Background and Context
From 1997 to 2000, I served as a federal deputy for the PRD during a unique legislative period where no single party held a majority in the Chamber of Deputies. This necessitated cooperation between the three major political forces: PRI, PAN, and PRD. Amongst PRD legislators, there was a clear understanding that preventing bank failures and protecting savers was crucial. However, it was demanded that government funds allocated for this purpose also benefited medium and small borrowers, not just large debtors and savers.
Disagreement with Fobaproa Implementation
I disagree with former President Ernesto Zedillo’s assertion that the bank rescue proceeded with complete transparency and without personal interests involved. While acknowledging the necessity to prevent bank failures and safeguard savers, I contend that the Fobaproa (Mexican bank rescue program) did not adequately address the concerns of medium and small borrowers. Instead, it primarily benefited bankers and investors, leaving smaller debtors at a disadvantage.
- Government’s Role: The government refused to consider the interests of smaller debtors, citing concerns about fostering a “culture of non-payment” among the populace. Their primary objective was to save bankers, not small debtors.
- Unjust Distribution of Funds: Certain bankers received exorbitant sums through the Fobaproa, even though they did not require financial assistance. For instance, one bank received 30 billion pesos for uncollectable debts that had accumulated over several years. This pattern was repeated across multiple institutions.
- Lack of Transparency: The bank rescue was not conducted transparently, with illegal benefits bestowed upon specific bankers while ignoring the plight of smaller debtors. Consequently, PRD legislators voted against the Fobaproa.
Zedillo’s Warning and Its Relevance Today
Former President Zedillo’s warning about Mexico’s potential descent into tyranny holds merit. Successive reforms have consolidated presidential power at the expense of other branches of government.
Erosion of Judicial Autonomy
Once newly elected judiciary members assume their positions, the autonomy of Mexico’s judicial branch will be a relic of the past. The upcoming election on June 1st is a ploy, with winning candidates preselected, as evidenced by the appointment of three leading candidates for ministerial positions by President López Obrador.
Consolidation of Power Under Current Administration
Under President Sheinbaum’s leadership, the executive branch maintains control over legislators from Morena, enabling constitutional amendments at her discretion. Post-judiciary election, there will be no checks on her authority. Opposition parties are weaker than ever, governors outside of the seven opposition states are subservient to the president, the private sector will only resist when their interests are threatened, civil society is marginalized, and the citizenry remains largely excluded from political life.
Key Questions and Answers
- What was the role of the former congressman during the Fobaproa implementation? The former congressman, serving from 1997 to 2000 as a PRD deputy, advocated for a balanced bank rescue plan that protected savers and medium/small borrowers, ultimately voting against the Fobaproa due to its perceived favoritism towards bankers and large debtors.
- Why did the former congressman disagree with Fobaproa? The former congressman contended that the Fobaproa did not adequately address the concerns of medium and small borrowers, instead primarily benefiting bankers and investors. He also criticized the lack of transparency in fund distribution and the government’s refusal to consider smaller debtors’ interests.
- What does former President Zedillo’s warning signify in today’s political climate? Zedillo’s warning about the risk of tyranny resonates as successive reforms have centralized presidential power, eroding the autonomy of other government branches. This concentration of authority is exemplified by the weakened opposition, subservient governors, and marginalized civil society under the current administration.
