populace, but constrained f individual or leader to exercise absol ute power. Meanwhile, regulations concernin employment, business foreign investment, and the all pervasive state domination o the most important of the basic industries continue to be a brake on the economy Paul R. Wwerhof is a State Department officer on sped leave to The Heritage Foundation.

Mr. Wisgerhof has served in Mexico, Peru, Venezuela, Germany, Ecuador, and Japan. The views expressed in this study are his owll and should in no way be atmiuted to or necessarily reflect the views of the Department of State or the U.S. government 17 }{ \f1

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