Mexico’s Salinas Cites Gains in Economy and Claims Political Reforms

In his second annual “state of the nation” speech, President Carlos Salinas de Gortari on Thursday portrayed a Mexican economy that is far healthier than when he took office two years ago, but he was roundly booed by opposition legislators when he claimed equal success in political reforms.

Salinas said the economy is growing, with lower debt payments and interest rates, a reduced budget deficit and a trimmed-down government. He conceded that inflation is higher than projected but asserted that real wages are rising--another point that earned protests from the opposition.

“Today we can state that overall conditions for sustained growth are being consolidated,” Salinas said in his two-hour speech.

But one banner raised by lawmakers said, “Salinas Equals More Hunger and Misery in the Countryside.”

After six years of a negative or a stagnant economy, Salinas said, growth was 3% in 1989 and will be more than 2% this year. Annual inflation, he said, will be “in the neighborhood” of 20%--lower than the 30% that independent economists project but far better than the 160% when Salinas took office. The budget deficit will be 1% of the gross domestic product, he said.

Salinas received a standing ovation when he vowed to protect the nation’s oil reserves in free-trade negotiations with the United States. The negotiations are to begin in the first half of next year, he added.

“Negotiation of the type of agreement that we seek to reach with the United States will not entail any topic that is not strictly limited to the sphere of trade. . . . I want to confirm the fact that Mexico will maintain its ownership and complete dominion” over the reserves, he said.

The Mexican government has said it will not include the issue of oil production and exports in free-trade discussions, a point that the United States wants on the agenda.

Salinas ran into trouble from opponents on the left and right when he asserted that the country now has a fair electoral law that guarantees no party a majority on the supreme electoral council. Although the right-of-center National Action Party voted for the new law in Congress, its leader, Luis H. Alvarez, said, “We still don’t have an adequate instrument to guarantee democracy.”

Several Congress members and senators from the left-of-center Democratic Revolutionary Party asked, “What country is he talking about?”

The new law, designed by the ruling Institutional Revolutionary Party, or PRI, increases opposition vigilance over voting but essentially leaves the process in the hands of the PRI government. The president designates key members of the electoral council.

When Salinas mentioned “transparent” elections, he was answered by chants of “Electoral fraud!” from both sides of the political spectrum. Opposition parties accuse the government of fraud in last week’s elections in Coahuila state, as they have in most state elections since Salinas took office.

Salinas reiterated his view of a world dividing into economic blocs and Mexico’s need to keep pace with the changes; that, he said, is why he is streamlining the government, selling off commercial banks, deregulating industries and opening the country to foreign trade and investment.

“In the economic sphere, we are witnessing the globalization of markets, financial interdependence and rising competition. . . . Those who do not adapt in time will let the opportunities offered by the new situation pass them by but will have to suffer its disadvantages,” Salinas said.

“Clearly, the point is that we must recognize the new rules of global competition, accelerate economic change at the domestic level and increase our participation in world markets.”

The president said the nation’s foreign currency reserves are $8.4 billion--a figure the government releases only twice a year. He contended that $5 billion in foreign investment has been approved since May, 1989, but independent economists say less has actually been coming in.