De la Madrid Issues Appeal on Mexican Austerity Plan

President Miguel de la Madrid, in his annual New Year’s message, appealed for understanding of his government’s prolonged austerity measures, which he described as indispensable to Mexico’s political and economic well-being.

The message, delivered Sunday night from the president’s office, was televised throughout the country and printed Monday in all Mexican newspapers.

The president referred specifically to recently imposed increases in the cost of gasoline and electricity, which he called “hard but necessary decisions.” The cost of electricity was increased by an average of 18% and the price of gasoline went up 37.5%, bringing the price of regular-grade gasoline to $1 a gallon.

The increases virtually wiped out any advantage that workers might have realized through a recent decision to raise the minimum wage by 30%, from $4 to $5.20 a day. De la Madrid insisted that there was no alternative.

Because gasoline and electricity are both government monopolies, the government will derive additional income from the higher prices, he said.

“We are a country of 77 or 78 million people, growing at a rate of 2 million per year,” the president said, “and without these steps we would reduce our income and thus further undermine our standard of living.”

The speech was couched in the rhetoric that the president customarily uses when speaking of the economic crisis that he inherited from his predecessor, Jose Lopez Portillo, upon taking office in December, 1982. He called upon Mexicans to display national solidarity, to stand firm in the face of adversity and to be confident that the government is overcoming its economic difficulties.

“It is true,” he conceded, “that the past two years have been hard and difficult, and we have had to conscientiously swallow some bitter pills, but this is necessary because we know that a great country can only be forged through effort and perseverance.”

In the past week, the news in the Mexican press has been dominated by reports of violence in the northern state of Coahuila brought on by disputed municipal election returns. In Piedras Negras, protesters against the official party headed by De la Madrid burned the City Hall a week ago. But De la Madrid made no direct mention of these incidents.

Instead, he asked political parties to “elevate the quality of the contest and safeguard the legality of our voting.”

Outlining the achievements of the past year, he said that inflation had been reduced--the final figure for the year is expected to be about 56%, compared to 80% in 1983--and that the gross national product had shown an increase of 2%, a significant improvement over the disastrous performance of 1983, when GNP declined by 5.7%.

Mexico, which has $96 million in foreign debt, succeeded in renegotiating $48.5 billion of that debt last summer, extending repayment through 1998. But to meet the new payment schedule, Mexico will have to cut back on imports while increasing its own exports.