Peña Nieto adds fuel to the fire in Mexico

January 10, 2017

Héctor A. Rivera reports on a wave of protests across Mexico in response to the government's devastating increase in energy and electricity prices.

MEXICO WAS rocked by demonstrations and blockades throughout the first days of the new year, as thousands took to the streets to protest the government's unpopular increase in gasoline, diesel and electricity prices.

The increase in gas prices--known as a "gasolinazo" in Mexico--has become a dreaded yearly practice, in which the government imposes 2-3 percent increases at the state's national oil company Petroleos Mexicanos (Pemex) to close budget shortfalls.

After coming to power in 2012, President Enrique Peña Nieto of the ruling Institutional Revolutionary Party (PRI) had promised that gasolinazos would not take place in 2017 and 2018. In fact, he claimed that with the privatization of the energy sector, gas prices would go down, as more competitors entered Mexico's formerly nationalized energy market.

So when Peña Nieto's government announced in the final days of December that gasoline prices would shoot up by as much as 20 percent, diesel by 15 percent and electricity by 4.5 percent, the reaction among Mexico's already cynical population was angry disbelief.

Protesters flood the streets of Mexico City to oppose gas price hikes and a corrupt president
Protesters flood the streets of Mexico City to oppose gas price hikes and a corrupt president

Taxi drivers and truckers were the first to organize blockades on highways and at gas stations. Many women also joined the blockades, making the point that an increase in gas prices inevitably leads to an increase in the cost of basic foodstuffs and public transportation.

In many neighborhoods of Mexico City and its metropolitan area, committees and civil society organizations blocked access to gas stations every day, trying to convince drivers not to buy gasoline. In Ecatepec, a poor suburb of the capital, demonstrators commandeered a Pemex tank truck and distributed the fuel as part of their demonstration.

Roving contingents of protesters in the capital gathered at busy metro stations, overwhelmed security guards, and forced them to open gates and turnstiles to the general public, establishing "the people's metro."

In many parts of the country, protesters also provided free access on toll roads to drivers by shutting down tollbooths in the country's extensive toll road network.

THE WIDESPREAD unrest has made the price hikes unpopular even in elite circles in Mexico.

Gustavo de Hoyos, leader of the Confederation of Mexico's Employers (Coparmex)--the national business bureau--criticized the policy and urged Peña Nieto to instead cut costs by tackling corruption and cutting government spending. The Mexican Catholic Bishops Council also criticized the increase of fuel prices and asked the government to consider the plight of the poorest Mexicans.

Peña Nieto has defended the measure, calling it "a painful, but necessary decision" and claiming that social programs for the poor would be the first affected if the energy hikes hadn't closed the budget gap.

The president insisted that the measure had nothing to do with the unpopular neoliberal "reforms" to the energy sector that his party pushed through Congress in 2014, and claimed that the hikes were necessary because the price of oil had increased internationally.

While it is true that international energy prices have slightly increased over the last year, the price of a barrel of oil has fallen considerably since the summer of 2014--yet throughout the last two years, the cost of gas and diesel has not dropped in Mexico. On the contrary, they continued to increase.

Furthermore, Peña Nieto is simply lying when he denies the connection between the energy reforms and price increases. The liberalization of prices is one of the first components of the reform plan to allow the private sector to penetrate Mexico's energy market.

After February, private gasoline stations in the north of the country will be able to regulate their own prices, and by the end of the year, gas prices throughout the country will supposedly reflect international market prices, breaking the government's hold over this important source of income for the federal budget.

Besides the president's tepid comments, there has been a concerted government effort to create a climate of fear and panic to dissuade people from joining protests and blockades. In the metropolitan region of Mexico City, police patrols were telling people to stay inside their homes--effectively establishing a curfew.

Meanwhile, a wave of looting swept major department stores and several convenience stores in the city's poorest neighborhoods. Although many people took part in the looting of their own accord, in and outside of the capital, it is widely suspected that the looting was encouraged by the PRI's local party apparatus and its cyber-bots on social media, to escalate the climate of fear and confusion.

ONE OF the most surprising developments of this wave of protests is that Northern Mexico, the part of the country that has generally been more conservative and in favor of U.S.-style development, has become mobilized like never before. By contrast, traditional strongholds of social resistance in the country's South have been relatively calm.

The presence of organized crime and a militarized police force often dissuades people from public protests in many Northern cities. But this time around, the North has been leading the resistance, with the state of Chihuahua alone registering more than 50 protests and blockades.

At Sonora's usually calm border crossing of Laredo, protesters blocked the railroad that crosses into Arizona by setting up a camp on the tracks. Demonstrators also blocked the U.S. border in Tijuana, on the Pacific Coast, while other protests took place in Hermosillo, Mazatlán, Culiacán, Camargo and Monterrey.

Some of the most militant demonstrations have been in Rosarito, a small beach town popular with American tourists in Baja California. The town is home to Pemex's Northern Distribution Center--people from neighborhoods surrounding the facility staged a three-day blockade, effectively shutting down distribution throughout northern Baja California.

Every time the police cleared the blockade, the protests grew stronger, until the government was forced on January 7 to fly in more than 200 additional federal police forces to break the blockade. Videos documenting the resulting police brutality circulated on social media with the hashtags #Rosarito #NoAlGasolinazo and #FueraPeña.

The government has made some small concessions, agreeing last Thursday to reduce the salaries of top government officials by 10 percent, but it has refused to give in to protesters' main demand to reverse the price hikes.

On the contrary, the PRI's president in the Senate defended the measure, while other political parties in the government criticized the hikes, but stayed away from the protests.

THESE ENERGY price demonstrations are the most extensive yet faced by the administration of Enrique Peña Nieto, and they highlight popular outrage with the energy reform pushed through Congress by his administration.

Unlike the political crisis caused by the protests demanding justice for the massacred student teachers of Ayotzinapa or teachers union actions against Peña Nieto's education reforms, this latest round of demonstration has brought out broader sectors of society to the streets.

The reformist Movement for National Regeneration Party (MORENA) headed by Andrés Manuel López Obrador (AMLO) has not come out against the price hikes as a party, although some of its militants have been organizing demonstrations.

AMLO isn't rocking the boat at this point since he hopes that discontent with Peña's administration will bring him to power in next year's presidential election. Organized labor has been slow to respond, although the miners' union came out in force in Michoacán during a demonstration on Saturday.

In a country where more than 50 percent of the population lives below the poverty line and where "middle class" salaries range between $750 and $1,400 per month, it is unclear if the administration has gone too far this time. More national days of action have been called over the coming days and weeks, and another gasolinazo is expected in February.

For its part, the government yesterday announced a plan to strengthen the economy and protect the poor, but the plan has already received criticism from labor organizations and even from the Coparmex as a publicity stunt that doesn't go far enough. It remains to be seen if the wave of protests against the crippling impacts of the gasolinazo are affected by these latest moves.

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