Origins of the Mexican Council of Businessmen – Blog #2
Mexico City – Un saludo desde México. There are a host of problems in Latin America, ranging from governance and democracy to market functionality and development. However, one statistic best captures the essence of the problem. According to the United Nations Development Programme (UNDP), 80% of Latin American leaders overwhelmingly say that private (de facto) economic groups exercise too much power in Latin America, which “limits the capacity of governments to respond to the demands of their citizens.” In other words, there is a crisis of governability provoked by the concentration of wealth and power in the hands of the few. Where transparency and accountability do not exist, impunity reigns and de facto powers fill the void. In Mexico, for example, The Global Integrity Report ranks anti-corruption measures and the rule of law as very weak. In order to understand why and how Mexico suffers in these and other similar categories – in other words, the crisis of governability – I have followed the logic of the UNDP and others in an attempt to track the origins (origin?) of Mexico’s de facto powers.
Mexico’s most influential group of business leaders, the Consejo Mexicano de Hombes de Negocio (Mexican Council of Businessmen, CMHN) originated in 1962 during the peak of the Institutional Revolutionary Party’s (P.R.I.) 71-year reign over Mexican politics and government. Unlike the country’s many cámaras, or business associations, which were originally encouraged by the Mexican government during the country’s post-revolutionary political and economic consolidation of the 1920s to promote broad economic and industrial growth, the CMHN was founded four decades later, initially as an informal mouthpiece for Mexico’s economic élite. However, the organization, comprised of the upper crust of Mexico’s richest and most successful families, soon found its legs as a powerful albeit nearly invisible political and economic broker largely credited with shaping and promoting the P.R.I.’s centralized, undemocratic, and corporativist stranglehold on the Mexican presidency. Throughout the years, the CMHN has consistently promoted and financed the country’s political and economic consolidation in the hands of an oligarchy, tending toward centralized power and economic monopoly versus a legitimate democracy and the free market. However, the CMHN has historically encouraged the Mexican government and businesses to seek international financing for economic stability and expansion, willing to encourage foreign investment as long as the Mexican élite continues to control the country’s government and economy.
Since its inception, the CMHN evolved from its informal roots to become an organized, conservative, and influential power behind the scenes of the Mexican government, though it later created the subservient Business Coordinating Council (CCE) to relate with other business and political sectors. The organization rarely participated in or consulted with other business associations, preferring to meet with and influence the president and heads of state directly. Following a period of particular tension during the presidencies of Luis Echevarría Álvarez (1970-76) and José López Portillo (1976-82), when the government invested public capital and nationalized certain industries, the CMHN achieved a permanent consultative status with Mexican presidents in the 1980s, particularly Carlos Salinas de Gortari (1988-94), who used neoliberal privatization schemes to clearly benefit Mexico’s ruling élite. The CMHN habitually dealt exclusively with the Mexican president until 1994, ignoring other important actors such as the Mexican congress and judiciary. As the P.R.I.’s power began to decline, the CMHN sought to influence and impose upon the national leadership of the conservative National Action Party (P.A.N.) and ultimately deal directly with presidents Vicente Fox de Quesada (2000-06) and Felipe Calderón Hinojosa (2006-12).
The CMHN was founded on September 13, 1962, by 12 business leaders led by Bruno Pagliai, a wealthy Italian-American iron industrialist and close confidant of former president Miguel Alemán Valdés (1946-52). The group’s other founders included, among others, Jorge Larrea, President of Construcciones Jorge Larrea; Agustín Legorreta, Director of the Banco Nacional de México; Rómulo O’Farril, Chairman of the Board of Televisa; Bernardo Quintana, President of Ingenieros Civiles Asociados (ICA); and Juan Sánchez Navarro, Director of Cervecería Modelo. In the decade following its inception, the CMHN incorporated 15 more members, including Prudencio López, president of Gases Mexicanos, and Rolando Vega, director of Banco de Industria y Comercio. These particular families and their businesses are still intimately connected today. Could it be that the origins of Mexico’s de facto powers lie with the CMHN? Hasta la próxima vez . . .
Ben Cokelet
MA Candidate, NYU International Business & Politics
