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Salinas to Open Mexico for Markets, Rival Politics

June 26, 1988|William Schneider | William Schneider is a contributing editor to Opinion. He was Carlos Salinas' Ph.D. thesis adviser at Harvard

WASHINGTON — A new generation of leaders is emerging on the world stage, representing what might be called the post-ideological left. Michael S. Dukakis, the Democratic Party's prospective presidential nominee, is one. Soviet leader Mikhail S. Gorbachev is another.

In their values, they are loyal to their party traditions. But they often reject rigid ideological formulations of the past. Their critics call them technocrats. What they are is problem-solvers. If political traditions get in the way of solving problems, then it may be time to re-examine the traditions.

Another name can be added to this list--Carlos Salinas de Gortari of Mexico. The 40-year-old Salinas is the ruling party candidate in next month's Mexican presidential election. He won't have a problem getting elected. His party has not lost a presidential election in almost 60 years. His problem is more difficult--restoring legitimacy to the system he represents.

There is probably no party on earth as encrusted with myths and rigidities as the ruling party of Mexico. Even its name reflects this--the Institutional Revolutionary Party, or PRI. Look at how Salinas was nominated--the dedazo , or "tap on the shoulder," by the outgoing president, Miguel de la Madrid.

God knows, Mexico has problems that need solving. During the oil boom of the 1970s and early 1980s, Mexico went on a binge of spending and borrowing that nearly ruined the economy. Horrified by the excesses, De la Madrid undertook an austerity program. The architect of these reforms was Salinas, a Harvard-educated Ph.D. who served as budget minister.

Salinas' policies threatened established interests protected under the old system of "statist populism." His policies came under even greater pressure after oil prices collapsed in the mid-1980s. Some 25% of government revenues had come from oil. Unlike previous presidents, however, De la Madrid stuck with his austerity program. Designating Salinas as his successor demonstrates his commitment.

There are signs of progress. Inflation has been cut and the debt situation seems to be under control. This has come at a price, however. Real wages for industrial workers have declined by more than 50% since 1982. Unemployment is severe.

According to a report on Mexico prepared several years ago by the Central Intelligence Agency, "Many upper-middle-class and business leaders feel alienated from the PRI and are beginning to discuss political alternatives. . . . This trend, now in its formative stages, could accelerate."

Salinas's program aims at reversing the trend. His difficulty is that he must do it from within. The PRI is the only available instrument for reform. But it is also the greatest obstacle.

In an interview with The Times, Salinas summarized his solution to Mexico's economic problems: "Grow, grow. Grow with a strategy that emphasizes more jobs per peso invested. And that is very much dependent on increasing exports."

The Mexican economy has long been statist, with massive government spending and public subsidies to satisfy important constituencies. Major sectors, such as the oil industry and the banks, have been nationalized. Indeed, De la Madrid recently described his job as "rector" of the national economy.

When Salinas was asked what he thought that meant, his answer was anything but statist. "The state must promote growth," he said. "That does not substitute for individual effort. We have a mixed economy, and I'm trying to have it more mixed. Any modern state has a responsibility to promote growth. Governments of other countries promote their businesses. It's the same for us." That sounds a lot like Dukakis, and there's a reason. Both men attended the Kennedy School of Government at Harvard.

At times, Salinas even sounds a little like Britain's Margaret Thatcher. "You cannot have a proper exchange rate for the most inefficient businessmen," he said. "Some will have to die. The efficient ones will live."

How can the United States help Mexico's economic modernization? "Keep your markets open, because we are opening ours," Salinas said. "If you want the debt served, it is illogical for you to close your markets to Mexican exports that provide the foreign exchange to service the debt." He added a warning, however. "We must grow. For me there is no question. We will service the debt if it does not hinder the possibilities (of growth) in Mexico."

In the opinion of many, Mexico's continued economic modernization is dependent on political change. You can't have an open economy and a closed political system. Salinas is clearly sympathetic to this. "We need to go much further with political modernization," he said.

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