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  Number 174 | Enero 1996
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1995's Successes Are Failures

Civic Alliance carried out a referendum on an alternative model of development. Meanwhile, President Zedillo keeps insisting that there is no other viable economic road for Mexico than the one mapped by his government – and that it is a success.

Center of Reflection and Social Action Team of Mexico

The continuing rumbles of the Mexican economy are having repercussions in a number of spheres. They are sparking both rumors and declarations among Federal government officials and leaders of business, political parties, alliances and civic organizations. All this attention, to say nothing of the hurting pocketbooks of the majority of citizens, keeps the issue of the economy center stage in Mexico.

In an interview with a Japanese newspaper, President Ernesto Zedillo declared that "Mexico has carried out a very profound process of structural adjustment in its economy for the past decade. Mexico has a solid structural basis for growth and, given the financial adjustment we have successfully achieved in 1995, I am sure that the Mexican economy will grow, will substantially reduce inflation and will have a strong balance of payments."

To what "success" is the President referring? In December 1994, a 4% growth of the Gross Domestic Product was predicted for 1995. Nonetheless, the GDP dropped to 1.5% in January 1995, to 5% in March and to 6% in November. The third quarter of 1995 was 7% with respect to the same period of 1995, and the year's total fall is expected to be the greatest in the past 60 years.

Perhaps employment? In 1994, it was projected that a million new jobs would be created. But reality turned that projection into two million newly unemployed.

And what about the dollar peso parity? In March the US dollar was quoted at 6 new pesos; by November it had risen to 7.72. And after rumors of a coup in Mexico caused major jumpiness in the financial markets in late November, it crossed the 8 peso line.

That rumor originated in the United States itself our main trading partner, the country in which the Mexican government has put all its trust, the one that came to the aid of Mexico's economic policy after what is now euphemistically being called "the December error." The clearest evidence as to the rumor's source points to Dow Jones, the firm for which former Mexican President Carlos Salinas de Gortari now works.

These and many other figures, plus everything that can be seen in the streets and countryside of Mexico, refute President Zedillo. The readjustment has not been successful and its social costs are increasingly serious.

Is There No Alternative?

Carlos Abascal, leader of the Mexican business grouping called COPARMEX, has increasingly urged the need for results. "Victory songs are not in order, to say the very least," he has said, referring to the peso dollar parity and inflation. For its part, the Catholic hierarchy declared through the president of the Mexican episcopate, "Not a lot of clarity is required to say that Mexico finds itself at a bad moment." Nonetheless, the prelate requested time and understanding for President Zedillo's government.

Wasting no time in vacillation, the economic project has stuck to its course. A new economic agreement called Alliance for Economic Recovery was signed in November, the result of a top level agreement that took into account neither Congress nor other truly representative sectors of society. The proposals contained in the agreement include these forecasts for 1996: 3% GDP growth, 20% inflation, the recovery of salaries two minimum wage increases totaling nearly 20% are projected and equilibrium in public finances supported by an increase in gasoline, electricity and other rates.

Despite this accord, mistrust is spreading through the political, business and social sectors. During Secretary of the Treasury Guillermo Ortiz's presentation of his 1996 economic program to the Congress of Deputies, even Institutional Revolutionary Party legislators expressed doubts that these goals could be reached. PRI deputy and ex state governor of Yucatán Dulce María Suari asked Ortiz, "Why believe in a project whose presumed economic basis is being modified by the current financial instability?" Questioning by legislators of the Democratic Revolutionary Party, the National Action Party and the Workers Party were even stronger. Nonetheless, Ortiz said that the lowest economic growth in 13 years does not indicate a failure of the development model applied in the country since then. Many millions of Mexicans feel very bitter that the Secretary is determined not to consider the model a failure.

In November, an organization called Civic Alliance held a national referendum to present proposals for an alternative economic development model drawn up by distinguished economists and agreed to by over 10 civil groupings. Even though the proposals turned over to the legislators were supported by more than 400,000 signatures, this referendum will make little difference as long as President Zedillo and the Treasury Secretary continue to insist that there is no viable economic alternative to the model the government is implementing for Mexico.

Finally, yet another event in November reflects what Mexico is going through today: while almost half of all Mexicans live in poverty and a third in extreme poverty, the sister in law of ex President Carlos Salinas was detained in Switzerland while trying to withdraw $84 million from a bank there using false documents. That amount equals an average worker's salary for 85,200 years.

Reform the State

The political parties have already presented their proposals for the long awaited reinitiation of the National Dialogue to Reform the State. The dialogue proposes political, economic and social reforms, as well as reforms to the administration system and procuring of justice.

Although all the proposals share common points, differences between the PRI and the opposition parties are evident. The National Action Party (PAN) is open to letting opinions from civil organizations it calls "of clear option for legality" reach the dialogue table. The Workers Party (PT) believes that including unregistered parties and even the EZLN would be beneficial. The Democratic Revolutionary Party (PRD) shares the opinion about the need for broad participation in the dialogue.

The strongest opposition parties the PAN and PRD differ on some electoral issues. The PAN would like to see the legislative branch represented on the general council of the Electoral Federal Institute (IFE), wants the treasury accounting office of the Congress of the Union to oversee IFE resources and would maintain individual financing of the political parties. The PRD considers that since the legislators represent their party, their participation in the IFE would mean the over representation of some parties. It believes that an independent body should oversee the administration of IFE resources and that individual financing of political parties should be limited.

For the PRI, reforming the state includes overseeing the rule of law, protecting civil and political rights, consolidating a party system and an equitable and competitive electoral system, developing a strong federalism and moving to a new balance among the branches of the state.

In initiating the dialogue, the PRI proposal has centered on electoral reform, while those of the other parties go much further: they propose economic and social changes and reforms in the judicial sphere.

Advances by PAN

The parties are going to the dialogue table after having held a variety of elections on November 12. The advance of the PAN is evident in the country's urban zones. In Michoacán, considered the PRD's bastion, the PRI won the governorship and the PAN pulled 14 of the state's most important mayorships, while the PRD triumphed in 52 races for municipal mayor. The PAN will govern almost 50% of the electors in that state, while the municipalities that the PRI and PRD will govern are mainly rural.

Citizen councilors were elected in the capital. Without the official participation of the political parties, absenteeism reached 85%. Elections were also held in Puebla, Tamaulipas, Sinaloa and Oaxaca, with results somewhat similar to Michoacán. The PAN made clear advances in the urban zones, winning four of the five capitals of the states in dispute, while both the PRI and PRD suffered setbacks in all but the rural zones. If these trends continue, the PAN could win a majority of the seats in the Chamber of Deputies in 1997.


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