1996-10-17 Local Press

Summary of Local Press Clippings from Mexico

October 17, 1996, Credit Lyonnais Securities (USA) Inc.

DEMOCRACY

Remains of a Cadaver Found on Salinas Ranch

On Wednesday, October 9, police from the Attorney General's office (PGR) dug up the remains of a cadaver on a ranch belonging to Raul Salinas in Mexico City. The remains are believed to be those of Manuel Munoz Rocha, the PRI Congressional Representative who has been missing since days after the assassination of former FRI leader Francisco Ruiz Massieu in September 1994.

Munoz Rocha is suspected of masterminding the murder along with Raul Salinas. Authorities report that they were led to the cadaver by an anonymous note.It will be a few weeks before specialists are able to determine if the remains are actually those of Munoz Rocha. However, what is known so far is that it was a male between the ages of 40 and 50, about 5 ft 6-- which fits his description. The cause of death appeared to be a strong blow to the head.

Raul Salinas issued a statement in which he accused officials of the PGR of planting the corpse in order to frame him for the murder. Indeed, there are widespread doubts as to the legitimacy of the "finding". The cranium had been surgically cut, providing evidence that the body had already been through an autopsy. The PGR vigorously denied Raul's claims, saying that "the era in which the PGR plants cadavers has passed." (La Jornada, 10-14 October).

EZLN Commander Ramona Attends Indigenous Congress.

After weeks of debate about whether the Zapatistas would send representatives to the Indigenous Congress in Mexico City, Zapatista Commander Ramona was sent to represent the Zapatista Army of National Liberation (EZLN). Ramona had not been seen in public since March 1994, during the very beginning of the peace talks. According to Sub-commander Marcos7 Ramona is "the most belligerent, aggressive and intransigent arm of the EZLN." The government had warned the Zapatistas that they were not permitted to leave Chiapas and that 'the law would be applied to them' if they did. After two days of negotiations, however, it was decided that Ramona, who is suffering from cancer, would go. Marcos clarified that the EZLN "didn't ask permission" they simply asked the Congressional Mediation Commission to facilitate her trip.

In her message to the thousands that gathered in the central plaza (Zocalo) to celebrate the day of "La Raza" on October 12, Ramona said, "We came here to yell, along side all of you, that no more, never again a Mexico without us!" Ramona, who speaks very little Spanish, read a communiqué from the Zapatistas after speaking in her native tzotzil. Later, the EZLN announced that Ramona would stay in Mexico City for a month or two to receive medical treatment, including possibly a kidney transplant. A group of volunteer private sector doctors is attending to her, since the Zapatistas said they do not want the government involved. (La Jornada, 13-15 October).

Over 600 delegates to the Indigenous Congress agreed to a "unity pact" in order to promote profound legislative changes. In addition, they called for a new constitution; the demilitarization of the country; and the reopening of the Conasupo corruption case in Congress. (La Jornada, 12 October).

Hunger Strike to Protest Conasupo Cover-zip

PRD Congressional Representative Victor Quintana began a hunger strike on Tuesday, October 8 to protest the PRI'S decision to close the Congressional Commission investigating corruption in the state staples company, CONASUPO. He was later joined by Manuel Ortega, from El Barzon. Quintana, a member of Equipo Pueblo and of the Democratic Peasant Front (Frente Dernocratico Campesino) in Chihuahua said he had little hope that his hunger strike would result in the re-establishment of the Commission, but said the purpose of the strike was to get Mexican society to stand up and oppose corruption. He announced that he would stay on strike until he had collected 10,000 signatures against corruption in Mexico. One week later, the strike was ended after collecting around 50,000 signatures from Mexican citizens calling for the Commission to be reestablished and calling for an end to corruption. Quintana and Ortega also received a letter of support from US Representative Bernie Sanders (I-VT). (La Jornada, 10-15 October).

Final Results in Guerrero

The final count in the October 6 elections in Guerrero resulted in 53 municipalities controlled by the Institutional Revolutionary Party (PRI), 19 controlled by the Party of the Democratic Revolution (PRD), two for the Revolutionary' Workers Patty (PRT) and one for the National Action Party (PAN). The state congress will continue to be controlled by the PRI (30 seats), while the PRD holds 12 seats, the PAN 2, PT 1, and the Cardenista party 1. Irregularities in the elections have led to PRD protests in at least three municipalities. however. Electoral officials and party leaders agreed that in at least four municipalities with very close votes, each urn will be recounted. (La 3ornada, E4 October).

ECONOMY

"Compromise" on Petrochemical Issue.

After the PR' National Congress rejected the privatization of the petrochemical industry two weeks ago, government officials scurried to find a way of pleasing both private investors and their political base. The new rules, announced on October 13, will only allow 49% private ownership (domestic or foreign) of existing plants, while maintaining public control over 51%. However, new petrochemical plants will be allowed to open after January 1, 1997 with 100% private capital. (La Jornada, 14 October).

Privatization of Pension System Begins

With the publication of the regulatory framework for the System of Savings for Retirement (SARs), the government formally initiated the privatization of Mexico's pension system, whose assets amount to more than 74 billion pesos (about $10 billion). Foreign investors will be allowed to control up to 49% of pension plans. (El Financiero, 11 October).

Peso Falls, But Still Overvalued

The. value of the peso fell to its lowest level since December 1995 on Friday, reaching 7.75 pesos to the dollar after falling 0.65% with respect to the day before. The drop was the result of a strong demand for dollars, following a day of intense speculation, and following the slight increase in 30 year US Treasury bonds from 6.828% to 6.884% Nevertheless, economic analysts still insist that the peso is overvalued, and that Mexico is once again in a very risky situation. Although inflation has surpassed 20% so far in 1996, the peso has remained fairly steady around 7.5 to the dollar. There is reportedly tension between Finance Secretary Guillermo Ortiz and the Central flank because Ortiz wants a free floating currency, while the Bank has intervened in currency markets to ensure the stability of the peso. (La Jornada, 12 October; El Financiero 11 October).

Unspoken Costs of NAFTA

According to the Mexican Action Network of Free Trade (RMALC), one of the costs of NAFTA that the government doesn't like to talk about is the 4.2 billion pesos (about $560 million) per year that Mexico has stopped receiving in tariffs on imports from the US and Canada. According to RMALC, this is the equivalent of the federal government's budget for urban development, ecology and potable water. (La Jornada 13 October).

Industry Imports More than it Exports

Leaders of the National Association of Importers and Exporters or the Mexican Republic (ANIERM) of the National Council of Foreign Trade (Conacex) warned of a renewed risk of a severe trade deficit, now that imports are rapidly increasing and exports can't keep up. The two noted that after 2 years and 9 months of NAFTA, 57% of manufacturing industries in Mexico import more than they export. In addition, manufacturing sales continue to be concentrated in the same sectors and businesses as before NAFTA took effect. (La Jornada, 12 October).

Inflation Surpasses Official Estimates

During the first nine months of 1996, inflation reached 20.39%. This means that the official estimate of 20.5% for all of 1996 will be significantly surpassed, since during the last quarter of the year there is always more pressure because of increased economic activity and end of year bonuses. However, inflation has been reduced by about half since its rate of 40.73% registered during the first nine months of 1995. (La Jornada, 10 October).

1997 Budget: Continued Austerity

The Secretariat of Finance (SHCP) announced that it will continue its austerity program in 1997, but that the projected federal budget will surpass 400 billion pesos (about $53 billion). SHCP said that spending in 1997 will prioritize social well-being, basic infrastructure, combating extreme poverty, education, health and "restructuring" subsidy programs, while cutting back on administrative costs. Of the total, 215 billion is expected to be channeled to social development; 95 billion for education; 82 billion for health and social security; 2 billion for labor; 18 billion for regional and urban development; and 9 billion for social and nutrition programs. (El Financiero, 13 October). (Ed. note; critics argue that the manner in which The government calculates its expenditures tends to exaggerate social spending).

CHIAPAS

Talks on Re-initiating Dialogue in San Andres

The Zapatista Army of National Liberation (EZLN) will begin meetings with the Congressional Mediation Commission (Cocopa) and the National Mediation Commission (Conai) in San Cristobal de las Casas on Wednesday, October E6 to discuss the necessary conditions for re-initiating the peace negotiations. While this is a positive sign, Bishop Samuel Ruiz Garcia, the President of Conai, warned that this would not be the only nor the definitive meeting before reestablishing the talks. Sixteen Zapatista Commanders and Sub-commander Marcos will attend the meeting, along with members of Cocopa and Conai. The government will not participate. The agenda is expected to include the five "minimum conditions" that the EZLN laid out in order for them to return to the dialogue. Bishop Ruiz said he expected the meetings to last a few days. (La Jornada, 15 October).

Larrainzar Mayor Forced to Resign.

A group of 2,000 members of the Pin in San Andres Larrainzar (the location of the peace talks with the EZLN) "detained" the PRI mayor Marcos Hernandez Lopez and the trustee Agustin Lope Gomez and forced them to sign letters of resignation. The two men were held tied up in the hallway of the municipal building for approximately nine hours. Before releasing them, the group destroyed the offices of the municipal government. The situation remains tense, as negotiations between the EZLN and Cocopa are set to begin. (La Jornada, 14 October).

Threats and Graffiti in San Cristobal

Overnight, the graffiti on the walls of the prep school located one block from where the EZLN commanders will be staying during the upcoming meetings with Cocopa and Conai was completely changed. On Sunday, the graffiti included demands for free transit for Zapatista leaders and freedom for political prisoners accused of being Zapatistas. On Monday, the same wall carried very different messages: "Out with Marcos and the whore Ramona"; "Marcos, we’ve got our eyes on you"; and "Death penalty to the traitor Elorriaga" [Zapatista advisor and former political prisoner). (La Jornada, 15 October).

Investment in Chiapas

According to the Secretariat of Social Development (SEDESOL), this agency has invested more than 8 billion pesos (over $1 billion) in Chiapas this year. This represents 65% of the total of 12.695 billion pesos budgeted for Chiapas this year. (La Jornada. 11 October).

This report was prepared by Credit Lyonnais Securities (USA) Inc. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. Returns set forth in this report are estimates based on internal assumptions, and any changes in these assumptions may have material impact on such estimated returns. This is not a solicitation or any offer to buy or sell securities. We, our affiliates, and any officer, director or stockholder or any member of their families, may have a position in and may from time to time purchase or sell any of the above mentioned or related securities.

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