Truths

A little over one hundred years ago, journalist and historian Francisco Bulnes published his famous book “The Great Lies of Our History”, in which he demystified the life and deeds of Santa Anna. If it were urgent in that era to decode lies, today our shortfall involves truths. Felipe González, ex-President of the Government of Spain, said not long ago that Mexicans appear to be afraid of the truth, and that this fear translates into irresponsibility, and that this is perhaps the main source of our paralysis today. When the truths are not dealt with, candidates promise the moon and the stars, and no one can make them comply because everyone knows from the beginning that it is no more than a game. The problem is that this game is costing us the viability of the country.
It comes as a surprise to no one that we are confronting enormous problems. This is not unusual in the lives of people or nations. What is unusual is the absolute disinclination, not only to confront and resolve these, but even to discuss them. The problems are not discussed, but rather, are eluded because to confront them is politically incorrect. This leads to the proposal and discussion of law initiatives that are not prone to attacking problems at the root, to presenting proposals adjusted to what the legislative power can tolerate and not what is required, or, simply, that evade the relevant themes. This accomplishes nothing more than nurture the circles of distrust that characterize the relationship between politicians and citizens, and even worse, it lays the foundations of cynicism, which is the first cousin of the pessimism that dominates Mexican society these days.
The dilemmas, injustices, and challenges that plague the country cannot be ignored. What follows here is a brief enumeration of some of the most obvious.
•    The oil is running out. It is true that the traditional oil wells can be exploited with better technologies, but oil as a source of financing the public deficit and all of the dreams of our politicians and, therefore, as a mechanism of evading reality, is coming to an end. Despite this, in recent years a new corporate regime for the national oil company Pemex was approved and it was decided to build a new refinery, neither of which is appropriate in view of the current reality. Instead of recognizing the fiscal reality of the country and providing the company with a functional and rational system of internal governance that is appropriate for a rapidly changing company and industry, time goes by without anything happening. Just pipe dreams.
•    The flip side of the oil theme is the fiscal matter. The financing structure of public expenditure is very poor, evasion is massive, the bureaucracy charged with tax collection is impenetrable, and, to top it all off, the system promotes tax evasion and provides incentives for permanent growth of the informal economy.
•    The informal economy is the sole sector with non-stop growth but, paradoxically, it is also the only sector of the economy that has absolute limits to its growth. There are more and more Mexicans involved in the informal economy (some calculate that it comprises up to two thirds of the economically active population) and it represents between one third and one half of the total economy. The problem with the informal economy is that the enterprises of this netherworld cannot reach a sufficient scale to prosper because they do not want to attract the attention of labor and fiscal authorities, but principally, because they have no access to credit, without which growth is impossible. The existence of the informal economy is the best proof of the erroneousness of our labor and fiscal policies.
•    Labor legislation was designed to satisfy the big unions and to guarantee the system of a generous trade-off of benefits for union leaders in exchange for the political control provided for the system by these kingpins. This labor regimen met the political needs eighty years ago, but has, at present, become a burden for the country’s development. What is needed is flexibility, the capacity to create and destroy businesses, transfer tangible assets, and generate jobs that are appropriate to a service economy such as that of the XXI century, totally distinct from that of the basic industry of the last century’s thirties. Union opposition to any change is explicable, but the sacrifice of the remaining 95% of the population is somewhat costly… It is impossible to construct a modern nation while four or five unions extort the government.
•    In the matter of taxes, the starting point is mistrust: the authorities do not trust the citizenry; thus, they have elaborated a maze of requirements, procedures, reports, and payments that only an army of accountants can satisfy. The result is a tremendous bias in collection that, in fact, promotes tax evasion. In the labor terrain, a modern country that aspires to success in leading-edge activities and sectors of economic development cannot function without a tax collection system that simplifies and facilitates compliance with fiscal obligations, but, above all, one that derives from co-responsibility and trust.  The fiscal bureaucracy is as much to blame for poor tax collection as are, as well, the tax evaders, who do nothing more than take advantage of the system.
•    The judicial system is another of our blights. In the executive quarter, the attorney general’s prosecutors (ministerio publico) are an embarrassment: their incompetence calls for a full redefinition due to their corruption or mere incapacity. On the judicial side, the Supreme Court, although timid in assuming its constitutional character, has become a central pillar of the governability of the country. However, the entire tribunal system is in incompliance with its core objective: they spend wagonloads of money, but justice does not materialize. It is not that everything is corruption, but that everything is designed for nothing to work.
We possess an extraordinary predilection for ferreting out the guilty parties instead of finding solutions, or even elucidating the nature of the problems. One cannot pretend that the economy works while fiefs, privileges, and preserves of power prevail. A competitive environment cannot be created from one that excludes, before it starts, key sectors of the economy such as oil, electricity, and communications. Those interests may be very powerful, but as long as these topics are not discussed in public, it is impossible to begin to defeat the former, and reticence to do so winds up being an accomplice. We must call things by their name, and Mexico is experiencing a profound fear of facing the key issues that paralyze us. “The nation that does not love the truth”, said Machiavelli, “is the natura6 l slave of all of the evildoers”.