Carlos Salinas de Gortari

Carlos Salinas walks through the gardens of the Moncloa Palace with Felipe González in 1989.

Salinas assumed the presidency on 1 December 1988 at the Legislative Palace of San Lázaro. There he took oath before the Congress of the Union. As the declared winner of a highly contested election, he had the task of restoring his own legitimacy and that of his party when he took office.[34] The election had shown that much of the public desired reform, but Salinas appointed PRI hard-liners ("dinosaurs") to his cabinet, including Fernando Gutiérrez Barrios to the Ministry of the Interior; Manuel Bartlett to the Ministry of Education; and Carlos Hank González to Agriculture.[35] The cabinet was cohesive in support of Salinas's neoliberal policies. Many ministers were technocrats with graduate academic degrees, a profile similar to Salinas's. Although there was opposition to many of Salinas's policies, it came from outside the cabinet.[36][37] Over the course of his presidency, he moved or replaced a number of cabinet ministers. A key replacement in January 1994 immediately after the Chiapas conflict was at the Ministry of the Interior (Gobernación), appointing Jorge Carpizo, who had been head of the government National Human Rights Commission and previously was rector of the National Autonomous University of Mexico. When the PRI candidate in the 1994 elections, Luis Donaldo Colosio was assassinated in March 1994, new restrictions barring cabinet ministers who had not resigned in the six months previous to the election date from being candidates for the presidency meant that Salinas had a small pool of eligible choices.

In his inaugural address in December 1988, he outlined an ambitious and important goal of "modernizing" Mexico."[38] He contended that "The modernization of Mexico is essential if we are to meet the demands of the 85 million Mexicans of today.... In brief, we need to modernize politics, the economy, and society. The modernization of Mexico is, moreover, an absolute imperative. This is the only way we will be able to affirm our sovereignty in a world undergoing profound transformation."[7]

During his six-year term in office (sexenio) major changes were made to the Constitution of 1917 that affected political reform; church-state relations, ending many aspects of anticlericalism restricting the Catholic Church and other religious organizations; agrarian reform, ending redistribution of land under Article 27; and policy changes on "indigenous peoples, human rights, economic activities of the state, [and] criminal due process."[7]

Immediately upon his inauguration, he arrested prominent union leaders, many of whom were his opponents in the PRI, among other measures to demonstrate his determination to set his own course. His government privatized state-run companies, including Teléfonos de México, sold to PRI-insider Carlos Slim, as well as re-privatizing banks that President José López Portillo had nationalized at the end of his term. The funds from these sales of state assets helped pay off Mexico's internal debt. However, there were also bailouts for banks and the Mexican toll roads that became scandals.[39]

Salinas continued with the neoliberal economic policy of his predecessor Miguel de la Madrid and converted Mexico into a regulatory state.[40] During his presidential term, he aggressively privatized hundreds of state-run companies, including telecommunications, steel, and mining. The banking system (that had been nationalized by José López Portillo) was privatized.[6][41]

His National Development Plan (Plan Nacional de Desarrollo) published in 1989 had 4 objectives:

1. Protecting sovereignty
2. Democracy
3. Economic recovery
4. Improving the living standard.[42]

By the end of his term, inflation had been reduced to 7% in 1994, the lowest figure in 22 years. Shortly after leaving office, due to the so-called December Mistake, inflation rose again to 51%.

During his term, the peso devalued from 2.65 MXP to 3.60 MXN per U.S. dollar by November 30, 1994, the last day of his term; thus the peso devalued far less than it had in the two previous terms. (The peso was later devalued from 4 per dollar to 7.2 in a single week due to the "December Mistake.")

Salinas established the National Solidarity Program (PRONASOL), a social welfare program, as a way to directly aid poor Mexicans, but also create a network of support for Salinas.[43] It was his first official act as president. The program channeled public funds, which the administration said came largely from privatization of state-owned companies, into impoverished areas to improve roads, the electrical grid, schools, and clinics in order to raise levels of education and health and link remote areas, with lack of oversight in its spending.[44][45] The program was similar to those in other countries to manage the disruption and political costs of macroeconomic adjustment. Salinas's Harvard doctoral dissertation had examined the relationship between social programs and political support for the government. Given the Salinas's questionable legitimacy as the winner of the 1988 election, PRONASOL was seen as a way for Salinas to deliver immediate benefits to the poor and avert their turning to other political parties or worse. It did not prioritize funding for Mexico's poorest states, but rather to states with middle-income populations where elections were most contested and where the PRI had lost. Politically, the program sought to undermine the appeal of leftists, especially Cuauhtémoc Cárdenas.[46] In Chiapas, PRONASOL channeled increased funds in 1993 and 1994, but it did not prevent the Zapatista uprising, which showed that the program had only a limited impact.[47][48]

The Catholic Church and the Mexican government has had a historically fraught relationship, with restrictions on the church's role in national life. In the 1980s, the church saw electoral participation reform and fighting electoral fraud as an issue. Sometime during the presidential campaign, the PRI had indicated to the Church that a Salinas victory would be beneficial to the Church. It has been considered a quid pro quo agreement.[49] A delegation of the leadership of the episcopal hierarchy attended the inauguration of Salinas on December 1, 1988.[50] After the 1988 election the Mexican bishops did not make public statements about the election results. Behind the scenes the apostolic delegate to Mexico, the Vatican's representative, Mexican bishops, and government officials had a series of secret meetings that hammered out the outlines of a new Church-State relationship. In his inaugural address, Salinas de Gortari announced a program to "modernize" Mexico via structural transformation. "The modern state is a state which ... maintains transparency and updates its relation with political parties, entrepreneurial groups, and the church."[38] His declaration was more an articulation of the direction of change, but not list of specifics.

The implementation of reforms entailed amending the 1917 constitution, but before that overcoming opposition on the Left but also in the Catholic Church itself.[51] After considerable debate, the Mexican legislature voted for fundamental revisions in Church-State policy.[7][52]

In the wake of the highly controversial 1988 election results, the government initiated a series of electoral reforms. A major change was the creation of the Federal Electoral Institute (IFE) in October 1990, taking elections out of the hands of the Ministry of the Interior to create an independent entity.

The 1994 elections were the first to have international observers, and were considered, at that time, the fairest elections in the century, although not free of controversy.[53] For the first time, the PRI lost its two-thirds majority in Congress, which is necessary to conduct constitutional reforms.[54]

In 1990, the National Human Rights Commission (Comisión Nacional de los Derechos Humanos) was created.[42] Initially a government agency, it became a separate entity,

In 1992, Salinas and his Secretary of Education, Ernesto Zedillo introduced new compulsory history texts in Mexican schools, part of the Mexican Free-Textbook Program. Authored by Enrique Florescano and Héctor Aguilar Camín, the new textbooks set off a storm of controversy. Shifts in emphasis concerned the Porfiriato and the role of foreign investment, Emiliano Zapata, lauding him as a hero despite his having opposed every government in power; U.S.-Mexico relations, avoiding negative treatment of the history; and the Catholic Church in Mexico, treating it dispassionately. The government was compelled to withdraw them in January 1993. According to one assessment, "While the 1992 textbook controversy disclosed new support for the regime from the right, it also revealed an erosion of support and discipline within officialdom."[55]

Carlos Salinas (left), George H. W. Bush, and Brian Mulroney during the NAFTA Initialing Ceremony in Austin, Texas.

NAFTA logo

The centerpiece of Salinas's presidency was his successful negotiation with the U.S. and Canada to create the North American Free Trade Agreement (NAFTA), which came into effect on 1 January 1994. The agreement was a reversal of Mexico's longstanding policies of economic nationalism and anti-Americanism and was intended to create a single market. Mexican proponents of NAFTA saw it in a way to secure markets for its exports and attract foreign investment, and create jobs, help the government to be able to service its foreign debt, and overall, promote economic recovery. In Mexico, the reversal was controversial, opposed by organized labor, many academics, and nongovernmental organizations.[56]

An issue of importance both domestic and foreign policy is drug trafficking. In the 1980s and early 1990s, Mexico was a transit country for cocaine produced in Colombia and destined for consumers in the United States. President De la Madrid considered drug trafficking a national security issue and devoted government funding to it. Salinas expanded this funding, but neither president stemmed the growth of trafficking and its impact on Mexico. Drug trafficking is highly lucrative for those involved with it, and Mexico's weak law enforcement and judicial system could not prevent the wide-scale involvement of Mexico's poorly-paid police from being corrupted. The Mexican military to a lesser extent was corrupted, along with politicians, and some journalists. Such corruption undermined the possibility of rule of law and it prevented Mexicans from having trust in the state. A rising level of violence by drug traffickers against the state, witnesses, journalists, and bystanders.[57] The Mexican government did capture and jail some high-level drug mafia leaders, including Miguel Ángel Félix Gallardo in 1989, whose arrest made visible the extent of law enforcement collusion.[58]

Salinas negotiated the North American Free Trade Agreement (NAFTA), with the United States and Canada. Salinas also renegotiated Mexico's foreign debt. In 1990, Salinas had traveled to Europe to attract non-North American capital investment, but dissolution of the Soviet Union and the Soviet bloc opened them to foreign investment; Mexico was less attractive to them and Salinas turned to North America.[59] Critics say that NAFTA has had mixed results for Mexico: while there has been huge increase in commerce and foreign investment, this has not been at all the case for employment and salaries.[5]

In 1992, Mexico hosted the Chapultepec Peace Accords, a venue where the parties in the civil war in El Salvador signed an accord ending the long conflict.[60]

Mexico reestablished diplomatic relations with the Vatican. Moreover, Mexico became member of the Asia-Pacific Economic Cooperation (APEC) and the Organisation for Economic Co-operation and Development (OECD). The First Ibero-American Summit was held and the Chapultepec Peace Accords, a peace agreement for El Salvador, were signed.[61]

Salinas in 1991 visited United States to help convince the Illinois Governor, James R. Thompson to pardon four Mexican citizens from a quadruple murder known as the Milwaukee Ave Massacre, that took place in 1981 in Chicago, Illinois. With the help of Carlos Salinas de Gortari the four men, Joaquin Varela, Rogelio Arroyo, Ignacio Varela, and Isauro Sanchez, had their sentences commuted, later pardoned by Governor Jim Edgar.

The "unveiling" of the PRI candidate for the presidency was on 28 November 1993, with Salinas choosing Luis Donaldo Colosio. Those considered for the position were Manuel Camacho and Colosio, with earlier contenders, such as Jesús Silva Herzog and Pedro Aspe being eliminated. Aspe, a graduate of MIT had a high international profile, but was considered unlikely to actually attract voters. The changed circumstances of the Mexican political system, as demonstrated by Salinas's own election to the presidency, meant that being designated the PRI did not guarantee election. Aspe was not a charismatic prospect as a candidate who could energize and charm voters. With the potential that Cuauhtémoc Cárdenas was likely to run again for the presidency, the PRI needed to field someone who could garner votes.[64]

Flag of the Zapatista Army of National Liberation (EZLN)

The uprising in Chiapas on 1 January 1994 coincided with the date that the NAFTA came into effect. The Zapatista Army of National Liberation (Ejército Zapatista de Liberación Nacional, EZLN) issued their first declaration from the state of Chiapas in southern Mexico. Salinas's immediate response was to find for a peaceful solution: offering pardon to deposed arms; ordering a cease fire; appointing a peace negotiator, and sending Mexican Congress a General Amnesty Law. Salinas's presidential successor took a harder line when he was inaugurated. But Salinas's more peaceful solution to the Zapatista uprising was legal and politically pragmatic, likely saving many lives in Mexico.[65][66][67] The Zapatista rebellion spread regionally, but not nationwide, but the fact that it happened and that international attention was drawn to this poor region of Mexico just as NAFTA was implemented meant that Salinas's careful plans for a peaceful political transition with his legacy intact were obliterated.[68] Salinas appointed Manuel Camacho, Minister of Foreign Affairs, as the government's peace mediator. For Salinas, this had political benefits, since Camacho, having been passed over as the PRI presidential candidate, could have bolted from the party. With this important appointment, he was in the public limelight again.[69]

Bust of Colosio at Los Pinos

A spectacular political event of 1994 was the assassination of Salinas's handpicked PRI presidential candidate Luis Donaldo Colosio in March 1994, upending the already complex electoral situation with elections scheduled for August 1994. The Zapatista uprising had ruined Salinas's plans for a peaceful transition of Mexico in the elections. There is evidence that Salinas and Colosio began to disagree, not unusual after the electoral transfer, but this occurred prior to it. His campaign languished with lack of funding, Colosio had problems getting media coverage, given the high-profile events in Chiapas. Salinas prevented Colosio from going to Chiapas, while the explanation that his presence there would complicate the situation. Increasingly there was the impression that Salinas would reverse his decision for Colosio, substituting someone else, perhaps Manuel Camacho. Camacho was a politically savvy former Minister of Foreign Affairs, Head of Government of Mexico City as well as Peace Commissioner in Chiapas. Salinas made a public statement on 17 January 1994, affirming his choice as candidate, but this was at the insistence of Colosio. Salinas extracted a pledge from Camacho that he had no designs on the presidency, which he renounced the day before Colosio's assassination in Tijuana 23 March 1994.[70] After a few days of weighing his options, Salinas chose Colosio's campaign manager, Ernesto Zedillo, former Minister of Education, as the new PRI candidate for the presidency. Zedillo had been Secretary of Education, a relatively unimportant ministry; he had resigned to run the campaign of Colosio. Zedillo had never held elective office, sharing that trait with De la Madrid and Salinas, but Zedillo was not otherwise experienced politically. He was perceived as a weak candidate. There are speculation that Salinas wished to perpetuate his power as Plutarco Elías Calles had in the wake of the 1928 assassination of president-elect Alvaro Obregón, controlling successor presidents.[71]

After considering whether to postpone the general election scheduled for 21 August 1994, Salinas chose Zedillo to run as the PRI candidate for the presidency and the elections took place as scheduled. Voters came out in large numbers to choose between three main candidates, Zedillo for the PRI, Cárdenas for the Party of Democratic Revolution, and Diego Fernández de Cevallos for the PAN. Zedillo won a clear victory, in what were considered by foreign observers as free and fair. In results published by the Federal Electoral Institute (IFE), Zedillo got 48.7%, Cevallos 25.9%, and Cárdenas 16.6%.[72]

Following the election in September 1994, Secretary General of the PRI José Francisco Ruiz Massieu, Salinas' former brother-in-law, was assassinated in downtown Mexico City in broad daylight. The murder was not solved during Salinas's presidency, even when Mario Ruiz Massieu (Francisco's brother) was the attorney general and in charge of the investigation.

The economic bubble gave Mexico a prosperity not seen in a generation. This period of rapid growth coupled with low inflation prompted some political thinkers and the media to state that Mexico was on the verge of becoming a "First World nation". In fact, it was the first of the "newly industrialized nations" to be admitted into the Organisation for Economic Co-operation and Development (OECD) in May 1994. It was known that the peso was overvalued, but the extent of the Mexican economy's vulnerability was either not well known or downplayed by both the Salinas administration and the media. This vulnerability was further aggravated by several unexpected events and macroeconomic mistakes made in the last year of his administration.

Several economists and historians have analyzed some of the events and policy mistakes that precipitated the crisis of December 1994.[73] In keeping with the PRI election-year practices, Salinas launched a spending spree to finance popular projects, which translated into a historically high deficit. This budget deficit was coupled with a current account deficit, fueled by excessive consumer spending as allowed by the overvalued peso. In order to finance this deficit, the Salinas administration issued tesobonos, an attractive debt instrument that insured payment in dollars instead of pesos.

Increasing current account deficit fostered by government spending, caused alarm among Mexican and foreign T-bill (tesobono) investors, who sold them rapidly, thereby depleting the already-low central bank reserves (which eventually hit a record low of $9 billion). The economically orthodox thing to do, in order to maintain the fixed exchange rate (at 3.3 pesos per dollar, within a variation band), would have been to sharply increase interest rates by allowing the monetary base to shrink, as dollars were being withdrawn from the reserves.[74] Given the fact that it was an election year, whose outcome might have changed as a result of a pre-election-day economic downturn, the Bank of Mexico decided to buy Mexican Treasury Securities in order to maintain the monetary base, and thus prevent the interest rates from rising. This, in turn, caused an even more dramatic decline in the dollar reserves. These decisions aggravated the already delicate situation, to a point at which a crisis became inevitable and devaluation was only one of many necessary adjustments.

Soon after taking office, Zedillo announced that his government would let the fixed exchange rate band increase 15 percent (up to 4 pesos per US$), by stopping the unorthodox measures employed by the previous administration to keep it at the previous fixed level (e.g., by selling dollars, assuming debt, and so on). This measure, however, was not enough, and the government was unable to hold this line, and decided to let the exchange rate float. While experts agree that devaluation was necessary, some critics of Zedillo's 22-day-old administration argue that, although economically coherent, the way the crisis was handled was a political mistake. By having announced its plans for devaluation, they argue that many foreigners withdrew their investments, thus aggravating the effects. Whether the effects were aggravated further or not, the result was that the peso crashed under a floating regime from four pesos to the dollar (with the previous increase of 15%) to 7.2 to the dollar in the space of a week.

Mexican businesses with debts to be paid in dollars, or that relied on supplies bought from the United States, suffered an immediate hit, with mass industrial lay-offs and several suicides.[75] To make matters worse, the devaluation announcement was made mid-week, on a Wednesday, and for the remainder of the week foreign investors fled the Mexican market without any government action to prevent or discourage the flight until the following Monday, when it was too late.

Salinas faced widespread criticism in Mexico. He was widely blamed for the collapse of the economy and his privatization of several government-run businesses such as Telmex. With respect to the collapse of the economy, he rapidly responded by blaming Zedillo's "inept" handling of the situation, coining the term "December mistake" to refer to the crisis and Zedillo's mistakes. He then argued that he had talked to Zedillo of a possibility of "sharing the burden" of the devaluation by allowing the peso to devaluate a certain percent before his term was over, and the rest of the necessary devaluation would have been done during Zedillo's administration.

Initially the Zedillo administration followed Salinas's policies regarding the negotiations with the Zapatistas, pledging to reach a peaceful resolution to the Chiapas crisis. Zedillo then reversed course and on February 9, 1995, identifying Subcomandante Marcos to be Rafael Sebastián Guillén Vicente, and pursued military intervention. He abandoned that unsuccessful strategy and peace talks were subsequently re-established. Zedillo's zigzag policies in Chiapas were consistent with some others of his administration.[76]

Ernesto Zedillo had been an accidental presidential candidate who had no political experience or independent base of power. There was a perception that Salinas wanted to follow the precedent of Plutarco Elías Calles who wielded tremendous power over three successor presidents following the 1928 assassination of president-elect Alvaro Obregón.[77] However, this changed when by order of president Zedillo[78] Salinas's older brother Raúl Salinas was arrested on 28 February 1995 under charges of orchestrating the assassination of Ruiz Massieu; the arrest dramatically shifted the political situation. Since 1940 when president Lázaro Cárdenas left the presidency and turned power over to his successor, Mexican former presidents had not directly intervened in politics. After the arrest of his brother, Salinas went on television, expressing his outrage at Zedillo. In the broadcast he placed the blame for the December peso crisis on Zedillo, resulting in the loss of Mexican jobs, bankruptcies, and the tarnishing of Mexico's image.[79]

Salinas abandoned his campaign—which had been backed by the United States—to become the Director-General of the World Trade Organization and left Mexico City, going to Monterrey where he staged a publicized hunger strike in the home of a PRI supporter. Arturo Warman, Minister of Agrarian Reform, was sent to Monterrey to persuade Salinas to return to Mexico City. Salinas demanded that the government issue a statement clearing him of responsibility for the Colosio case and the December 20 devaluation. Salinas returned to Mexico City and he and Zedillo met. Zedillo's government issued a statement absolving Salinas of the Colosio murder and tempered his criticism of Salinas in the peso crisis.[80] Salinas left Mexico for self-imposed exile and settled in Ireland for a period.

•  Spain:
  • Knight of the Collar of the Order of Isabella the Catholic (1990)[95]
•  Malaysia:
  • Honorary Recipient of the Order of the Crown of the Realm (1991)[96]
•  Uruguay
  • Medal of the Oriental Republic of Uruguay (1993)[97]