Tuesday, April 30, 2013

Real gringo hero


Thirty-three years ago Carlos Arredondo came to terms with the hopelessness of finding meaningful employment in his native Costa Rica and joined the wave of undocumented migrants making their way to the USA in search of a better life.  Today he is one of the heroes of Boston. 

Two weeks ago, Carlos attended the Boston Marathon. He was there to cheer on the “Tough Rucks”, a group from the National Guard that "runs" the race in combat uniform and combat boots. Their loaded rucksacks feature a yellow ribbon with the name of a comrade killed in Iraq or Afghanistan or lost to suicide and PTSD-related accidents.   One ribbon read “Alexander Arredondo,” Carlos' son.  

The “Tough Rucks” got an early start, leaving Hopkinton at 5:20 a.m.  They expected to arrive in Copley Square at 2:00 p.m. 

Carlos was near the finish line when the bombs exploded at 2:45. Instead of running away, Carlos ran into the fracas to help.  He put a tourniquet around Jeff Bauman's bleeding leg, found a wheelchair and lifted him into it. When the tourniquet didn't hold Carlos grabbed Jeff's femoral artery and pinched it shut. Aided by another volunteer he found an ambulance.  

Photos of Carlos wearing a Costa Rican cowboy hat, a “Tough Ruck” sweatshirt, and two photo-buttons have gone round the world.  Interviewed over a hundred times, articles about Carlos now number in the thousands.

I first met Carlos and his wife Mélida in August 2011 at the Veterans for Peace convention in Miami.  They’d set up a life-sized photo of son Alexander.  In front of the photo were his empty boots.  Alexander died in 2004 while serving in the U.S. Marines.  Two years later his brother Brian, driven to depression and drugs by Alexander's death, committed suicide. Carlos and Mélida have since dedicated their efforts to honor their sons’ deaths.  

As members of Veterans for Peace (VFP) they lobby to bring troops home. They also lobby that once home the soldiers receive medical, legal, and financial care and assistance as they reinsert themselves into civilian life.

Carlos and Mélida are also members of Boston's Samaritans Suicide Prevention Hotline, meeting with families to reduce the incidence of suicide. They have also provided guidance to the Marines on a more respectful protocol for notifying parents when a son or daughter has died in combat. 

George Bush signed the directive giving legal residency status to undocumented parents of military personnel killed in battle.  Carlos was the first to receive it.  Later Ted Kennedy gave him his U.S. citizenship certificate.

Carlos and Mélida attended the workshop I offered at the VFP convention and were especially interested in the soon to start Caravan for Peace led across the United States by Mexican Javier Sicilia.

When I said goodbye to them in Miami, Carlos unpinned two buttons from his shirt -- one with Alexander's photo, the other of Brian -- and gave them to me.  I overheard Mélida whisper, "those were the last buttons."  I said nothing, thinking it awkward to return them but clearly understanding the special-ness of the gift.

I marched in the Veterans for Peace contingent in Boston's Veterans Day parade last year wearing the buttons.  I was delighted to see Carlos and Mélida each wearing similar buttons.  They'd made more!

Last weekend I asked Carlos "what is it that you wish those hundred interviewers had asked you, but didn't?"  He replied, "They didn't ask about Costa Rica, why I came, and how I got here."

He spoke about Costa Rica's fame as a Latin American democracy where social disputes exist but are resolved peacefully. He is proud the country did away with its armed forces. Carlos expressed his hope for a Central America with open borders. 

Though he loves Costa Rica, Carlos left home in November 1979. He hitchhiked through Central America and slipped across the Mexican border near Tapachula.  He crossed the U.S. border near Douglas, Arizona on Valentines Day 1980.  He located in Los Angeles and then moved to Boston where he married and fathered two children, Alexander and Brian.  

He told me of a job he held in Costa Rica as a clown in the bullrings at cattle fairs.  Costa Rica's version of a bullfight is similar to Mexico's "jaripeos" -- the bull is not killed.  They have added a variation of Pamplona's running of the bulls with hundreds of spectators jumping into the ring and taunting the bull.  Carlos, dressed as an American football player with all the padding and protection that goes with a football uniform -- except for a helmet -- had the job of distracting the bull to get him away from injured bullrunners.  Prophetically he was known as "El Gringo". 

When the bombs exploded near the Boston Marathon finish line Carlos again jumped in to save the injured, but this time he was a real gringo. 

I read Carlos had visited Jeff Bauman in a Boston Hospital and given him a cowboy hat.  I feared he’d given away his signature hat, as he had given me his buttons.  “Oh no, my Costa Rican hat was too dirty and sweaty to give him.  I gave Jeff a U.S. cowboy hat!”

Tuesday, April 23, 2013

John Spencer wouldn't like this

John Edward Spencer and Lady Elizabeth Brown, his lovely “Boo,” arrived in Cuernavaca in 1967.  They were traveling the country with the book "Mexico on $5 a Day" tucked under John’s arm. He read that across the street from the Cathedral there were cheap furnished apartments for rent in a building called La Casona. To their delight not only was an apartment available, it was a second story corner apartment with windows on two walls and a view of the cathedral. “How grand!” John is reported to have said. "This will be my studio; we'll live here too." When the apartment next door became available they moved into it keeping the corner apartment as John's studio. 

Neither apartment had much of a kitchen.  I first met this wonderfully eccentric English couple on a visit with Cuernavaca author May Brooks.  Boo prepared our tea using only an electric hot plate. They walked everywhere -- to art exhibits, cultural events, museums, movie theaters, banks, the post office, restaurants, and friends' homes.   Those frequenting downtown Cuernavaca came to recognize them.  Elizabeth attended St. Michael’s, the tiny English-language Anglican church. John, a Catholic convert, attended Mass at the Cathedral.

Poised and elegant, Elizabeth dressed in dark colors with her hair in a tight bun. Though quite a bit older than John she walked with her back ramrod straight. John always wore a suit coat and tie. The coat rarely matched his trousers, his shirt collar was usually frayed, and his tie askew.  Following Boo, with hunched shoulders and his hands clasped behind his back, he seemed older than Elizabeth.

John was a multifaceted artist.  Hundreds of sketchbooks were filled with his drawings.  He painted on canvas and carved river-smoothed stones with a dentist’s drill.  He created large, intricate metal sculpture.  He loved reflections.  In drawings, in oils on canvas, or in metal sculpture, the top is often the inverse of the bottom. 

John’s largest project,  "Spencer's Walls," surrounds the churchyard of the Three Kings church in northern Cuernavaca.   John was asked by a Canadian priest if he would design gates for the 17th century church.  John replied. "How can I design gates without walls?"  Spencer's many gates are marvelous pieces of metal sculpture that are often overlooked because of the immense, intriguing, fantasy of the stone walls he created to hold the gates.  

After Lady Elizabeth's death in 1986, John was distraught.  Everything in Cuernavaca reminded him of her. He needed to get away. With his rent paid ahead for just shy of two years to keep his Mexican residency permit, he left for a trip to India and Pakistan. 

Upon returning to Cuernavaca, he saw a chilling sign over the doorway of La Casona-- "Se Vende" (for sale).  John realized if the building sold he’d lose his studio and his beloved view of the cathedral.  

The man who traveled with "Mexico on $5 a Day" under his arm bought the building.  In cash.  By then La Casona hosted sixty tenement-like apartments.  John dreamed of converting the building into an art museum and cultural center for Cuernavacans and their visitors. The garden in the courtyard would be the fourth public green space in downtown Cuernavaca -- others being Revolution Park, the Borda Gardens, and the Cathedral's atrium.  His dream was so convincing that only two renters demanded financial compensation for moving out. John removed the top floor and took the building back to what it had been in the 1920s. 

When Sally Sloan, the director of the nearby Brady Museum, asked him what his plans were for La Casona, John replied "I want it to be 'The Met' of Cuernavaca." 

I was invited to John’s last birthday party on April 25, 2004.  Addressing his guests, he told us his longterm plans for La Casona.  I had a small digital camera in my pocket and filmed what he told us (you can view it at http://youtu.be/OXLXwK6Tbew). In that short video John asked us to speak up if what he wanted for La Casona wasn't being carried out after his death by saying "John wouldn't like this.  This wouldn't do for him."  

Unfortunately that’s where we are today. I've spoken up a number of times and said "John wouldn't like this."  In February I even chained myself to the entryway of La Casona during the inauguration of the exhibit "Instruments of Torture and Capital Punishment."  It is hard for me to imagine an exhibit that goes more counter to gentle John’s wishes than one displaying instruments of torture in his and Boo's bedroom.  

I feel certain that funding is available for “Cuernavaca's Met” if the expatriate community supports John Spencer's vision for La Casona. I have the required legal documents to make this happen.  However a positive public opinion is needed to pressure for such change. I know John Spencer would be delighted if we join to get La Casona, his legacy, back on track.  

Happy birthday Dear John!

Tuesday, April 16, 2013

Sergio Méndez Arceo award

You are invited to a marvelous and festive convergence in Cuernavaca on
Saturday, April 20! Two Tarahumara ‘sacerdotes’ (priests) will descend from the north accompanying Estela Angeles Mondragón. From the southeast will come the heroic and much admired Las Patronas, women whose town, La Patrona, straddles the railroad tracks in coastal and tropical Veracruz. The event is the 21st annual Sergio Mendez Arceo National Human Rights Prize awards ceremony.

Sergio Mendez Arceo was the seventh bishop of Cuernavaca. During a thirty-year tenure (1952 to 1982), Don Sergio was an outspoken advocate for the respect of human rights. He put the Diocese of Cuernavaca on the map in church circles around the world. His Sunday sermons – often bordering on current events talks --covered topics as diverse as the dirty wars of the southern cone of South America, the Central American civil wars, affronts to human rights in the Diocese of Cuernavaca and in Mexico in general. He even talked about the atrocities carried out in the Viet-Nam war and racial discrimination and Indian reservations in the United States.

Beloved by his people, Bishop Mendez Arceo retired at age 75 in 1982 and lived another ten years as bishop emeritus. The Sergio Mendez Arceo prizes have been given out yearly since his death in 1992. Currently it is an award given in two categories -- individual and group.

Estela Angeles Mondragón is to receive the individual award for her work defending the rights of Tarahumara to their land. Neighboring cattle ranchers have invaded land ceded to the Tarahumara as ejido land by presidential decree in 1928. Estela's legal expertise, perseverance, and commitment to the cause of the Raramuri (the name that the Tarahumara prefer to be called) has led to winning 17 of 32 lawsuits filed. Over 12,000 hectares (30,000 acres) have been recovered. Fifteen lawsuits are still pending and may result in the return of 12,000 additional hectares.

The Sergio Mendez Arceo group award is going to Las Patronas. This group of women prepares meals for 200 people, day in and day out. Mealtime is not announced with a dinner bell, but rather by the loud train horn blown by the engineer at the controls of La Bestia (The Beast). Las Patronas feed the people riding on top of the northbound freight train as it lumbers through La Patrona, Veracruz. Their guests are unknown to them. The travelers grab from the women's hands plastic bags filled with rice and beans each tied to a bottle of water. The clickety-clack sound of the train wheels on the track is interspersed with shouts of thanks from the men, women, and children on the train.

For the most part the people riding La Bestia are Central Americans on their way north to the Unites States. They hope to slip across the U.S. border as undocumented migrants, in the same way as they entered Mexico from Guatemala or Belize. Not having a visa for travel in Mexico leaves La Bestia as one of the few means of transportation available to them. Their only food is what they carried with them when they jumped aboard or that given to them by Las Patronas or other similar groups along the way.

In thinking about the travelers atop La Bestia we must celebrate the Associated
Press' announcement this month that its Stylebook no longer sanctions the use of the word "illegal" to describe a person; it should "describe only an action."

Each year I look forward to the privilege of being a member of the jury that votes for the Sergio Mendez Arceo Prize winners. The protocol and rules to be followed -- never knowing how the vote will go, yet confident that the jury's choice will be a good one -- is all of an intensity difficult to describe. On the first two votes the winner must win by 50% plus 1. Yes, people talk about it as white smoke and black smoke. Indeed it is the closest I'll ever get to the feeling that must accompany a papal conclave.

Saturday's events will begin with a Human Rights Forum that starts at 10:00 a.m. followed by lunch on site and the awards ceremony at 4:00 p.m. It will all take place in the recently refurbished Centro Cultural Universitario, Avenida Morelos No. 180 in downtown Cuernavaca (the southwest corner of the city block on which the Cuernavaca Cathedral is located). There is no charge for any of the events. If you can't make it to the forum, you will still be welcome at the awards ceremony.

Last year's prize winner, Javier Sicilia, the leader of the Movement for Peace and
Justice with Dignity, will give this years prize to Estela Angeles Mondragón. In addition to that he will be one of several featured speakers in the morning forum titled "Human Rights:  Challenges and Hope." The forum's closing talk will be by Daniel Zapico, Amnesty International's representative in Mexico.

Tuesday, April 9, 2013

Mexican education


April 9, 2013



Mexico's constitution is long -- 136 articles -- and goes into great detail. Article 1 states  who and what are subject to the authority and protection of the constitution, shows respect for human rights and international treaties, and prohibits slavery. Article 2 recognizes the indivisible nature of the nation, its multiethnic nature, the rights of indigenous peoples' social, economic, political and cultural organization. Right on the heels comes Article 3, which states that the government will provide free and obligatory education that instills national and patriotic pride, democratic ideals, without association with any religion.

Being included in the nation's constitution makes education a federal government responsibility. This is very different from the U.S. where the constitution does not even mention education.  The original 1917 version of Mexico's constitution made education free and obligatory through sixth grade.  In the 1990's that was extended to ninth grade.  In the early 2000's a tenth grade was added at the beginning of a child's educational program -- preschool.

2013 brings its own constitutional change in education.  President Peña Nieto sent the Constitutional amendment to congress in December 2012. Known as the Educational Reform, the bill was approved by both the Chamber of Deputies and the Senate.  Since it involved changes in Article 3 of the Constitution it was then sent to the state chambers of deputies for the required approval by two thirds of the state legislatures.  It was ratified as a constitutional amendment that went into effect on February 25, within the first hundred days of the new administration!

The rules that will be used to implement the new law have yet to be written.  Although the basic structure of the educational system will remain the same, the new guidelines require that public school teachers pass an evaluation by an autonomous institution that will be set up for that purpose.  Will those that do not pass be laid off?  Or will they be retrained?  That is yet to be determined.

The Educational Reform requires that a census of teachers employed by the federal government be carried out.  There are over a million teachers affiliated to the teacher's union -- the largest labor union in Latin America.  However, there is no accurate count of the teachers employed by the federal government nor is there a census of public schools or a rating of the quality of the buildings, supplies, and installations. It will no longer be the teachers' union that will evaluate the competence of public school teachers. Under the new rules principals are expected to have discretionary control over spending taking into account each school's needs. 

As with any change, the Educational Reform has generated discontent in sections of the teacher's union (SNTE), especially in the states of Guerrero and Oaxaca where teachers have been blocking traffic on major highways as a way of demonstrating opposition to the changes.

Although children's test scores do not compare well with their peers in other countries, the textbooks used in Mexican schools do receive kudos. All schools, be they public or private, are required to use the federally issued Libro de Texto Gratuito (Free Textbook) series in grades 1 through 6.  The whole country is moving through the textbook series at the same pace. The exceptions would be classes in bilingual classrooms for Indigenous children.  Lesson plans, tests, and examinations are all included in the free textbook series.  Teachers using the series are much like technicians following pre-designed instructions.  

In grades 7 through 9 -- known as first, second, and third years of "secundaria" --schools have some leeway in choosing their textbooks, however they must be chosen from among those approved by the Secretariat of Public Education.

In grades 10 through 12 -- first, second, and third years of "preparatoria" -- Mexican students start specializing.  They may choose a professional track leading to college or attend technical, vocational, nursing, or normal schools.  In English, the term "normal school" isn't used much any more, but in Mexico it is the designated term for teachers training schools.  Until the 1990's graduates of normal schools with a twelfth grade education entered the labor market with a teachers' certificate for grades 1 through 6.  Now they are required to also complete a three-year licenciatura (bachelor's degree) program concurrently with their first years of teaching.

Normal schools are scattered throughout the country.  Many are boarding schools located in rural areas where they constitute the only institution of higher learning for miles around.  Although they offer students full scholarships including room and board on campus they are on extremely restricted budgets.  Heartwarming stories emerge from them about students taking turns preparing meals for their classmates, stretching the food budget, dealing with bureaucratic and teachers' union red tape. 

The relative ease with which a teachers' certificate can be obtained, coupled with job security offered by Mexican labor law, the perks associate with federal government employment, and a teachers' union that has played a strong role in making placement assignments leads to an understandably strong opposition to Educational Reform among public school teachers.

It is going to be interesting to follow the Educational Reform.  It will be a major factor in determining Mexico's future.

Tuesday, March 26, 2013

Early spring


Central and southern Mexico’s climate, as is true most anywhere in the tropics, is determined more by elevation above sea level than by latitude north or south of the equator.  Climate is quite constant throughout the year; if it weren't for an awareness of the traditional four seasons of our northern neighbors, seasons here would simply be rainy season and dry season. That's probably how, through the millenia, they were known by native peoples. 

With the invasion of the Colonial powers in time past came the imposition of Summer, Fall. Winter, and Spring even though these seasons in Mexico bear little to no resemblance to how they are thought of in Europe or by Mexico’s northern neighbors. It is Summer -- when the rains fall -- that brings greenery and planting. The Spring months are frequently the hottest and driest of the year.  

Though usually thought of as occurring on March 21, this year the spring equinox was on March 20.  Last Wednesday was the day on which the sun -- on its apparent trip north from the Tropic of Capricorn -- crossed the equator on its way towards a rendezvous with the Tropic of Cancer (which runs through northern Mexico) on June 21. 

Of the four seasons, in Mexico Spring seems to take precedence over the other three in being commented, and written about.

For a number of weeks we've been reading about the tourism bonanza Mexico's Caribbean coast is enjoying.  "Spring breakers", usually written in italics, has entered Mexican Spanish media lexicon without even a need for translation.  They make up a steady flow of tourists for a couple of months.  Mainly college aged -- from the US and Canada -- they come for fun and sun and most seem to share a lack of inhibition. However, they come with thick wallets full of dollars; even staid Mexican government and law enforcement officials realizing the boon to the economy, bend the rules to accommodate and welcome them.

Here on the home front, away from the southeastern resorts, March 21st has traditionally been a Mexican holiday -- Benito Juarez's birthday -- fortuitously guaranteeing free access to archeological sites for those wanting to welcome the arrival of spring by charging themselves with energy at archeological sites.  Those that participate in this rite are part of a relatively new Mexican religious phenomenon that has drawn its ideas from all of the world's religions.  They believe God is universal and has certainly acted among all peoples on earth, hence there are valid religious ideas in all of the worlds traditions!  They have no name for their movement, but others needing a name for them call them "La Mexicanidad."  Those that want to put them down -- especially church authorities -- call them "new agers".  They dress completely in white and often meet at archeological sites.  Some will also wear a red bandana around their forehead.

It was common for Teotihuacan to draw a million visitors dressed in white on March 21.   When Juarez's birthday became one of the holidays observed on a Monday, it became hard for the employed to welcome spring midweek. Such was the case this year when visitors dressed in white at Teotihuacan on Thursday were counted in only the tens of thousands.

That same day, I was at Xochicalco -- Morelos' most visited archeological site.  The white clothing of those welcoming spring contrasted with the black banner they held expressing their protest against Esperanza Resources Corporation's intention to initiate open pit mining on the hill adjacent to that UNESCO World Heritage site 

One often hears the expression, “Easter is coming early this year.”  But, the timing of both Lent and Holy Week are far from random.   They, too, are events determined by the Spring Equinox.  

Resurection Sunday (Easter) is the first Sunday, after the first full moon after the vernal equinox.  Jewish Passover is also linked to the Spring Equinox. It cannot occur until after the equinox.  This year Passover will be celebrated March 25-April 2.  

So, in 2013 events are happening in quick succession.   Yesterday was the beginning of Passover, tomorrow the moon will be full.  Sunday will be Easter.  Those who follow the Mexicanidad have already had their equinox celebration but many of them will also participate in Passover or Semana Santa.  Even the young tourists, celebrating in the sun at Caribbean resorts may take time from their revelry to observe these sacred holidays. 

Just as the arrival of "los spring breakers" is set by school calendars, so is the travel frenzy in Mexico that is going on this week and next.  All of Mexico is on the same school calendar which is enjoying a two-week vacation.  Wouldn't it be better for the tourism industry, as well as for vacationers, if Mexico's Secretariat of Public Education staggered the two-week vacation?

Regardless of how you celebrate these first days of Spring, don't miss the majestic beauty of the purple flowered jacaranda trees lining Mexico's streets and highways.  

Tuesday, March 19, 2013

Mexican ID


 We grow accustomed to all the red-tape paperwork while living in Mexico. But there is an interesting exception. Written into the Mexican Constitution, Article 11 tells us that all people have the right to enter the Republic, leave it, travel through its territory and change their domicile "without the need of a security card, passport, safe conduct pass, or any similar requirement."  The clause goes on to say that this rule is subordinate to rules that can be imposed by judicial, administrative, and health authorities on emigration, immigration, and pernicious foreigners residing in the country.  Yes, pernicious is the word used in the constitution. 

A Mexican's right not to carry an identification cards differs from most other Latin American countries where adult citizens are required to carry and produce on demand an identification card or in many cases a booklet identifying the citizen. 

I remember that while in high school in Colombia I carried a small, hardbound, many paged "cédula de extranjería" (foreigner's identification). My friends who were citizens carried a "cédula de identidad".  I've seen similar booklets in Guatemala with the identification information entered in elegant handwriting, authenticated by a national seal applied with a rubber stamp.

Because of Article 11, Mexican immigration authorities have had to come up with ways to differentiate between Mexican citizens and foreigners.  In most cases it's done by skin color, physical stereotypes, or by detecting regional accents. But that doesn't work with many Central Americans, especially Guatemalans.  Ethnically the state of Chiapas is virtually identical to Guatemala.  Until 1824 Chiapas was part of Guatemala. 

When in doubt immigration authorities resort to asking questions only Mexicans are able to answer. They’ll say "sing the national anthem."  Or use words that are particularly Mexican.  In a "good cop-bad cop" situation the good cop will offer the detainee a soft drink, along with a carefully structured question "would you like your coca with "popote" (Mexican word for straw)?" A Guatemalan, supposing popote is a seasoning, might reply "just a little" and fall right into the trap. 

Arriving one day in Tijuana on a flight from Mexico City, I passed through a line where a Mexican immigration officer was doing work for the U.S. Border Patrol. He was picking out undocumented Central Americans before they even got to the U.S. border.  When the man ahead of me was asked "where are you coming from?" he answered "Chiapas."  The officer came back with "what's the capital of Chiapas?"  I could see my fellow traveler stumbling over his answer and about to be caught, so I whispered "Tuxtla Gutierrez." He told the officer “Tuxtla Gutierrez” and was waved through. Phew!  It was interesting to see the officer respect the Constitution and let the man of dubious nationality proceed.  My 28-page FM-2 immigration booklet occupied his attention until the Guatemalan blended into the crowd.  I hope he made it.

Traveling without ID is one thing, but cashing a check is quite another.  Banks and other institutions need to verify a person’s identity.  In the United States a driver’s license has become the acceptable means of identification. My U.S. passport card was turned down as ID in a New York City pharmacy when buying cold medicine. Without an address printed on it there would be no way to track me down if I purchased too much Sudafed!  A drivers license is so ubiquitous in the US that state departments of motor vehicles also issue non-drivers identification -- and charge just as much for them as they do for a driver's license.

A driver's license is not accepted for bank transactions in Mexico.  Instead, a voter registration card has become the acceptable identification.  People from other countries may not even know where their voter's registration card is, but most Mexicans carry it with them in their wallet.  Known as their "IFE" (Federal Electoral Institute) card, it is a credit card-sized identifying document containing the citizen's full name, address, photo, gender, age, electoral code, polling booth number, thumb-print, and signature.  There’s also a magnetic strip on the back of the card with who-knows-what additional information.

In the 1980’s when the IFE first started issuing the current style card, acquisition was so simple it was scandalous.  To demonstrate the ease of requesting multiple fraudulent cards, a National University (UNAM) student wrote a term paper about procuring five different voter's registration cards delivered to her own address plus that of four friends.  Rather than being thanked for whistle-blowing, she was accused of a crime by the IFE.  Now the process is very secure. Banks will accept IFE cards dated as of 2012 as solid proof of both identity and address -- without requiring a recent utility bill a proof of address.    

As a bonus, since voting is both a right and responsibility, the IFE card is free.  The Constitution says there is no restriction on changing domicile, but for purposes of voting, one's address determines one's polling booth.  Fine print on the IFE card requires reporting an address change within thirty days. 

Using voters registration cards as identification is an unusual though subtle and effective way of complying with the Constitution.       



Tuesday, March 12, 2013

The great IVA debate


Mexico's value added tax known as the IVA (Impuesto al Valor Agregado) is set to be a heated topic in the news.  Federal congress will soon start discussions on whether to charge the IVA on food and medicine. 

Value added tax generates tremendous revenue.  France, the first country to put it into effect, generates close to 50% of the national government's tax income with its value added tax. Mexico, where it generates a little over 40%, is not far behind. This type of tax is used by the great majority of nations instead of sales taxes.  The big exception is the United States.

One of the IVA's closely guarded secrets, and the basis of its success, is that it converts every vendor in the formal, above-board economy into a tax inspector. 

IVA is collected in Mexico on the sale of all goods and services.  Most items are taxed 16%.  Even the government collects IVA on its sales.  We pay it on postage stamps, highway tolls, and on gasoline sold by Pemex.  

Some goods are taxed 0% (yes, zero) -- such as non-processed food, medicine, and books.  Therein lies the upcoming debate.  If medicine and food are taxed it will not be a new tax, it will be an increase in the rate, from 0% to something else -- maybe only 3%.  

The IVA rate is 5% lower in border areas -- you might consider purchasing a new car in Chetumal and enjoy touring Mayaland on your way back to central Mexico courtesy of the tax differential.

The fascinating nature of this tax is that only the final consumer pays IVA on the purchased item.  All the other participants in manufacturing and selling of the item are refunded the IVA tax they paid. When they resell an item, the middlemen are refunded the full amount of IVA they paid out when they purchased it -- by only turning over to the national treasury the difference between what they collected when they sold it to their customers and the IVA they had originally paid out when they purchased material.  This is where they become volunteer tax inspectors.  Strict rules govern the bills of sale known as "facturas" guaranteeing that both seller and purchaser are registered taxpayers.  Only valid facturas may be used to document IVA refunds.

Suppose we sell widgets in Mexico.  If we buy them from our supplier for $116 pesos that means that the widgets cost $100 plus $16 pesos in IVA.  If sell them for $232 pesos our factura would show $200 for the widget and $32 for IVA.  Of that $32 we would keep the $16 we paid to our supplier and only deliver the remaining $16 to the national treasury.

The final consumer, who in many cases is not a registered taxpayer, ends up paying the full IVA. 

If a customer does not supply the vendor with appropriate taxpayer registration information the vendor is not required to issue a factura which could be used for a IVA refund.  In that case customers may receive a cash register receipt, or a receipt that does not contain the taxpayer identification of the seller or the buyer.  Nevertheless, whether or not a factura is issued, the vendor is required by law to collect the IVA on all sales. 

When we purchase an item off-the-shelf in Mexico we pay the posted price.  Quite unlike purchasing something in U.S. states with sales taxes where each time we step up to pay for an item we pay 5 to 10% more than the posted price due to local sales taxes.  That's always an irritant to the customer.  Imagine the irritation if the tax added by the cashier were 16%!

Though the IVA is a very successful generator of government revenue, it is criticized as a regressive tax since it is paid at the same rate by wealthy as well as poor.  Even those who live in poverty and are exempt from income tax pay 16% on most items they purchase in the formal economy.  

Formal and informal economy are a set of terms used frequently in Mexico.  Informal economy is "off the books".  Street vendors are a good example.  It also refers to those stores in which we are told, "if you want a factura, I will charge you the IVA."  When I'm told that, what I hear the vendor saying is "I'm a tax evader." 

I recall purchasing corn on the cob from a street stand in Italy and being given a printout of the sale from a printer attached to the vendor's belt.  I told him "I don't need it."  He insisted, saying "I could be reported for tax evasion if you don't take it."    

I'm not foolhardy enough to envision fiscally valid facturas being issued in public markets, but I do wonder how much revenue could be generated if there were a tax office to which we could report shops that want to add the IVA to the posted price, in order to issue us a factura?