Mexico Moves to Counter Rebels : Chiapas: No armed clashes reported as government sends army to retake areas held by Zapatistas. President, citing a ‘climate of insecurity,’ devalues the peso.

With nearly a dozen towns in open revolt and dozens more infiltrated by armed Indian rebels and peasant supporters in Chiapas, the Mexican army on Tuesday sent a convoy of armored vehicles and hundreds of troops and riot police to tear down roadblocks, retake rebel-held territory and reassert the government’s tenuous authority in the southern state.

In a show of military force after a day of peaceful insurrection that rocked Mexico’s investment market and threatened the national economy, hundreds of soldiers and riot police cleared felled trees from highways and pulled down banners declaring “Welcome to Zapatista Territory.”

Citing a “climate of insecurity” that they attributed to the Zapatistas’ latest mobilization, President Ernesto Zedillo’s economic advisers announced after an all-night meeting that the government was forced to devalue the peso, effective immediately.

That extreme move forced the peso down 15%--bitter medicine for most Mexicans less than a week before Christmas--and underscored how Chiapas has become a critical test case with far-reaching implications for the new president.

There were no reports of armed clashes as the convoy moved through mountainous Chiapas. At least 11 of the 38 towns that the rebel Zapatista National Liberation Army claimed to have “liberated” on Monday publicly declared their allegiance to a parallel “government in rebellion,” which was set up last week by the state’s opposition leader, Amado Avendano. The populist newspaper publisher is regarded by the Zapatistas as the state’s legitimate governor.

Witnesses, local officials and news agencies reported that most of the armed rebels, dressed in the Zapatistas’ trademark ski masks and bandannas, appeared to have fled to surrounding mountains from positions they had occupied on Monday, including the town of Simojovel de Allende about 30 miles north of the city of San Cristobal de las Casas. The federal forces peacefully retook Simojovel Tuesday night, nearly 24 hours after local officials said the rebels had left.

Zedillo insisted in a speech in Mexico City on Tuesday that the army remained committed to its unilateral cease-fire. But in a clear attempt to turn public opinion against the Zapatistas and their charismatic leader, the president took the verbal offensive against the rebel group, blaming them for the nation’s deepening economic woes.

“This is a conflict that has caused too much anguish in all Mexicans, a conflict that has slowed down the economic recovery and has cast a shadow over the prospects for the country’s economic development,” Zedillo declared at a cultural engagement.

“It is a conflict that has slowed job creation, a conflict that has begun to cut into the Mexicans’ savings and threatens their fair aspirations for well-being, above all for the men and women of Chiapas.”

The president also indicated that his government may arrest and prosecute the Zapatistas, and not only for Monday’s actions. He said he had ordered the attorney general to investigate whether the rebels and their leader can be charged with federal crimes for any of their acts since they first rose up against the government Jan. 1.

But Zedillo reiterated that, after speaking to “all major political figures in the country,” he was standing by his commitment to negotiation rather than aggressive military action in Chiapas.

“Today, I reiterate my government’s determination always to search for avenues of dialogue and negotiation to resolve the conflict in Chiapas and any other place,” he said. “In this search, our patience never will be exhausted, even when confronted with the isolated acts of violence that have taken place in the last hours.”

In fact, there had been no reports of violence or clashes on Monday either, although it remained unclear whether the army would encounter opposition as it continued to move through areas the rebels seized the previous day. And so far, the worst impact of the Zapatista mobilization appeared to be in the nation’s economic markets.

The movements drove Mexico’s stock market down more than 4% on Monday, shocked financial communities in the United States and Europe and left political analysts in Mexico City increasingly concerned that the revolt could spread.

Similar chaos is brewing in several other Mexican states, where post-election opposition protest movements similar to the one that ruptured the Zapatistas’ 11-month truce in Chiapas have shut down oil wells in Tabasco and blockaded town halls in other states this week.

Zedillo’s handling of the Chiapas crisis, political analysts say, will help determine the future stability of Mexico.

Bolstering the president’s strategy to isolate the Zapatistas and turn public opinion against their leader, who uses only the nom de guerre Subcommander Marcos, are recent opinion polls showing Zedillo with strong popular support nationwide.

A weekly opinion survey by a Mexican pollster just before the Chiapas crisis erupted indicated that 84% of Mexicans supported Zedillo’s Cabinet choices, his proposals for sweeping judicial reforms, increased powers for the elected Parliament and a legislative peace commission for Chiapas; 58%--10% more than voted for Zedillo on Aug. 21--said their opinion of Zedillo and his new government was favorable.

But in Chiapas, one of Mexico’s most impoverished states, where a history of favoritism and ruling-party corruption spawned the Zapatista movement a year ago, the rebels still appeared to have widespread popular support.

* ECONOMIC MEDICINE: Mexico devalues pero 15%. D1