10. The (social) fourth transformation in international comparative perspective

Mexican public debate on social policy is hindered by a stubborn provincial outlook where all that is not familiar is often quickly cast aside as either ridiculous or dangerous. In this text we will discuss three key social policies of the fourth transformation through the lens of a comparison with other (Latin) countries. As I will show, many of the key policies of the 4T are far from wild ideas, but instead are adaptations of tried and tested formulas that Mexico missed out on in the past.

Mexican national media and social networks pay attention to the myriad of new policy initiatives like never before. Besides an overload of classist prejudice, the profoundly provincial scope of these discussion is striking: we routinely discuss them as if they only existed in Mexico and the president invented them on the spot. On the back of this misconception ride various criticisms that claim key policies of the 4T are ‘improvised’, ‘ridiculous’ or ‘dangerous’. When international comparisons are brought up from the left with European nations with similar policy agendas, they are faced with cheap Malinchista attitudes that such policies cannot work in Mexico. Only international comparison to other Latin countries is permitted, and the only point of reference since 2006 has been Venezuela.

The latter comparison hides more than it reveals. Mexico has seriously lagged behind other Latin American countries in social policy and social development under the past three administrations. We are the only major Latin country that has not significantly reduced poverty and inequality since the turn of the 21st century, even if our basic economic development matches or surpasses most. A key difference is that various countries elected democratic socialist governments comparable to ours earlier this century (or were allowed to elect them). If not, such as in the case of Colombia, they have at least adopted key social policies that Mexico missed out on. The following figures of poverty rates during Latin America’s ‘left turn’ from 2005 to 2012 speak for themselves[1]. Keep in mind that the measurement of poverty in this table is calibrated for comparison, our actual poverty rate according to domestic measurement is over 50 percent.

  Poverty around 2005 Poverty around 2012
Argentina 24.8 4.3
Bolivia 63.9 36.3
Brazil 36.4 18.6
Chile 13.7 10.9
Uruguay 18.8 6.1
Mexico 31.7 37.1

While economic factors play a role, experts agree much has to do with the more state-oriented and inclusive social policies that these countries implemented. Far from steering the country into dangerous new waters, the 4T is merely catching up with what people have been historically denied. In the rest of this essay I will elaborate on three key policies.

The first one is the funding of high school children, called ‘Beca Benito Juárez para jóvenes de Educación Media Superior’: it pays poor families 1.800 pesos every two months for up to ten months for the enrollment of their children in school. This is what is called a ‘conditional cash transfer’ (CCT), a policy innovation that was first popularized by success in Brazil and later spread throughout most major Latin American countries. Mexico’s program builds on earlier smaller scale experiments with the same principle from the EPN government (and earlier frontrunners going back to the 1990’s). Since people only receive help on the condition they do something positive, the goal of CCT’s is twofold: a) supporting a social group that desperately needed support, b) encourage enrollment in key services, in this case education. It is crucial to understand this policies obliges and enables people in the same moment. According to OECD data, 62.3% of Mexican adults had an educational level in 2017 of below upper-secondary education[1].In other words, the majority dropped out of school, in many cases to work and provide for the needs of the family (while you complain about internships abroad in masters). This is why conditional cash transfers (and not coupons for books or uniforms) are exactly what we need. If your opinion on this topic is warped by a meme of a guy holding a beer, know that research indicates these programs lifted millions out of poverty and kept them longer in school. By the way, it also indicates that families predominantly tend to use this money for investments and food.

One of the historically most important ‘catch-ups’ of the fourth transformation was the expansion of minimum pensions under the ‘Programa Pensión para el Bienestar de las Personas Adultas Mayores’: this allows people of 68+ (65 for indigenous) to register for a +- 1300 pesos a month benefit. One should first appreciate the historical background of this long-overdue correction. In 1995 Mexico abolished the old defined benefit system and replaced it with individualized contributionary system for formal employees. It was less generous and resulted in Mexico having the lowest pension replacement rates in the industrialized world, as well as stricter eligibility conditions. Given the majority of Mexicans gains income from informal work and self-employment[2], contribution to the fund was problematic and left out millions. In 2013, the EPN government (re)added public guaranteed pensions, but they only paid half of the current program. The universality of the new program (anyone can claim it) fits broader policy trends in Latin America, where pension coverage has increased dramatically in the past decades. Various countries went to the same privatization wave in the 1990’s, but unlike Mexico in the 21st century countries like Brazil, Chile, Argentina and Bolivia chose to re-nationalize and universalized their (minimum) pensions. Moving avoid from a commercial or contributory models means that also people who have worked outside the formal sector or performed unpaid work can avoid starvation at old age. This benefits women in particular. Note that a universal pension does not require one to retire, which is questionable in terms of efficiency (various rich conservatives claim it with one hand, while criticizing the 4T with the other). However given the scope of informal employment and the height of the pension, making it supplementary to earned income is an understandable choice. Doubling the pension is however only a first step, the resettlement of the historical depth towards the working class requires further increases that lifts old people not just out of extreme poverty but poverty in general.

Last we will discuss the labor market activation program called ‘Jóvenes Construyendo el Futuro’: this program offers young people aged 18-29 in need of employment or education an income of 3600 pesos per month for max one year. This program is more unique and innovative than the previous ones, but deserves discussion because it is also the most (willingly) misunderstood one. To start, this does NOT pay people to not study or work, but the exact opposite: it either takes the form of a paid internship (work!) or support for higher studies. Second, this really is a subsidy to companies (and universities), since the former get to hire people in training contracts while the government pays their wage (which appropriately is above the poverty line). While the program is more innovative than my first two cases, some international comparison helps. To start, Mexico was the only industrialized nation that in 2017 spend 0 percent of its GDP on active labor market policy (‘getting people jobs’). While Mexico spend almost nothing, countries like Brazil, Argentina and Chile have significantly increased their spending on labor market policy since the turn of the century. For example ‘Programa Nacional de Estímulo ao Primeiro Emprego’ that exists since 2003 in Brazil works somewhat similar to ‘Jóvenes Construyendo el Futuro’, in so far that it subsidizes companies to hire young people who haven’t worked before. These are useful experiences to learn from.

To conclude this essay, I want to come back to the question of why we keep discussing social policies as if AMLO invented them yesterday. Partly this comes from the unending need of the opposition to portray every single thing the government does as ‘ridiculous’, ‘dangerous’ and ‘only in Mexico’. But part of the blame also falls on the government itself, which avoids comparisons and has marketed itself in a national discourse. Much could be learned from such comparisons, not just to explain but also improve our imperfect policies. Although it is never said by any official in such words, Mexico’s government clearly falls within the democratic-socialist camp. There is no shame in that, since countries molded in this fashion are not only the (socially) most successful in Latin America, but globally hold the first spot on the Human Development index.

[1] https://data.oecd.org/eduatt/adult-education-level.htm

[2] https://www.ilo.org/wcmsp5/groups/public/—americas/—ro-lima/documents/publication/wcms_245889.pdf

[1] https://www.cepal.org/en/publications/37627-social-panorama-latin-america-2014?fbclid=IwAR1iIFy0FBKV-GRZujy-QesFgFI3W7dpFBrPiBiwRvwLhlelIIgq0RNRe4c

Leave a Reply

Your email address will not be published.