PLATFORM : Mexico: ‘Once a Market Opens, It Is an Irreversible Tide’

Turmoil in Mexico continues: In recent days, both the peso’s value and the stock market have hit new lows, boosting fears of a recession. A guerrilla war simmers in the state of Chiapas, adding to political and economic uncertainty. LORENZA MUNOZ talked to local investors, activists and academics about the implications of these events on U.S.-Mexico relations.

ALLAN RUSSO

Vice president, Gold Peak Corp., exporter of sound and electronic equipment, San Fernando Valley

The next few months look pretty bleak. The major factor is that the devaluation of the peso has been so steep that the market cannot afford it. At one point, 40% of consumers in Mexico could afford my products; now only 15% can.

But history shows you that once a market opens up, it is an irreversible tide. You cannot go back. It is just going to be tough right now, but Mexico is not going to go away. There will always be consumers there.

Mexicans are very hard-working people, very dedicated. They will come through all of this. It will just be very hard for a few months.

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ABRAHAM LOWENTHAL

Director, Center for International Studies, USC

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After so much angst and anger about Proposition 187, the most striking thing is that it will be seen as a mere footnote in comparison to this huge economic crisis.

Those people who supported Proposition 187, wanting to reduce the amount of pressure of immigration from Mexico to California, thought the initiative would reduce the incentive for migration. But the incentives for migration have been greatly expanded by the economic crisis.

It is strange to see people who supported Proposition 187 lobbying against the financial aid package to Mexico. Those are totally inconsistent positions. You cannot discourage immigration to California without improving the economic situation in Mexico.

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BRUCE KARATZ

Chairman and chief executive, Kaufman and Broad Home Corp., Los Angeles

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Short-term, I believe any U.S. company doing business in Mexico, or anyone with money invested there, has got to evaluate their exposure. We hope toinaugurate Los Robles, our first new-home community (in Mexico), located near Mexico City, soon. But the recent events have caused us to put the project on hold and reassess our strategy.

Long-term, I believe the basic, positive fundamentals of the Mexican marketplace will outlive this crisis. The demand for housing in Mexico is substantial, and the market opportunities are outstanding.

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DOLORES HUERTA

Co-founder and vice president, United Farm Workers

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All of us have to support President Clinton’s plan to help Mexico out of this crisis. We need to help Mexico because we have been the beneficiaries of Mexican labor. We would also benefit from a strong Mexican economy. Mexicans are going to have to invest in their infrastructure, just as we do.

For agribusiness to use this crisis to manufacture a labor shortage or create a bracero program is preposterous. You have double-digit unemployment in California’s agricultural community right now. There is no need for additional farm workers. The Mexican government must also sit and negotiate with the people in Chiapas.

Mexico is going through a period of change; things always go through a period of chaos initially.

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FATHER MIKE KENNEDY

Dolores Mission, East Los Angeles

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In the last two weeks, I have seen a great interest among the congregants in helping out the people in Chiapas. They have decided to raise money for the church there. It is so nice to see that the poor don’t get lost in their own suffering and find the gift of generosity. I find it refreshing that the poor here are reacting to the needs of the people in Chiapas.

Since most of the people still have family in Mexico, they know that their lives have significantly changed (with the economic crisis). They are feeling the burden of sending more money down there.

In terms of border control, the situation is going to get more critical, so people are going to be coming over here. Hopefully, this Proposition 187 climate will not get worse.