Better Times Ahead, De la Madrid Says : He Tells Mexico’s Congress That Economic Emergency Is Over

In a state of the nation address filled with the triumphal air typical of Mexican leaders on their way out of office, President Miguel de la Madrid on Tuesday declared an end to his country’s economic crisis and said better times lie ahead.

“Ours is no longer a time of emergency, but one of renewal,” said De la Madrid, who is in the fifth year of his six-year term. “There are already promising signs on the horizon this year.”

De la Madrid spoke for more than 4 1/2 hours to a joint session of Mexico’s Congress as well as to invited government officials and foreign diplomats. He admitted that inflation, which is running at a rate of at least 125% a year, “continues to be high.” But in line with the generally upbeat tone of his talk, De la Madrid added: “It is not out of control, and additional measures have been taken to moderate its pace.

“We prevented the collapse of the nation’s economy,” he asserted, arguing that in the meantime, social peace in the country had been preserved.

“The results are there for all to see. We have full enjoyment of our freedoms and exercise our rights; the natural problems of our life together are resolved through dialogue and negotiation; essential social and public services are provided at adequate levels, and their coverage and quality have improved.”

The overall optimism of the speech was marred by a surprise dissent from the country’s largest labor union. A statement from the Federation of Mexican Workers released the day before suggested that workers’ dissatisfaction is on the rise and that the next administration will have to improve their lot.

Economic experts say that on the heels of five years of decline, the Mexican economy is still not growing and unemployment is high.

Best Public Light

The address was De la Madrid’s next to last state of the nation address. Mexican presidents make six of them, one for each year in power. Since the establishment of annual addresses eight presidential terms ago, presidents have used the fifth speech to try to place their administrations in the best public light and to fix for themselves a favored place in history.

“The fifth presidential report has exhibited before the nation . . . all the successes, pride and conquests of each regime,” according to a historical overview published by the newspaper La Jornada.

The fifth speech also attracts special scrutiny in case the president should hint at whom he will choose as a successor. De la Madrid, 52, is expected to select a candidate to succeed him this month or next. His choice will run as candidate of the ruling Institutional Revolutionary Party. The PRI, as the party is known, has not lost a presidential election in its six-decade history.

The six candidates, whose names were recently made public by PRI leaders, sat in apparently rapt attention near De la Madrid on the podium at Mexico’s Chamber of Deputies: Alfredo del Mazo, the secretary of energy, mines and government-owned industry; Interior Secretary Manuel Bartlett Diaz; Planning and Budget Secretary Carlos Salinas de Gortari; Atty. Gen. Sergio Garcia Ramirez; Public Education Secretary Miguel Gonzalez Avelar, and Mexico City Mayor Ramon Aguirre.

De la Madrid, draped with the red, white and green presidential sash that all six men aspire to wear, showed no obvious preference for any of the six during his speech. He cautioned against abrupt changes in his economic policies, which have emphasized controlled government spending and opening the economy to foreign trade.

“The crisis is temporary, and Mexico is managing. We must not fall back on myths that we have long outgrown nor seek solutions in the past,” he said.

De la Madrid blamed the stagnant economy of his years in office on falling prices for oil and other resources that Mexico exports and on the drying-up of foreign loans at a time when Mexico was making heavy payments on both its foreign and internal debt.

He said that this year’s outlook is improved because oil prices have risen, the country is exporting more manufactured goods, new investment possibilities are opening up and the government is making “selective” investments, presumably in projects like roads, power plants and schools. Also, new loans that brought Mexico’s total foreign debt to $103 billion have begun to be disbursed this year.

Record Foreign Reserves

De la Madrid pointed to two financial signs of recovery: the return to Mexico of dollars hoarded abroad by Mexicans and new, record foreign reserves held by the Bank of Mexico. He said the reserves amount to $14.6 billion.

He gave no indication of what the government might do with the windfall. Economic observers had expected some word on how the government might spend the money. Rumors circulated in Mexico City that De la Madrid would insert a surprise announcement into his prepared text, perhaps about plans to inject the money into the economy to fuel growth or to use it pay off parts of either the foreign or domestic debt.

But delivering surprises is not De la Madrid’s style. On Tuesday, true to his unwaveringly low-key manner, he assured listeners that no major changes in his economic policy will be made during the rest of his term. “In the last part of my government, we will only propose initiatives that allow us to complement and strengthen what is already in progress,” he said.

With the pledge, he was clearly rejecting the custom of some previous Mexican presidents to reach for the dramatic in their final days despite the consequences for the new administration. His predecessor, Jose Lopez Portillo, for example, nationalized Mexico’s banks in the final days of his term, helping set off a flight of dollars to the United States.

De la Madrid offered no quick fix for price increases that have cut sharply into the living standards of most Mexicans. He said inflation is rising “largely because of the momentum it has gained.” Nor did he suggest any short-term solution for unemployment, which is said to be running at 30% of the labor force.

Such a passive stance is apparently creating unrest within labor unions allied with the ruling party. In a statement handed to PRI leaders Monday, the Federation of Mexican Workers, which claims a membership of 4 million, said that “the current model of economic development has to be replaced.”

The statement did not directly attack De la Madrid but called on the next administration to promote “a deep social reform that redistributes wealth and income.” The statement was seen by some observers at a slap at presidential candidate Salinas de Gortari, who is considered one of the architects of De la Madrid’s austere policies.

As has become customary, the National Action Party, a conservative opposition group, boycotted the speech in support of its charges that the PRI unfairly dominates national politics and routinely carries out fraud in Mexican elections.

De la Madrid’s speech dealt mainly with domestic issues; foreign affairs received only brief mention.

Fight Against Drugs

He said Mexico has overcome “various problems” with the United States, including some related to the fight against drug traffic. De la Madrid, rather vaguely, said a “better climate” has been established in joint efforts against the narcotics trade. He insisted, however, that the United States must take stronger steps to stop Americans from using drugs.

“As long as the demand for drugs in consumption centers is not curbed by vigorous educational campaigns and actions and more determined efforts to combat it, there can be no final solution to the problem,” he declared.

In his speech, the emigration of Mexican workers was an evident sore point in relations with the United States. De la Madrid complained that Mexican workers “are subjected to discrimination” north of the border.

Although the Mexican president did not specifically attack new U.S. laws designed to stem the influx of workers, he said Mexico would use “all the legal, political and diplomatic instruments available to us to ensure that our fellow countrymen (in the United States) enjoy the rights and privileges which they are entitled to.”