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Mexico's Time of Danger : In This Turbulent Period, U.S. Must Help Ease the Debt Crisis

September 18, 1988|ROBERT A. PASTOR | Robert A. Pastor, a professor of political science at Emory University in Atlanta, is co-author with Jorge G. Castaneda of "Limits to Friendship; the United States and Mexico" (Alfred A. Knopf, 1988). During the Carter Administration, he was director of Latin American affairs on the National Security Council.

Mexican President Miguel de la Madrid's last "state of the nation" report was significant both for what he did not say and for what the opposition did.

De la Madrid rejected the temptation to divert national discontent by demagoguery. The opposition asserted its new power by heckling him.

For Mexico, this was a startling display of either disrespect or independence, depending on which side of the political aisle people were sitting. The noises in the Assembly were the sounds of a system opening and the cries of anguish from people who had quietly accepted a 40% decline in income since 1980. But the noises also portend the most serious political turbulence in Mexico since its revolution.

In the coming months, decisions made by a divided government and opposition will determine whether Mexico passes through this difficult period peacefully or violently, and whether the end of the journey is democracy, another revolution or, more likely, a new, peculiarly Mexican pluralistic configuration.

De la Madrid's two predecessors had tried to recover their prestige in their last year in office by spectacular acts that benefitted themselves politically, but cost their country. De la Madrid chose the unpopular path of urging the continued opening of Mexico's economy and politics, though only his successors will benefit from these policies.

The nation's dangerous transition is the result of both long-term success and recent failure. Three decades of rapid growth spawned a large middle class that demanded choice and change. The last six years of depression and austerity have drawn masses of people to the opposition and provided it with a new leader, Cuauhtemoc Cardenas. This former governor and member of the ruling Institutional Revolutionary Party, or PRI, has been portrayed as a radical "Fidelista" intent on overthrowing the system or as a fundamentalist ayatollah intent on stopping modernization and returning to the old days of nationalization and protectionism. In fact, he is a modest, decent man who believes that his old party was captured by technocrats who are more concerned with promoting private investment than assisting the poor. But while he speaks for the poor and their pain, the skills necessary to rejuvenate the nation's complex economy lie mostly in the party he left and with its shrewd and talented new leader, Carlos Salinas de Gortari.

Now that Salinas has been certified as president-elect, the opposition needs to decide how far to push the system to protest the electoral fraud. There are elements within both the Cardenista opposition and the government who are interested in reconciliation, and elements who believe that their rivals only understand force. The hard-line elements are virulent enemies and tacit allies--force can only help the extremes.

Instability could result if the system closes or, paradoxically, if the opposition thinks change is possible. This uncertainty, together with the Mexican political system's complexity and defensiveness, should serve as a stop sign for Americans who want to prescribe a political solution. The United States should support democracy as a universal right, regardless of the outcome, but it should not interfere in Mexico's politics. Only Mexicans can and should decide their own future.

Washington, however, should move aggressively in one area. Since 1982, Mexico has sacrificed development and price stability as it transferred more than $40-billion net abroad to pay its debt. The National Bank of Mexico has estimated that if $7 billion of this debt service had been invested in the country in 1987, rather than paid to foreign banks, the economy would have grown four times more and inflation would have been 40% less. The United States has also paid the price of Mexico's debt in fewer exports and jobs. Continued debt-induced austerity would greatly harm both countries, particularly if interest rates rise and oil prices fall.

The Reagan Administration has responded twice to the debt crisis, but without the vision or the political will necessary to devise with Mexico a long-term solution that would permit its economy to grow.

A sharp reduction of the debt should be among the highest priorities for the new U.S. Administration. Since only one-third of Mexico's external debt is owed to American banks, the United States should take the lead but also involve Japan and Western Europe.

We have a vital stake in Mexico's safe transition toward democracy and its restoration of economic growth. The United States can no longer afford to allow its relations with Mexico to drift, and it can no longer postpone a resolution of Mexico's debt predicament.

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