Mexico: Changing Times
Under normal circumstances the State of the Nation speech that is delivered annually on Sept. 1 by the president of Mexico is a routine event, noted more for pomp than for substance. But these are not normal times in Mexico, as outgoing President Miguel de la Madrid graphically illustrated on Thursday when he spoke to a divided national congress.
During his speech De la Madrid was interrupted by chants and catcalls from opposition congressmen, who hold 240 of the 500 seats in Mexico’s Chamber of Deputies. It was an unprecedented display of disrespect for a modern Mexican president, and it came from a new political bloc that has unprecedented power to resist De la Madrid’s ruling Institutional Revolutionary Party (PRI). The irony of the situation is that no Mexican president in 50 years has been so acutely aware of the need for change in Mexico as has De la Madrid.
The president used his final report to the nation to discuss the profound economic and political changes that Mexico has undergone since he took office in 1982. As one might expect, De la Madrid defended his performance in office despite the fact that his economic policies caused considerable discomfort for the majority of Mexicans. “We recognize that the cost of these changes has been high,” he said with admirable candor, but the Mexican people “wisely understood that to attain lasting well-being it was necessary to truly reform the country.”
The decisions that De la Madrid made in order to help pay Mexico’s $100-billion-plus national debt at a time of falling oil prices and rampant inflation were especially painful, but it must be remembered that he inherited most of the problems that he faced from the profligate and corrupt administration of his predecessors, Jose Lopez Portillo and Luis Echeverria Alvarez. De la Madrid courageously ignored domestic demands that Mexico repudiate its debts, negotiated better terms for their repayment and then imposed the harsh austerity program that Mexico’s creditors insisted on. The program helped control inflation and began reducing the state role in Mexico’s economy, laying the groundwork for a stronger private sector and for more foreign investment in the nation--and both are needed if Mexico is going to work its way back to financial health.
Despite his focus on the economic issues, De la Madrid could not ignore the significant political changes that took place in last July’s national elections. Indeed, the evidence sat before De la Madrid’s podium, chanting “Fraud!” and jeering. Never before has the PRI been in such a precarious position. And that will make it very difficult for the PRI loyalist who succeeds De la Madrid as president, Carlos Salinas de Gortari, to follow through on his economic policies.
The largest number of congressmen in the Mexican opposition belong to leftist political parties that supported populist presidential candidate Cuauhtemoc Cardenas, who ran second to Salinas in July’s balloting. Many of them want to repudiate the debt, although both De la Madrid and Salinas have said that it would be irresponsible to do so. In his speech De la Madrid said that Mexico needs “greater joint responsibility and understanding” from its creditors in order to solve “the problem they helped foster.” Those were polite words of warning for the international bankers who hold Mexico’s debt that things have changed for them, too. Many international financial experts worry about the effect that a Mexican default would have on the world economy. They count themselves fortunate that Salinas, and not Cardenas, will succeed De la Madrid on Dec. 1. Creditor nations, including the United States, must now prepare to give Salinas the help that his government needs to relieve the pain that Mexicans have lived with for the last six years. The alternative is Mexico as a very uncooperative debtor.