Revolt in Oaxaca May Force Calderon to Wage an Income-Gap Fight

By Patrick Harrington
Nov. 3

Mexico's next president, Felipe Calderon, will inherit an old battle over wealth and poverty that may force him to spend more on the country's southern poor than he had anticipated.

A five-month revolt by thousands of teachers and free-trade opponents in Oaxaca state is a replay of conflicts between the central government and the poor that have erupted several times since the 1980s. The protesters' demands range from the resignation of the state governor and imposition of a socialist system to better pay for farmers.

President Vicente Fox sent more than 4,500 federal police into Oaxaca City Oct. 29 to restore order. The rebellion will ensure that Calderon, who takes office Dec. 1, spends more money on narrowing the income gap between Mexico's North and South, said Jorge Chabat, a political science professor at the Center for Economic Research and Teaching in Mexico City.

``The challenge for Calderon is not just in Oaxaca but in all of Mexico's southern states, where there is very little distribution of wealth and inequality is much greater than in the North,'' Chabat said. ``The federal government is going to have to intervene if they don't want to see movements like the one in Oaxaca in several states.''

Mexico's South, where most of the country's indigenous population scratches out a living by farming, has fallen behind the more industrial North, which has prospered because of free- trade accords and its proximity to the U.S., said Juan Lindau, a political scientist at Colorado College in Colorado Springs.

Poorest States

Mexico's three poorest states -- Oaxaca, Chiapas and Guerrero -- are in the South. Incomes in the three states are about half the Mexican average, according to a 2003 World Bank report. Oaxaca has 3.4 percent of Mexico's population and 1.4 percent of gross domestic product, according to government figures.

The revolt, which broke out in May and closed schools and businesses, has further damaged the local economy by discouraging tourists from visiting beaches and ancient ruins.

Businesses and hotels in Oaxaca City, tucked in the mountains about 468 kilometers (290 miles) south of Mexico City, lost about $371 million in revenue from May through mid-October, said Eduardo Garcia Moreno, president of the state chamber of commerce. Hotel occupancy is less than 20 percent, and more than 200 businesses near the city's center -- many of them covered in graffiti -- have closed, he said.

``We are very demoralized,'' Garcia Moreno said.

The social unrest dates back to the 1850s, when federal troops loyal to Governor Benito Juarez burned the city of Juchitan and killed the leader of a miners' revolt.

Marxist Guerillas

In 1983, President Miguel de la Madrid dispatched the army to Juchitan to remove a socialist mayor elected in 1981. The action sparked violent clashes with supporters of the mayor's student-farmer party.

In 1996, as many as 80 members of a Marxist guerilla group, the Popular Revolutionary Army, attacked government offices in the Oaxaca beach resort of Huatulco, killing about 10 people. President Ernesto Zedillo increased military patrols and boosted anti-poverty spending.

The government is incapable of handling today's revolt, said John Womack, a Latin America history and economics professor at Harvard University in Cambridge, Massachusetts.

``They've all got a big mess on their hands and they don't even know how to describe it, let alone fix it,'' Womack said.

Teachers' Strike

After Calderon won the presidency by the narrowest margin in history on the strength of support from the North, he vowed to make fighting poverty his top priority. On Oct. 17, Agustin Carstens, head of Calderon's economic transition team, vowed to reduce poverty by attracting investment rather than through spending or cash handouts.

What began as a teachers' strike for higher pay evolved into a broader social movement on June 14, said Flavio Sosa, 41, a leader of the umbrella group known as the Popular Assembly of the People of Oaxaca, or APPO.

When word spread that police were moving in to remove teachers from Oaxaca's city center, townspeople and members of an array of social groups rushed to support them, Sosa said.

After the alliance expelled the police, members blocked access to the main square by moving buses into the street and setting them on fire. Later, protesters lit tires and trash and put up barricades of sandbags, sheet metal and barbed wire.

Protesters built a tent city in Oaxaca and camped in front of the Senate building in Mexico City. When Fox sent in federal police, protest leaders opted to pull back to regroup elsewhere.

Sosa said APPO wants to draw attention to the state's extreme poverty and force the state governor, Ulises Ruiz, to leave office. On Nov. 1, Ruiz rejected a resolution passed by Congress calling for him to resign.

APPO is prepared to govern Oaxaca by itself should the federal government fail to resolve the conflict, Sosa said.

``If we put that plan in motion, no one is going to be able to stop it,'' said Sosa. ``If we form our own popular government, it will be irreversible.''

To contact the reporters on this story: Patrick Harrington in Mexico City at pharrington8@bloomberg.net