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The Political Economy of Mexican Oil.

The Political Economy of Mexican Oil The energy crisis of 1973-80, in one of its more fortunate consequences, sparked interest in the study of oil in many parts of the world, including Latin America. The English-language literature on oil in Latin America, scarce before 1973, has steadily increased, and now receives as another welcome addition the second volume of Laura Randall's fifteen-year comparative project on the political economies of oil in Venezuela, Mexico, and Brazil. The Venezuelan volume was published in 1987, and the Brazilian manuscript should appear in print in a few years.

The largest number of scholarly publications in English and Spanish have focused on Mexico, but Randall has no difficulty making a valuable contribution because the state-owned oil monopoly PEMEX "is increasingly open to researchers who wish to learn about its operations" (p. 34). Randall conducted unattributed interviews with oil industry employees who "request that they not be identified by name for specific information" (p. x), and the accounts, insights, and views derived from this source constitute the most valuable part of her study. Scholars, in particular historians, will devote long hours to ferret out and discover the many nuggets of precious information scattered throughout this book, fully aware that PEMEX's accessibility to researchers is much greater than that allowed by most private oil companies in the United States and Europe.

Through six chapter studies, Randall attempts to answer "the question of which citizens have received the greatest benefit from the nation's oil wealth" (p. 1). Chapter 2 explores the efficiency of PEMEX and chapter 3 the policies of prices and subsidies; the book's conclusions basically refer to whether PEMEX is doing a better or worse job than its Venezuelan of Brazilian state counterparts. Chapter 4 (the longest) is a book in itself, and describes the impact of PEMEX on the rise of Mexico's heavy industry and engineering firms. The clearly written chapter 5 on the oil workers' union is the best in the book, and chapters 6 and 7 provide very good discussions on the overall role of Mexico's oil in the national economy, international relations, and local regions; the discussion of the Tabasco region (pp. 145-56) is an excellent case study, of which there should have been more. By presenting national and regional case studies easily elaborated from the interviews, Randall would have enhanced the value and readability of this book.

Even repeated readings of this difficult book fail to reveal a clear link between the six separate chapters, which too often sound like thinly disguised feasibility studies. Randall had wonderful material with which to work, but she chose to present it in a dry, arid text, generously peppered with statistics. The supposedly central question of who benefited from the oil wealth is lost sight of for long stretches, only to resurface briefly in statements like "prices increasingly benefitted the powerful" (p. 46). The text presupposes an easy familiarity with the structure and geography (no map is provided) of Mexico's oil industry. The reader should know beforehand the location, types, and amount of crude reserves in Mexico, as well as the characteristics of the individual refineries, and should have a solid grasp of Mexican political and economic evolution in the last fifteen years. Only PEMEX officials with advanced degrees in economics from U.S. universities could really be comfortable with this book.

To have this book consulted more often, and to encourage prospective readers not fluent in Spanish, I would recommend first becoming thoroughly familiar with books like George W. Grayson's The Politics of Mexican Oil (1980) and Miguel S. Wionczek's publications available in English. The reader should begin The Political Economy of Mexican Oil with chapters 5 and 6, the clearest and also the only ones to provide a minimal historical framework. Those interested only in heavy industry will find chapter 4 sufficient, and those who are not can skip that chapter except for the excellent discussion on the Mexican Institute of Petroleum (pp. 91-99). By then the reader will know whether to proceed with chapters 2 and 3 or, more likely, to rush to the finish line at chapter 7.

Randall alludes in fleeting sentences to many fundamental issues, but she does not develop them in any extensive way; many reasons and implications exist behind the jump in oil revenues from 3 percent of government income in 1971 to 46 percent in 1986, but the discussion is only suggested (pp. 22, 28). Even more important is the always shocking statement "that Mexico may become an oil importer by the turn of the century" (p. 16); the whole book could have been structured around this fact, which also helps to explain why President Carlos Salinas de Gortari is eager to sign a free trade agreement with the United States.

The message that rings loud and clear throughout the book is Mexico's absolute need to have a state-owned national oil monopoly, most unwelcome news to those who in recent years preach the sale of state companies as the panacea to cure Mexico and Latin America's economic woes. Randall, a neoclassical economist who has carried out an impersonal and detached evaluation of PEMEX without a trace of Marxism, or even of its distant cousin dependency theory, has repeatedly given PEMEX a clean bill of health, with the possible exception of how far the oil firm's monopoly rights over the basic chemicals should extend. Other scholars using different approaches have for decades reached the same explicit conclusion, but it is reassuring to have an implicit confirmation from neoclassical economics.

Rene De La Pedraja is assistant professor of history at Canisius College in Buffalo, New York. He has published extensively in English and Spanish on the economic and business history of Latin America. His latest work is Energy Politics in Colombia (1989). At present, he is working on a history of steamship companies in the United States and in Latin America.
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Author:De La Pedraja, Rene
Publication:Business History Review
Article Type:Book Review
Date:Jun 22, 1990
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