1996-11-14 Local Press
Article Index
Summary of Local Press Clippings from Mexico
November 14, 1996, Credit Lyonnais Securities (USA) Inc.
DEMOCRACY
Elections Bring Significant PRI Defeats
On Sunday, November 10, elections were carried out in the states of Mexico, Coahuila, and Hidalgo. In the first two, voters elected mayors and representatives to the state Congress; in Hidalgo, they only elected mayors. The general trend in all three states was high levels of absenteeism, and significant losses for the ruling Institutional Revolutionary Party (PRI).
Of the 244 municipalities participating, the FRI is expected to have lost at least 68. Nevertheless, this would leave the FRI with about 45.9% of the vote, followed by the National Action Party with 32% and the Party of the Democratic Revolution (PIW) with 21.4%. In the state of Mexico, the PRI's hold on local elected offices fell from 97.06% to 48.9%; in Coahuila, it fell from 87% to 36.7%; and in Hidalgo it fell from 98.32% to 77.1% (Reforma, 10-12 November).
Explosion in San Juanico
Three gasoline storage tanks belonging to Mexican Petroleum (PEMEX) exploded in the center of the densely populated area of San Juan Ixhuatepec (on the outskirts of Mexico City in the state of Mexico) on Monday November 11. This happened precisely twelve years ago on November 19,1984 in the same place. The tanks that exploded held 33.4 million liters of leaded gasoline, which is the equivalent of95% of the daily consumption of leaded gasoline in the country, or 43.72% of total daily gasoline consumption. The pollution that results is likely to be the equivalent of an additional 3.34 million vehicles without any anti-pollution devices circulating in Mexico City. Huge black clouds of smoke passed over the city on Tuesday, as schools were told not to let the children out to play. Seven neighborhoods in surrounding seas were evacuated. The Red Cross reported four people killed and close to one thousand treated for intoxication or burns. PEMEX is facing strong criticism for jeopardizing safety in its cut-backs on maintenance and as part of its austerity program (La Jornada, 12 November).
Parties Can't Agree on Campaign Finance Issue
The Zedillo administration decided to send a second electoral reform bill to Congress without the consensus of the other three major parties. One of the key sticking points appeared to be the issue of public campaign financing. The parties have agreed to ensure public financing of campaigns, but while the FRI proposes it be a total of 2 billion pesos annually (about $240 million), the Pan proposes 1 billion and the FAN 900 million. (Reforma, 7 November).
ECONOMY
Government Delays New Pension System for Lack of Funds
The government decided to delay the full implementation of the new private pension system six months (until July 1997) due to a lack of money to put it into place. After preparing its 1997 budget, the government realized that it does not have the 35 billion pesos that would have been necessary to invest in 1997 if the program were to start as planned on January 1. It is rather ironic, because in pushing the new program in December 1995, the government said that it "is a necessity that can not be delayed" - arguing that it was the key policy tool that was supposed to increase domestic savings in Mexico. With the delay, the government will invest I 8.59 billion pesos into the new pension system in 1997 (instead of 35 billion). (La Jornada, 10 November).
Interest Payments
In 1997, 42% of the tax revenues received by the federal government, or 119.69 billion pesos (approximately $15 billion dollars) will go toward payments on the public debt. In real terms, this represents a 12% increase over the amount paid to service the debt in 1996. Meanwhile, tax revenues declined from 10.59% of GD? in 1994, to 9,5% in 1995, and 8.61% in 1996- (La Jornada. 11 November).
Businesses Respond to Economic Plan for 1997
In response to the announced economic program for 1997, business sectors called on the government to take measures to ensure that growth is more equally distributed among exporters and producers for the domestic market, and to review its trade strategy in order to end the disadvantages faced by Mexican producers. The groups complained of severe inequalities both among economic sectors and within them. Exporters are faring better than other sectors, but only a small percentage of the largest exporters are really benefiting. Micro, small and medium sized businesses have little or no access to export markets. Meanwhile, Hector Larios Santillan, the Coordinating Business Council (CCE) estimated that private investment in 1997 will reach 17 billion dollars, although domestic businesses are expected to face another difficult year. (El Pinanciero, 11-12 November).
Deficit in 1997
For the first time in five years, the government's proposed budget for 1997 anticipates a deficit- It is estimated to amount to 15.48 billion pesos, or 0.5% of ODP, which is estimated to be 3-09 trillion pesos (about $470 billion) in 1997- (La Jornada, 10 November).
El Barzon Plans National Protest as Non-Performing Loans Increase
Jose Quirino Salas, the president of the debtors' group El Barzon, announced that on November 19-20 more than 50,000 barzonistas from around the country will gather in Mexico City to demand an end to the federal government's "irresponsible" economic policy planned for 1997, and new programs for restructuring non-performing loans.
Meanwhile, Quirino reported that during September and October the overall portfolio of non-performing loans increased 28 billion pesos, which means it now surpasses 200 billion pesos (around $27 billion) -- which is still less than the 210 billion the government has spent on restructuring and rescue programs. According to El Barzon, during the past two months, close to 200,000 more Mexicans have entered the ranks of those who cannot service their debts. (La Sornada, 11 November).
Domestic Public Debt to Grow in 1997
In 1997, the federal government will incur a net internal debt of 34 billion pesos (around 1.1% of GDP) in order to finance its debt. According to the proposed budget for 1997, net total spending is estimated at 725.79 billion pesos, while federal government revenues are expected to reach 694.9 billion, which means a deficit of 30.89 billion pesos. The government intends to defer payments of approximately 15 billion pesos, reducing the deficit to only 15.89 billion, or .5% of GDP. In fact, the deferred payments correspond to expenses from 1997 that will not be paid until 1998. (El Financiero, 12 November).
Courts Find in Favor of Debtor
On November 5, the Superior Court of the Federal District unanimously ruled in favor of a debtor who used Bancomer for charging "excessively burdensome" interest rates on his mortgage. The debtor, Carlos Chaim Sanchez, filed the suit charging that his monthly interest charges on his mortgage increased from 22.13% in 1995 to 85% 1995. The court found that, although the mortgage was taken out with a floating interest rate, the enormous increase surpassed what could have been expected "in good faith". Therefore, they ordered Bancomer to reduce the excess yields by 50%. Tens of thousands of other debtors in Mexico City find themselves in similar conditions, and can be expected to follow Chaim's lead- (Reforma, 6 November).
CHIAPAS
COSEVE Finally Established
After almost nine months of negotiations and conflict, the Commission for Follow up and Verification (COSEVE) of the peace accords signed in San Andres Larrainzar between the Zapatista Army for National Liberation (EZLN) and the government has finally been established. In the opening ceremony, representatives and invitees of the EZLN emphasized that "the road to peace is through dialogue", while Bishop Samuel Ruiz said that the installation of COSEVE is "an achievement, and it will be a challenge." The government noted that the incorporation of members of civil society on the commission is designed to ensure a reconciliation among Chiapas society. (La Jornada, 7 November).
Peace Talks Renewed
Two days after the installation of the COSEVE. the peace talks started up again: this time to address the internal political problems Chiapas faces. For the first time since the government and the EZLN began the dialogue, local political problems are being discussed. Also for the first time, members of the PRI and the PRD are participating in the dialogue. (La Nomad a, 9 November).
Violent Expulsion in Chiapas
In the town of Laja Tendida in the municipality of Venustiano Carranza, a group of corn producers who had blocked the highway demanding an increase in the price they are paid for their corn, was attacked on Saturday by police and army forces. Two helicopters dropped tear gas on them, as ground forces shot and beat the residents, Three people were shot to death by the police forces and many more wounded. A dozen people disappeared. One of the people killed was Angel Ramirez Coello, a 24 year old father of a one month old baby. His wife said at his funeral, "we are very poor and we were only asking for a better price for our corn, but the government responded with bullets-" The corn producers were members of the Council of Corn Producers of Chiapas, an organization that represents close to 50,000 producers in 15 municipalities of the state. The government claimed that the peasants were "vandals" who had illegally blocked the highway. (La Jornada, 10 November).
Death Threats to CONPAZ
The Coordinator of Non-Governmental Organizations for Peace (Conpaz) in Chiapas, said that its members have once again been receiving death threats. In a taped anonymous phone call, the names of at least 28 people were mentioned, saying that "they are all going to start to die, and where it harts most: the children." One of the people mentioned, Javier Lopez, disappeared along with his wife, Eva Lara, and their two children for two days. They later appeared after having been kidnapped and beaten, saying that their kidnappers threatened them with death if they denounced them. In response, members of Conpaz and other organizations organized a march through the streets of San Cristobal, to demand that the federal and state governments investigate. (La Jornada, 7 November).