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Predecessors' Fate Seems to Be Stalking De la Madrid

December 20, 1987|DAN WILLIAMS | Times Staff Writer

MEXICO CITY — With the economic policies of President Miguel de la Madrid in sudden disarray, Mexican citizens are beginning to contemplate what appears to be a chronic streak of failed presidencies.

Although 11 months remain in De la Madrid's six-year term, economic upheavals and unusually harsh criticism of his government have led many observers to conclude that De la Madrid's term will be judged a flop, the third one in a span of 18 years.

The two presidents who preceded De la Madrid left office in virtual disgrace in 1976 and 1982, their accomplishments overwhelmed by the political and economic turbulence that dominated their closing days in power.

"This president has tried to hold the line to the end of the term but is unable to do so," said Adrian Lajous, a columnist and author of books on the presidency. "It looks like another bad finale."

The specter of a ragged exit by De la Madrid may have profound effects on the Mexican political system, which is dominated by the image and action of a strong president as well as a method of choosing a chief executive that many consider to be archaic and ineffective.

At present, the outgoing president handpicks an heir who then runs for office as the candidate of the Institutional Revolutionary Party, Mexico's dominant political organization. Last October, De la Madrid chose as his successor Carlos Salinas de Gortari, formerly the budget and planning secretary in the Cabinet.

Salinas is considered to be an invincible presidential candidate, partly because of the overwhelming organizational powers of the PRI, as the ruling party is universally known, and its almost unlimited access to government resources dedicated to the campaign. The election is scheduled for July.

Recently, critics inside and outside the PRI have stepped up calls for an open, democratic selection of the party's candidate as well as for guarantees that elections will be free of fraud. The string of failed presidencies adds weight to their arguments.

"There comes a point when you have so many unsuccessful presidencies that you have to look at the system. It isn't just a question of personalities, but something built in," said Jorge Castaneda, an economist.

Political commentator Lorenzo Meyer, writing in the influential newspaper Excelsior, advised: "A large number of government critics say assuredly that reforms urgently needed by Mexico are only possible through radical surgery--the elimination of the actual system, which is the sustenance of the corrupt and inefficient governments of the last decades."

De la Madrid's problems have come fast and hard. Without warning in November, the Bank of Mexico, the government's reserve banking institution, withdrew support for the country's currency on the free market in a move meant to slow demand for U.S. dollars bought with Mexican pesos. Instead, the bank's action set off a run on dollars that drove the value of the peso sharply downward. On the day before the devaluation, 1,700 pesos would buy a dollar. The day after, buyers needed 2,500 pesos or more for a dollar.

The government insisted that the devaluation was only partial and pledged to support the peso at a higher value on the so-called controlled market, where businesses obtain pesos to make foreign transactions.

But for many Mexicans, the peso is judged by its value in dollars on a moment's notice in the free market. Responding to the collapse of the peso, merchants quickly raised prices of products, and even the government increased its fees to match the decline. An airport tax, adjusted monthly to the equivalent of $10, was pegged at 25,000 pesos for December, for example, even though by official calculation $10 was worth less than 18,000 pesos at the moment the adjustment was made.

The skyrocketing prices then triggered demands for higher wages. The Confederation of Mexican Workers, the country's largest trade union and longtime ally of the government, threatened a general strike. Prices have increased by 150% in 1987. Economists predict they will more than triple next year.

De la Madrid formulated an emergency response to the issues. He granted workers a two-step, 38% wage increase and raised prices of government-supplied products such as gasoline and fertilizers by up to 85%. He then promised that the seemingly endless spiral of inflation would come to an end in March, when the government would index wages to price increases.

Except for support from some businessmen, reaction to the president's proposals has been negative. Organized labor groups linked with the PRI criticized the plan. Convinced that workers would lose ground to inflation, labor leaders warned that they may reconsider their traditional alliance with the government. No one can remember the last time the unions made such a threat.

"The present situation of wage earners can only be described with a word that cannot be printed," Arturo Romo, an official of the Confederation of Mexican Workers, said last week.

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