COLUMN ONE : Peso Crisis: Bitter End to Dreams : Mexican currency's collapse has put life on hold. Rich and poor alike complain of delayed plans and making do with less. People who still have a job feel lucky.

TIMES STAFF WRITER

For Cecilia Ortega, 1994 was a year of hard work and great hope; 1995 would be the year of dreams fulfilled.

At 24, she and her boyfriend had saved enough money to marry. They would have two salaries, a tidy nest egg "and finally, we could afford to start a life together." They set the date for early spring.

"But then the crisis came, and the savings we counted on lost their value," Ortega recalled. "In other words, everything we had went up in smoke."

Like thousands of other young couples throughout this country, Ortega and her boyfriend were forced to call off their plans when Mexico was gripped by its worst economic crisis in a decade.

"Now, all I can think of is to double my work," she concluded. "At the end of the day, that is the only thing left for us Mexicans now."

Lives ruined. Dreams shattered. Opportunities lost. That is the human face of the crisis that started with the radical devaluation of the peso two months ago and appeared--to outsiders, at least--to end late last month when President Clinton unveiled a $50-billion international credit package to bail out the Mexican government.

For most Mexicans, the crisis is not over. It has just begun, and already it has torn deeply into the fabric of their lives.

It has shattered Mexico's upwardly mobile middle class, eliminated jobs, compounded family debt and frozen millions of lives in place.

For the rich, the crisis has meant no more ballet lessons, private schools, new cars.

For the poor, it has cut into meat and milk at mealtimes.

In the two months since a crisis of confidence in President Ernesto Zedillo's new government detonated into the economic emergency, the nation's capital--the world's largest city--has become a kaleidoscope of pain, anger and frustration.

Crowds of newly unemployed gather throughout the day at the gates to the city's main Metro station and at key government buildings and corporations that have been forced to lay off thousands since late December. Arms folded, they shout for work and insult executives who make their way through the crowds.

At the iron gates of Zedillo's official Los Pinos residence, French perfume hangs heavy in the air every Thursday afternoon. Carmen Romano de Hevias, wearing Chanel sunglasses and shouting the angry new slogans of the upper class, has led hundreds of wealthy women here in a weekly protest of economic policies they say are rapidly making all Mexicans impoverished. During one demonstration, the women clashed with riot police while their maids held their protest signs.

In far larger and grittier protests, tens of thousands of angry peasants and factory workers have marched down the city's main boulevard, Paseo de la Reforma, hoisting massive banners calling for a new national economic order and demanding help for the growing numbers of unemployed and poor. Their audience works in the glass-and-metal office towers that line the boulevard and house the capital's powerful elite.

Each protest has ended in a human sea of anger in the Zocalo, the city's main plaza, which abuts the presidential palace.

In the Central Historical District that surrounds the Zocalo, a lower-middle-class bastion that has become a melting pot of Mexican society, stories of the new poverty changing so many lives are as common as higher price tags and going-out-of-business signs.

Edgar Davalos Ibarra manages Rose's Decorations, a shop that imports raw materials for wedding decorations, parties and other festive occasions that are fewer and farther between.

His prices are up 45%, sales are down 20%, and he was forced to lay off 20% of his staff--19 people out of work in a city where few are hiring.

"It's very painful to take away jobs in these times, but it was that or everyone's job," said the 27-year-old Ibarra, who has felt more than a pinch in his personal life as well.

His wife is three months pregnant and out of work. When the peso lost a third of its value almost overnight, simultaneously boosting interest rates, the burden of his home loan increased 30%. With the economy in turmoil, all loans were immediately adjusted to the new rates, and he pays 50% of his frozen salary in interest.

At a silk-flower shop around the corner, 22-year-old manager Daniel Castro recently was told not to come to work after the middle of this month. The shop's rent had doubled overnight, the price of the flowers imported from China jumped 70%, and sales dropped through the floor. But threatened with closure and with no prospective tenants, the building owner was forced to scale back the rent increase.

The shop now plans to remain open another year, and Castro, once full of hope, is happy to have a job.

"Most of my friends have been laid off. They're managers like me, but these days the owners are doing the job themselves," he said. "I'm relieved, but that's about all. I can't afford any luxuries, marriage--nothing but food. And my friends? Many are thinking about leaving the country."

The pinch is also felt in the middle-class and wealthy suburbs outside the downtown area.

Jesus Velasco, an economics professor, stopped building a new home last month and started holding his breath. He had broken ground in early December with a short-term loan that comes due in a month. If interest rates hold at present levels, he will be spending 9,000 pesos of his 13,000-peso monthly income (a salary equivalent to almost $2,200) on interest.

"If the economy recovers fast, we'll be OK. If not, I have no idea what I'm going to do," he said.

And the poorer of the poor have stopped looking toward the future. Many may now be looking north--for work, legal or illegal, in U.S. border states.

U.S. government analysts say the Mexican crisis is likely to translate into an additional 500,000 illegal immigrants crossing from Mexico into the southwestern United States this year.

Calling for short-term sacrifice, Zedillo, backed by the U.S. government and the international agencies that have advanced his government $50.76 billion, insists that the crisis will end by the second half of this year.

The loans, he said, will solve a liquidity crisis that has left Mexico's treasury with $3.5 billion--one-tenth of what it had a year ago--and the average Mexican with a third of the disposable income he or she had six weeks ago.

Zedillo has also pledged government sacrifices--an austerity program eliminating bureaucratic luxuries and budget tightening--to cut as much as $100 million in public spending.

Exempt from those cuts are large subsidy and welfare programs for the nation's poor. Wage increases have been capped at 7% and prices on domestic products "at reasonable levels."

But many businesses already have hiked prices well beyond those levels, and most Mexican analysts agree that the new credit package is not likely to solve the personal financial crunch for most citizens in the short term.

Some predict that the crisis could continue through Zedillo's six-year term, and nearly all declare 1995 a write-off and say next year will be little better for the average Mexican.

The crisis has even begun to change the face of Mexico's political landscape. In the historic state of Jalisco on Sunday, voters in state elections rejected Zedillo's long-governing Institutional Revolutionary Party for the first time in 66 years, many citing the economic crisis as their reason.

Store clerks, street vendors, cab drivers and business people interviewed in Guadalajara, Jalisco's capital and Mexico's second-largest city, said soaring interest rates and the growing gap between wages and prices helped determine how they cast their ballots.

Typical was Catalina Ventura, a 37-year-old mother of two who works for a minimum wage of about $20 a week as a salesclerk in a ceramics store. Asked why she voted for the conservative, opposition National Action Party, Ventura said: "To provide more opportunities to work, to improve the schools, but mostly for higher wages, lower taxes and hopefully a healthier economy."

In his stark upstairs office at Rose's Decorations, owner Eduardo Lopez agreed with that assessment, expressing the disaffection of many Mexicans.

"At the moment, there's . . . depression in Mexico. The problem in this moment is there's just no money in circulation. There are no jobs," he said. "But it's more than the devaluation that's making people hold on to what little money they have. People are tired of so many lies.

"All last year, this government campaigned with the slogan, 'For the welfare of the family,' " he said, "and immediately after they take over, we have our worst economic crisis. For us, the people, it's like being told to run two kilometers, you run the two kilometers and they tell you to run two more. People are just sick and tired of it."

In this proud nation driven by half a decade of hope, private schools are losing an estimated 15% of their students as parents are forced to transfer them to free public schools. In a real-estate market flooded with available apartments and houses, desperate owners compete for tenants.

No government agencies appear to be tracking these trends. There are few statistics to quantify them.

But one informal effort to monitor the impact of the miracle-turned-nightmare has had extraordinary results.

A few weeks after the crisis began, as the nation prepared for Christmas, Mexico City's independent, often-irreverent newspaper Reforma launched a column, "Facing the Crisis." It is a write-in feature that has generated a torrent of first-person testimony from average Mexicans such as Cecilia Ortega, who overcame her culture's strong sense of privacy and told of her pain in the column.

"Unfortunately, the response has been very good," said Maria Luisa Diaz de Leon, an editor who said she has received hundreds of horror stories by mail and fax since the column started.

Jose Juan Rodriguez, 33, a taxi driver, said sheer frustration moved him to share his story with the city. Like Ortega, Rodriguez also had great hopes last year. He wanted a better life and worked double shifts to finance it. But now he is watching his income slip away.

Like store manager Ibarra and most of the city's emerging middle class, Rodriguez bought into former President Carlos Salinas de Gortari's promise of an "economic miracle."

Salinas revolutionized the Mexican economy in his six years in office with free-market reforms he said would propel hard-working Mexicans into the First World, through increased production, credit financing and consumption.

So, like many, Rodriguez borrowed heavily to buy his new Volkswagen Beetle taxi and a new apartment, filled his home with imported modern conveniences and put two sons in a better school.

In December, after five years of interest payments, "it seemed like I was about to get out from under it all" when the bottom fell out.

"Suddenly, the 600 pesos I was paying each month in interest went up to 1,000, and now I am just trying to get through it," he said.

This credit crunch is perhaps mind-boggling for Americans who flinched when mortgage rates recently topped 9%. A typical credit card in Mexico, in effect, charges 100% annual interest. Bank loans for cars or furniture start at 60%. Department stores are offering an average of 80% financing.

Compounding the crisis is an increase in street crime and delinquency, said Francisco Gonzalez Garza, president of Mexico's private National Parents Union. Fueled by increased frustration, poorer neighborhoods have become tinderboxes for urban unrest, according to human rights officials and social workers.

That threat has even spread to the wealthiest suburbs. It has changed the face of virtually every one of the city's glittering new malls, where the shoppers who filled them seeking Armani suits and Apple computers during last year's credit-driven heyday have been replaced by large reinforcements of gun-toting security guards.

* MARKETS TUMBLE: Mexican peso and stocks fall sharply amid uncertainties. D1

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