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LOS ANGELES TIMES INTERVIEW

Carlos Salinas

A President Back From Exile to Rehabilitate His Image

October 08, 2000|Sergio Munoz

MEXICO CITY — Former Mexican President Carlos Salinas de Gortari is back in Mexico, and he's pulling no punches in criticizing the current president, Ernesto Zedillo.

Salinas has written a book, almost 1,500 pages long, that details the accomplishments of his administration. Included are documents that he hopes will prove that Zedillo, not he, is responsible for the 1995 economic crisis, when the peso's value collapsed and interest rates soared. Salinas also describes a two-decade-old power struggle between hard-liners in the Institutional Revolutionary Party, or PRI, and reformers like him.

Mexicans believe Salinas has a lot of explaining to do. When his presidential term ended Dec. 1, 1994, he had one of the highest approval ratings in the country history, about 70%. Four months later, his popularity had collapsed. Salinas not only was blamed for the economic catastrophe that devastated Mexico in 1995; he also was accused of heading a conspiracy to cover up the investigation of the assassination of presidential candidate Luis Donaldo Colosio.

In February 1995, his brother Raul was jailed and charged with masterminding the 1994 killing of PRI Secretary-General Francisco Ruiz Massieu, who was also Salinas' former brother-in-law. But worse things were to come for Salinas: Swiss authorities discovered that Raul had deposited millions of dollars in a Swiss bank account through a complicated scheme. The investigators suggested that the money had been paid to Raul before and during Salinas' presidential term by Colombian and Mexican drug dealers in exchange for protection. Raul was convicted last year of organizing Ruiz Massieu's murder and sentenced to 50 years in jail, which was later reduced to 27 years. The Swiss have not been able to prove their drug-connection accusations.

Salinas left Mexico in March 1995, knowing that Mexican public opinion had turned against him. Since then, he has lived mostly in Dublin.

Many wonder what Salinas, 52, is really up to. Did he return home to challenge President-elect Vicente Fox or will he join the ranks of past presidents who live in wealthy suburbs and are despised by the people?

Salinas was interviewed in Mexico City in the house of his new parents-in-law. He is married to Ana Paula Gerard and has two children with her.

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Question: Six years after the peso-devaluation crisis of 1994-95, many Mexicans still blame you for the dramatic economic downturn. Are they wrong?

Answer: When I finished my term, there were some economic insufficiencies: a trade deficit, a problem with the exchange-rate regime and some non-performing loans. But inflation was the lowest in a quarter of a century, there was no fiscal deficit, the level of debt was the lowest in 25 years and Mexican exports were performing superbly. The problems, however, cannot explain the magnitude of the crisis. The crisis of 1995 was due to two fundamental mistakes that President Ernesto Zedillo committed 20 days after taking office.

Q: What mistakes?

A: First, members of the Zedillo administration provided inside information to a few Mexican businessmen that a peso devaluation was in the works. Needless to say, those businessmen went out and bought dollars.

Q: How much?

A: Half the total foreign reserves. Without those reserves, there was no way to stabilize the peso.

Q: How do you know this?

A: Reliable documents provided by the Central Bank of Mexico and the International Monetary Fund. The flight of capital this time was not provoked by foreign speculators but by the infamous error de diciembre, the mistake of December.

Q: What was the second mistake?

A: A team of trained economists, headed by Zedillo, took more than three months to adjust their economic program to [the peso devaluation]. During those three months, domestic interest rates went from an annual 15% rate to more than 110%. There was no way any business in Mexico could withstand this kind of interest rate. Just think of the millions of Mexicans whose houses were mortgaged and who had to pay their car Sergio Munoz is an editorial writer for The Times.

[loans] and credit cards. This is what brought them to default. I can understand their irritation, but when the people demanded an explanation, the government, instead of a sound explanation of its blunders, put all the blame on the previous administration. For six years, Mexicans have been subjected to a persistent campaign of misinformation about my administration in order to cover up [this administration's] blunders.

Q: Why did you go on a hunger strike in March 1995?

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