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Carlos Salinas
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Carlos Salinas de Gortari (Mexico City, April 3, 1948) is a Mexican economist and politician affiliated to the Institutional Revolutionary Party (PRI) who served as President of Mexico from 1988 to 1994. Earlier in his career he worked in the Budget Secretariat all the way up to Secretary. He was the PRI presidential candidate in 1988, and was elected on July 6, 1988 amid allegations of electoral fraud.
os Salinas was born in Mexico City as the son of Senator Raúl Salinas Lozano and Margarita de Gortari Carvajal.
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Encyclopedia
Carlos Salinas de Gortari (Mexico City, April 3, 1948) is a Mexican economist and politician affiliated to the Institutional Revolutionary Party (PRI) who served as President of Mexico from 1988 to 1994. Earlier in his career he worked in the Budget Secretariat all the way up to Secretary. He was the PRI presidential candidate in 1988, and was elected on July 6, 1988 amid allegations of electoral fraud.
Political career prior to presidency
Carlos Salinas was born in Mexico City as the son of Senator Raúl Salinas Lozano and Margarita de Gortari Carvajal. He graduated with a degree in economics from the National Autonomous University of Mexico in 1969. He obtained a Master of Public Administration in 1973, a Master of Arts in 1976, and a PhD in Political Economy and Government in 1978, all from Harvard's John F. Kennedy School of Government and Graduate School of Arts and Sciences. Upon his return to Mexico he became a professor at his alma mater. Although a member of the PRI since his student days, it was not until the presidency of Miguel de la Madrid that he was assigned a government post as minister of the Bureau of Planning and Budget (Secretaría de Planeación y Presupuesto), where he served from 1982-1987.
The political atmosphere in Mexico began to change during the 1980s. The country was experiencing economic crisis, mainly caused by the splurges of previous administrations and a drastic drop in the price of oil, forcing the country into default. Several important members of the PRI resigned, among them Cuauhtémoc Cárdenas, the son of Lázaro Cárdenas, an extremely popular president of the 1930s. The 1985 Mexico City Earthquake, with its resulting 10,000 deaths, has been considered a catalyst for the promotion of democracy and the need for change. The de la Madrid administration provided a very inefficient response to the catastrophe, resulting in mass action from citizens who organized successful rescue teams, many of them led by prominent left-wing intellectuals.
Elections
Cárdenas registered as an opposing candidate from a left-wing coalition called Frente Democrático Nacional. He rapidly became a popular figure, and became the first opposing candidate to fill the Zócalo with sympathizers and to seriously threaten the PRI which had won all presidential elections since its inception in 1929. The Ministry of Interior (Secretaría de Gobernación), through its Federal Electoral Commission, was the institution in charge of the electoral process, and installed a modern computing system to count the votes. On July 6, 1988, the day of the elections, the "system crashed" (se cayó el sistema), and when it was finally restored, Carlos Salinas was declared the official winner, even though several national and international surveys had declared Cárdenas the winner. Even though the elections are extremely controversial, and some declare that Salinas won legally, the expression se cayó el sistema became a colloquial euphemism for electoral fraud.
The process involved two suspicious shutdowns of the computer system used to keep track of the number of votes. Suspicions later grew as Congress voted (with support from the National Action Party, PAN) to destroy without opening the electoral documentation that could prove otherwise. Other people believed that Salinas, in fact, won the ballot, albeit probably not with an absolute majority as the official figures suggested, although that is not required under Mexican election law.
During an interview for television in September 2005, Miguel de la Madrid acknowledged that the PRI lost the 1988 elections. However, he immediately cleared his comment by saying that the PRI had "at least lost a significant amount of voters". Asked for comment on de la Madrid's statements, Senator Manuel Bartlett, who was the president of the Federal Electoral Commission (Comisión Federal Electoral) during the de la Madrid administration, declared Salinas won the election albeit with the smallest margin of any PRI candidate before him. He attributed de la Madrid's remarks to his old age (71 years old ) and the remarks being taken out of context by journalist Carlos Loret de Mola.
Presidency
In the early years of his term, President Salinas launched bold initiatives such as the reversal of the 1982 bank nationalization, restoring official relationships with the Roman Catholic Church and the Vatican State, changing land property legislation, and most importantly negotiating the North American Free Trade Agreement (NAFTA) with the United States and Canada.
Carlos Salinas' term made significant changes in the following areas:
Economic reforms
- Renegotiated the external debt through the Brady Plan.
- From 1975-1988, inflation had reached historic levels, up to a peak of 159.17% in 1987, a year before his term started. By the end of his term, inflation had been reduced to 7.05% in 1994, the lowest figure in 22 years. Shortly after leaving office, due to the December Mistake, inflation rose to 51.48%.
- From 1975-1988, the peso had devalued from .125 MXP per U.S. dollar, to 2.65 MXP per dollar. During his term, the peso devalued from 2.65 MXP to 3.60 MXN, by 30 November, 1994, the last day of his term; thus the peso devalued far less than it had in the two previous terms. The peso devaluated from 4 dollars to 7.2 in a single week due to the December Mistake.
- Negotiated the North American Free Trade Agreement (NAFTA), with the United States and Canada.
- He continued a privatisation programme initiated by his predecessor, by which the government retained only a few of the hundreds of companies and small business that were nationalized, mainly during the 1970s. One of the most important privatizations was Telmex, which remained a monopoly until mid-1990s, and which was sold to a consortium led by Carlos Slim Helú. Arguably, Salinas might have privileged him, as many critics point out, in the same way he had privileged Salinas Pliego with the privatization of Imevisión (later TV Azteca) over the rest of the bidders, all those deals were related with corruption according with the majority of the Mexican population. As a result, the number of state-owned industries continued to drop, from apox. 600 in 1988 to a minimal 250 in 1994.
Political reforms
- Congress reformed the Electoral System, making it citizen-controlled, and independent of the Secretaría de Gobernación (Ministry of the Interior) and introduced the "Credencial para Votar" (Voting Credential) as the universal and free I.D. in Mexico (thus, automatically registering all citizens in the electoral system, allowing them to vote without bureaucratic hindrances and without pre-registering as in the United States). The 1994 elections were the first to have international observers, and were considered, at that time, the fairest elections in the century, though not free of controversy.
- He reformed the Clerical Laws which had forbidden Catholic priests from voting, and established a new relationship between State and Church, which had been severely damaged after the Cristero War. The new laws also allowed the Catholic churches to own their own buildings (which had been nationalized
Election year and economic collapse
Salinas' spending spree
Carlos Salinas' popularity and credibility at the time was not high. The economic bubble gave Mexico a prosperity not seen in a generation. This period of rapid growth coupled with low inflation prompted some political thinkers and the media to state that Mexico was on the verge of becoming a "First World nation". In fact, it was the first of the "newly industrialized nations" to be admitted into the Organisation for Economic Co-operation and Development (OECD) in May 1994. It was a known fact that the peso was overvalued, but the extent of the Mexican economy's vulnerability was either not well-known or downplayed by both the Salinas de Gortari administration and the media. This vulnerability was further aggravated by several unexpected events and macroeconomic mistakes made in the last year of his administration.
Several economists and historians, amongst them Hufbauer and Schoot (2005), have analyzed some of the events and policy mistakes that precipitated the crisis of December 1994. In keeping with the PRI election-year tradition, Salinas launched a spending spree to finance popular projects (and thus bolster support for his own party), which translated into a historically high deficit. This budget deficit was coupled with a current account deficit, fueled by excessive consumer spending as allowed by the overvalued peso. In order to finance this deficit, the Salinas administration issued tesobonos, an attractive type of debt instrument that insured payment in dollars instead of pesos. This may have been a response to three important events that had shaken investor confidence in the stability of the country: the aforementioned Zapatista uprising, the assassination of PRI presidential candidate Luis Donaldo Colosio, and the assassination of José Francisco Ruiz Massieu, Salinas' former brother-in-law who was also the Secretary General of the PRI, and whose murder was never solved during Salinas' presidency, even when Mario Ruiz Massieu (Francisco's brother) was the attorney general in charge of the investigation.
These events, together with the increasing current account deficit fostered by government spending, caused alarm amongst Mexican and foreign T-bill (tesobono) investors, who sold them rapidly, thereby depleting the already low central bank reserves (which eventually hit a record low of $9 billion). The economically orthodox thing to do, in order to maintain the fixed exchange rate functioning (at 3.3 pesos per dollar, within a variation band), would have been to sharply increase interest rates by allowing the monetary base to shrink, as dollars were being withdrawn from the reserves (Hufbauer & Schott, 2005). Given the fact that it was an election year, whose outcome might have changed as a result of a pre-election-day economic downturn, the Banco de México decided to buy Mexican Treasury Securities in order to maintain the monetary base, and thus prevent the interest rates from rising. This, in turn, caused an even more dramatic decline in the dollar reserves. These decisions aggravated the already delicate situation, to a point in which the crisis became inevitable and devaluation was only one of many necessary adjustments. Nonetheless, nothing was done during the last five months of Salinas’s administration even after the elections were held in July of that year. Some critics presume this was done in order to maintain Salinas’s popularity, as he was seeking international support to become director general of the WTO. Zedillo took office on December 1, 1994.
The December Mistake
- See also 1994 economic crisis in Mexico.
A few days after a private meeting Zedillo suddenly announced his government would let the fixed rate band to increase 15 percent (up to 4 pesos per US dollar), by stopping the unorthodox measures employed by the previous administration to keep it at the previous fixed level (e.g., by selling dollars, assuming debt, and so on). This measure, however, was not enough, and the government was even unable to hold this line, and decided to let it float. While experts agree that devaluation was necessary, some critics of Zedillo's incumbent 22-day old administration, argue that although economically coherent, the way it was handled was a political mistake. By having announced its plans for devaluation, they argue that many foreigners withdrew their investments, thus aggravating the effects. Whether the effects were aggravated further or not, the result was that the peso crashed under a floating regime from four pesos to the dollar (with the previous increase of 15%) to 7.2 to the dollar in the space of a week.
Mexican businesses with debts to be paid in dollars, or that relied on supplies bought from the U.S., suffered an immediate hit, with mass industrial lay-offs and several suicides. Businesses whose executives attended the meeting at Zedillo's office were spared the nightmare - forewarned, they quickly bought dollars and renegotiated their contracts into pesos. To make matters worse, the devaluation announcement was made mid-week, on a Wednesday, and for the remainder of the week foreign investors fled the Mexican market without any government action to prevent or discourage it until following Monday when it was too late.
Salinas faced widespread criticism in Mexico. He was blamed by the majority of the population for the collapse of the economy, and the method of his privatization of several government-run businesses (which had benefited a few of his friends like Carlos Slim). Salinas privatized Telmex, the government owned provider of telecommunications service and placed the owner of the newly formed company into the name of a formerly unknown person by the name of Carlos Slim Helú. In Mexico Slim is referred to as "presta nombre" or a man who merely is a placeholder for others who want to hide their actions. As a result Teléfonos de México (Telmex), with Carlos Slim as the owner, has become a world dominating power with monopolies that stretch throughout Latin America and as far as Spain with Carlos Slim now being named the second richest man in the world. Mexico hosts the most expensive telephone service in the world through the Carlos Slim/Carlos Salinas monopoly of TELMEX. There are no documentation for this claims. Carlos Slim was merely an average employee for the phone company making a modest salary, but through his connections somehow managed to be the prime candidate for Carlos Salinas to place as the new owner of TELMEX in order to hide his intent to make a legal robbery of billions of dollars from the Mexican people by privatizing Telmex. These claims are also undocumented. Moreover, he was blamed for allowing corruption, cronyism and drug dealing friendships. With respect to the collapse of the economy he rapidly responded by blaming Zedillo's inept handling of the situation, coining the term "December Mistake" to refer to the crisis and Zedillo's mistakes. He then argued that he had talked to Zedillo of a possibility of "sharing the burden" of the devaluation by allowing the peso to devaluate a certain percent before his term was over, and the rest of the necessary devaluation would have been done during Zedillo's administration.
The December Mistake caused so much outrage that for a long time, Salinas did not dare return to Mexico (he was campaigning worldwide for World Trade Organization (WTO) head at the time, which he lost). The incident also served to make it clear that his influence (if any) on the Zedillo administration was over.
Salinas was blamed for allegedly ignoring the economic problems of his administration, and, his prestige lost, he exiled himself to Dublin, Ireland, where he eventually married again. Although he is free to return to Mexico and does so from time to time, he always stirs controversy. His brother Raúl went to jail accused of masterminding a political assassination of José Francisco Ruiz Massieu, a member of their own party and of committing fraud while working for the government during Carlos's presidency.
Salinas's book
In the last years of Zedillo's term, Salinas came to Mexico to announce the publication of his highly controversial, thousand-page book, Mexico: The Policy and the Politics of Modernization. Written during his stay in Ireland and full of quotes from press articles and political memoirs, it defended his achievements and blamed Zedillo for the crisis that followed the Salinas administration. Denying all accusations against him, including plotting Luis Donaldo Colosio's murder, his visit shocked Mexico's political scene with surprise interviews in major media. A few days later, however, illegal recordings of a conversation between jailed brother Raúl and one of his sisters were leaked to the media, and their conversation about who really owned the family fortune and Raúl's imprisonment quickly put an end to the affair.
The book - a thick volume with small print, every page filled with footnotes and margin notes - proved as controversial as Salinas himself. Its objective value is questioned since it is clearly a document written in self-defense, but it still remains a prime source of material for the scholar, clarifying how Salinas viewed himself (and, critics add, demonstrating his pride and selfishness). One group of bank debtors formed after the December Mistake (El Barzón) declared their outrage at what they saw as profiteering from their tragedy and took the decision to transcribe the whole book, respecting even its layout, and to give it away electronically, in spite of legal threats from the publisher. Salinas probably did not mind - he had already announced that he would donate a copy to each public library in the country.
Later years
He divorced and married again. He seems to spend most of his time in London with regular travel to Mexico, but he is no longer the media sensation he was. Former Mayor of Mexico City, Andrés Manuel López Obrador, of the left-wing Party of the Democratic Revolution (PRD) usually blamed him for being the mastermind of what he perceives as confabulations against his government and presidential ambitions, not calling him by name but as the unmentionable.
On December 6 2004, Salinas's youngest brother, Enrique, was found dead in Huixquilucan, Estado de México, inside his car with a plastic bag strapped around his head. At first authorities were reluctant to talk of homicide, but later admitted it was, while denying any political implications. As days passed, authorities believed it was either an accidental killing in an extortion attempt by a close friend or associate, or a passion crime involving a member of his family. In either case, it probably was either improvised or carried out by inexperienced criminals. Enrique's body was abandoned in his car in a zone with surveillance cameras. The tapes show confusion and disorientation by the people who drove Enrique's car to the place and left in another vehicle. Enrique's cell phone was used after his death, and left in the car. Unknown fingerprints were left in the car, and human hairs were found in Enrique's fist. It was determined he was knocked unconscious and killed by suffocation, but not by the plastic bag found with his body. Apparently he knew his attackers and it is possible that he voluntarily met with them.
Many members of his family were called to testify, including jailed brother Raúl, but not Carlos. Some years ago Enrique was suspected of being financial cover for his elder brothers Raúl and Carlos and had an account in a Swiss bank frozen, but most of the time Enrique held a low profile, being uninvolved with politics and mostly an entrepreneur practically unknown to the public. After his death, it was revealed he was being investigated in France and by Interpol; that he had financial problems, and shortly before his death he wrote a letter where he explained in vague terms that he was subjected to terrible pressure by leaks (presumably a magazine article published) and friends, and was afraid for his and his family's well being.
In January 2005, authorities confirmed the media leak that there was the possibility Enrique was killed by agents of the Agencia Federal de Investigaciones (AFI) (Mexico's federal criminal police force). According to this hypothesis, he had financial problems with his ex-wife and was advised by his lawyer to hire some AFI agents the lawyer knew to fix the problem. Enrique contacted them but later reached an agreement with his ex-wife and tried to forget the matter, but the agents blackmailed and ultimately murdered him. Authorities also acknowledged they were suspicious of members of Enrique's family because they gave conflicting testimony regarding the hours before the murder. Their relationships with Enrique were also difficult. At roughly the same time, French authorities revealed they were prosecuting brother Raúl and other members of the family for money laundering.
Salinas re-married soon after leaving office, to Ana Paula Gerard, and moved his residency to Ireland for a few years. He has six children: Mateo, Cecil, Emiliano, Juan Cristobal, Anna Emilia and Patricio.
He now lives in London
External links
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- of Miguel de la Madrid where he declares "PRI lost presidential election in 88 or at least lost a significant part of its voter base".
- of Manuel Bartlett to de la Madrid remarks.
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