The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Mexico, full of fiscal anxieties

Posted by
Photo: Gerardo María Alcocer Cetina/Oxfam México

Fiscal justice in the South

Kim Piaget is a gender justice adviser at Oxfam Mexico

“When your father’s generation returned to the capital with their doctorates, they began to lobby furiously for economic integration.”

Thus begins Nicolas Medina Mora’s brilliant essay, “Two Weeks in the Capital” published earlier this year. The chapter “Modernity and Social Justice” captures in poetic complexity how we, Mexico, entered an economic and fiscal trap all too eagerly at the dawn of the North American Free Trade Agreement (NAFTA) and its promise of capital flows, commodities, and labor. But socialists, leftists, and Zapatistas called it out for what it was: Another rigged chapter in Faustian liberal economics.

The effects Medina Mora describes are of no surprise to anyone at Oxfam, or in Mexico, for that matter. For a few decades, Mexican GDP grew, but not everyone with it. Carlos Slim became the richest man in the world for a while, but millions remained as poor as they had ever been—especially rural women.

The liberal economics doctrine our forefathers imported was “not the objective science they claimed it to be, but rather a political instrument designed to justify imperial expansion—a postmodern American equivalent of 16th-century Spanish Catholicism.” Fiscal policy being one of its instruments, toed the delicate line of stability without ever really dipping into redistribution. A dupe that equates order with justice.

Fiscal policy has been pandered as an instrument for economic growth in the South for decades. In Mexico, this approach made for regressive tax setups, which were kind to transnational corporate interests and, for all the trouble they generate, abysmally ineffective. Of all OECD countries, Mexico has the lowest tax revenue rate (17.2 percent) despite GDP increases and fiscal reform. Even after increasing revenue rates by almost 30 percent, Colectivo Pe$o pointed out that health, education, and infrastructure expenditures dropped in 2017. As oil reserves progressively decrease and national debt increases, a lack of oversight and participatory approaches will make fiscal policy unresponsive to present and pressing needs.

This is problematic when the tax structure gravitates toward market neutrality. But life is not gender neutral, nor is the economy. Tell that to the 1 in 3 Mexican households currently led by a woman, who can spend up to an estimated 50 percent of their income in direct taxes. Or to women who own less property than men, have a lower economic participation rate (44-45 percent), carry out 75 percent of unpaid and care work, and the 55.5 percent who make a living in the informal sector.

As ICRICT’s Magdalena Sepúlveda points out, we know all of this affects women’s tax status negatively, however Mexico does not disaggregate data by gender under the pretext of fiscal secrecy.

Fiscal institutions and states have not taken enough time to consider what taxation-for-growth entails, or at the cost of whom. Thankfully, feminist economists have been questioning economic orthodoxy in its entirety since the 1960s. Medina Mora may not have realized that his essay had an important intersectional argument: the fathers, the Mexican patriarchy, adopted whitewashed, flawed, and unequal economic policies that made a country subservient to special interests and exploitative economics. Fiscal policy hasn’t extended to the many indigenous and ethnoracial groups lacking access to land, rights, or social protections. Fiscal policy forgets that, in a country where women outnumber men, social and care infrastructure are a priority investment. Fiscal policy seeks growth in rough numbers, and roughs up those who can’t or won’t grow.

Fortunately, civil society does not forget. Oxfam Mexico—with partners, allies and fellow actors—calls for new fiscal policy that redistributes the burden, the benefits and invests in a new social contract. In the wake of July’s historic electoral process and with NAFTA renegotiations under way, we have an exciting opportunity to tackle these postcolonial anxieties once and for all.

Share this story:

Join the conversation

  1. kevin.s.bell@gmail.com'Kevin Bell

    Specifically what kinds of fiscal and trade policies are you advocating for? In what ways can trade deals be changed to better benefit the poor and working class?

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *