Assassination Will Add to Mexico’s Woes : Violence: Death of ruling party candidate compounds already gloomy concerns by international investors.

The assassination Wednesday evening of Luis Donaldo Colosio, the Mexican ruling party presidential candidate, will aggravate the already serious worries that international investors have had about the nation’s business climate, experts said.

Chief among the concerns is whether the attack on Colosio will prove to be an isolated event or part of a broad campaign of political violence.

Investors have been skittish since a bloody New Years Day rebellion by peasants in the southern Mexican state of Chiapas.

The specter of “politically motivated violence is something that no one was anticipating at the beginning of this election year,” said Wayne Cornelius, director of UC San Diego’s Center for U.S.-Mexican Studies.

Colosio’s death will create a “scramble to succeed him” and a “great deal of uncertainty,” Cornelius added.

“The thing most dangerous to U.S. interests, for business and in general, would be a long period of unrest and sorting things out,” added Colleen Morton, a political scientist at the Institute of the Americas, a La Jolla-based think tank.

Business development and investment in Mexico “have been slowed down due to Chiapis and the election, and things will slow down further because of this” even if Colosio recovers from the shooting, Morton said.

Colosio wasn’t generally the first choice among international investors as the candidate of the ruling party, known as PRI, to succeed outgoing President Carlos Salinas de Gortari. Still, Cornelius said business interests were “quite comfortable” with Colosio.

Morton said Colosio was regarded as highly trained and “part of the modern Salinas economic team.” She said he was expected to continue a policy of liberalizing the economy and “extending the benefits to rural communities and the urban poor.”

Colosio, who has served in Mexico’s Cabinet, strongly supported the North American Free Trade Agreement.

Wednesday’s attack follows several weeks of plummeting prices on the Mexican Stock Exchange--sparked by concerns about Chiapis.

The market began to recover this week, boosted by news that a serious political challenger to Colosio, Manuel Camacho Solis, would drop his presidential bid to focus on his efforts to negotiate peace in Chiapis.

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