by Kelly Simmons and Ana Vinas
The opening of Mexico's economy continues to win praises internationally in the midst of growing discontent at home. Despite inidcators that the Mexican economy is on the mend, including the fact that the Central Bank's foreign reserves are up, the stock market is up and the peso finished the year stronger than expected, the economic reforms of Presidents Salinas and Zedillo have caused hardships for working class and poor Mexicans. And those hardships may get worse still as a new wave of price increases on basic foodstuffs and utilities is enacted throughout the Republic. The new round of price increases began on the first of January and workers are complaining that higher prices are canceling out any gains made by a December increase in the federal minimum wage.
In December, the Mexican government raised the daily minimum wage to between 23 and 26 pesos per day. At the exchange rate in effect on the new year, 26 pesos was about $3.29. Most Mexican workers earn about twice the minimum daily wage, according to an Associated Press report, and the Basic Market Basket containing staples such as eggs, cooking oil, beans, rice and tortillas costs 64.50 pesos. A recent study by the National Autonomous University of Mexico (Universidad Nacional Autonoma de Mexico, UNAM) indicated that prices of a representative sample of food stuffs rose 913 percent between December 1987 and April of 1996, while the country's minimum wage rose only 249 percent.
In the new price increases effective January 1, the official price for milk rose from 8.50 pesos to 9.50 pesos for a half gallon, an increase of 12 percent. Tortillas rose in price from 1.70 pesos to 2.00 pesos per kilo, representing an 18 percent increase and utilities, from water to electricity to gas, went up about 1 to 2 percent nationwide. In Ciudad Juarez, the costs for water and sewer went up 10% on the first of January and are expected to rise 1% every month, adding up to an overall increase of 25%. And increases in the price of gasoline are expected to have an effect on the price of many items from food to furniture.
In spite of natural gas reserves in Mexico, the price of gas has risen 104% over the past two months. According to a report in El Norte, natural gas is more expensive in Mexico than in the U.S., Singapore, France, Canada, Argentina and Venezuela. The price in Mexico for natural gas rose from 2.70 pesos per million BTUs to 3.73 pesos and by the end of December rose to 3.92 pesos per million BTUs. At the same time, the U.S. price was 3.70 and the Japanese price was 3.50. In protest to the rising gas bills thoughout Juarez, residents in Ciudad Juarez have been calling Profeco and the gas companies in record numbers to complain. Many are asking Profeco to escrow their payments while seeking debtors protection. Sending payments to Profeco, the consumer protection agency, will keep accounts from becoming delinquent and the gas from being shut off, until the dispute is resolved.
In local response to rising prices, protesters from the Neighbor's Union in Chihuahua seized a milk distribution truck on New Year's eve and gave away 2,700 liters of milk to people in the street. The cost to the company was estimated at 29,000 pesos. In another protest action in late January, 75 members of the same Neighbor's Union of Chihuahua stole 1,700 liters of gasoline out of 17 gas stations by first filling up and then handing out a protest flyer instead of paying. The price of gasoline rose 8% in December and 1.2% in January. The flyer stated that PEMEX, Mexico's petroleum company, belongs to the country. It asserted that it only costs 25 pesos per barrel to extract the oil and every day 2.5 million barrels are exported from Mexico for 140 pesos per barrel. No protesters were arrested.
For more information see related stories in November issue, December issue.
Sources: Diario de Juarez, El Paso Times, El Norte