International : Salinas Unveils 6-Year Growth Plan for Mexico

Mexican President Carlos Salinas de Gortari on Wednesday unveiled a six-year development plan that he said will restore growth and living standards to the nation’s 85 million people.

“Our nation cannot continue with stagnation and inflation,” he told his Cabinet at the national palace. “The state and society must change to create jobs, to eliminate extreme poverty, to give all Mexicans access to basic services in a climate of freedom, harmony and security.”

The plan, for 1989 to 1994, envisions average annual growth of 2.9% to 3.5% in the next three years, rising to 5.3% to 6.0% until 1994.

The forecast compares to average gross domestic product growth of only 0.1% between 1983 and 1988. The highest growth rates will be in the construction, electricity, gas and water sector.

Rise in Exports

Exports are projected to rise more slowly than GDP because a constant ceiling is assumed on oil exports. The plan does not project the actual volume of oil exports.

The plan sets investment at 22.7% to 23.1% of GDP in the first three years versus 19.1% between 1983 and 1988. Investment should rise to between 25.6% and 26% by 1994.

Net transfers of financial resources will fall to 1.7% to 2.1% of GDP between 1989 and 1991, and to 1.5% to 1.7% by 1994.

Salinas said Mexico has made important progress in restructuring its $100-billion foreign debt, the Third World’s second largest, after agreements with the International Monetary Fund and the World Bank.

Mexico is seeking new credits, debt reduction and reduced interest payments worth $4.5 billion a year until 1994.

“We are now in the midst of negotiations with foreign banks, and the principles stipulated by Mexico have been accepted,” Salinas said.

Continued Discipline

The plan calls for continued discipline to reduce the overall fiscal deficit to 4.8% to 5.8% of GDP between 1989 and 1991 from an average 13.8% from 1986 to 1988. From 1992 to 1994, the deficit will drop to 3.0% to 4.0%.

Meanwhile, Mexico’s burgeoning population, projected by Salinas at 104 million to 108 million people by the year 2000, makes it necessary for the country to boost efforts to raise food production.

The plan says Mexico’s agriculture will be modernized by decentralizing policy-making and financial assistance, while investment will be increased, especially in irrigation.

A goal of the development plan will be to perfect democratic processes through electoral reforms, Salinas said. These include improved voting and vote-counting procedures and more access to the media for opposition parties.

Mexico has been governed by the Institutional Revolutionary Party for the past 60 years. Opposition leaders accuse the party of rigging the July elections won by Salinas.

Regarding foreign relations, the plan makes no direct mention of any Mexican role in Central American peace efforts. Mexico helped found the four-nation Contadora group that sought a negotiated peace in Central America during the early 1980s, but the Salinas government has kept a low profile in the area.

The plan calls for closer ties with Guatemala, Mexico’s neighbor to the south, and increased cooperation with Colombia and Venezuela.