Mexico's Emergence as a 'Latin Dragon'


Mexico City. -- Although most Americans haven't yet noticed, one of the biggest revolutions yet in Latin America's history is going on in Mexico -- without a gun being fired.

This revolution is economic, and its main objective is to bring Mexico fully into the global economy. The ratification of the North American Free Trade Agreement will give this revolution a great boost, but that agreement is not the whole story: President Carlos Salinas de Gortari, an economist, has already taken his country far along a new, and probably irreversible, path of change.

His policies have broken Mexico loose from its long-standing protectionist and collectivist tradition. In the past few years it joined the General Agreement on Tariffs and Trade, slashed import tariffs that had run as high as 100 percent, eased restrictions on foreign ownership, and sold off hundreds of government-owned businesses.

In a privatization binge the equal of anything in Eastern Europe, Mr. Salinas has disposed of the state-owned telephone company, heavy industries, banks, insurance companies, food distributors, airlines. Mobilizing social forces to check inflation, the government negotiated wage and price stabilization pacts with representatives of labor, agriculture and business.

Inflation, which was running over 100 percent in 1987 and 1988, is down under 20 percent. The government is preparing to lop three zeros off the shattered but now stable peso, and unveil a new peso that will be worth (at current rates) about three to the dollar instead of three thousand.

U.S. investment has doubled since 1985, and U.S. exports to Mexico have nearly doubled as Mexican consumers snap up American goods, from fast foods to auto parts. Mexico, at the same time, is exporting more manufactured goods.

The boom hasn't reached everyone: In terms of real buying power the minimum wage has declined, and millions of Mexicans are living in abject poverty. But the evidence of a real recovery is overwhelming. Probably the most-quoted statistic is that for the past three years Mexico's economy has grown faster than its population.

One of the most striking -- and important -- facets of Mexico's current modernization push is the emphasis on the environment. The rhetoric of "ecologia" is now a central part of the public dialogue. Environmental organizations have proliferated. No day goes by without environmental stories in the newspapers, environmental speeches by the politicians. The government has, a time of general budget tightening, vastly increased its spending on environmental protection, and has stepped up enforcement of environmental laws and regulations.

Changes of attitude, even changes in public policy, don't immediately translate into breathable and drinkable results -- the levels of air and water pollution in Mexico are among the highest in the world. But if Mexico can industrialize and "go green" at the same time, it will tell the world a lot about the possibilities of making the "sustainable development" slogan a reality.

The economic recovery is also precarious: Any number of things -- a deepening global recession, a resumption of high inflation -- could send the country into another tailspin. Then, too, there's the question of whether Mexico can open up its economy without opening up its political system as well. Although the country's dominant political organization, the Institutional Party

of the Revolution, is now threatened from both the right and the left, and has lost its dominance in some parts of Mexico, it still holds a death grip on the federal government.

If the North American Free Trade Agreement announced this week is ratified, it could reinforce that grip. Some of President Salinas' detractors fear that, wrapped in the success of his economic programs, he may try to have the constitution amended so he can run for a second six-year term.

At the same time, as Mexico finds itself in an ever closer economic, political and social union with the United States and Canada, undoubtedly there will be new pressures on Mexico -- from its North American partners and from the global economy -- to become a genuine democracy.

All this points toward Mexico becoming a different kind of country, in a different kind of world. It is leaving the family of undeveloped Third World countries for the smaller circle of industrial powers, and threatening to become a competitor in international markets. An article in the Far East Economic Review referred to Mexico as an emerging "Latin Dragon" whose growth may pose a danger to the economic powerhouses of Asia. As it becomes a global economic player, it is also assuming a new role of leadership in Latin America.

To those who cling to the old notion of Mexico as the land where nothing gets done -- or gets done right -- it seems almost unthinkable that the country could be on the verge of assuming such a role. It is as surprising as the thought was a few decades ago that Japan -- that shattered little country where they made all those tacky products -- could ever become one of the world's richest and most powerful nations. But if one country that we thought we knew could surprise us, so can another.

Walter Truett Anderson wrote this commentary for Pacific News Service.

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