> > ----------------------------------------------------------------------------- > Copyright 1995 National Public Radio > NPR > > SHOW: Weekend Edition - Saturday ( NPR 10:00 am ET) > > January 14, 1995 > > Transcript # 1106-13 > > TYPE: Package > SECTION: News; International > LENGTH: 1073 words > HEADLINE: Analyst Reveals Prospects of Mexico's Economic Crisis > BYLINE: DENISE DRESSER > > HIGHLIGHT: > A political analyst of Mexico says that despite the financial crisis being > over, there is still the crisis of expectation and the crisis in political > leadership. The Mexican populace will be paying a high price. > > BODY: > SCOTT SIMON, Host: I'm Scott Simon and coming up on Weekend > Edition, the impact of Mexico's economic crisis on what had been one of the > hottest areas of investment - international markets. But first, only six > Saturdays ago, Mexican Political Analyst Denise Dresser [sp] spoke > with us about the prospects for her country as new President Ernesto > Zedillo took office. An earthquake of a kind has occurred since then - the > economic crisis that has sliced some 40 percent off the value of the peso > and 50 percent off the value of Mexican stocks. > We've asked Ms. Dresser back now. She's on leave from her post at Mexico's > prestigious technological University Eta [sp]. She joins us in our studios > here. Thanks for being with us again, Ms. Dresser. > > DENISE DRESSER, Political Analyst: Thank you for the invitation. > > SCOTT SIMON: As they say, first the news. The Mexican stock market > has rallied a bit, in part because the U.S. government was willing to > provide about $40 billion of loan guarantees, so the immediate crisis is > over but one would think hardly the effect in Mexico. > Help us understand what the impact there has been. > > DENISE DRESSER: Well, even though the immediate financial crisis is > over, I think the crisis of expectations and the crisis in political > leadership in Mexico remain. Over the next three or four > years, Mexicans are going to be paying a very high price. They've lost > 40 percent of their buying power. They're going to face, in all likelihood, > spiraling inflation. And, above all, there's a sense of collective despair > that Mexico has gone through so many economic adjustments over the > last 12 years and yet we're being asked to sacrifice one more time and it's > not clear that there will be a new recipe, a new formula that will finally > propel us into the first world. > > SCOTT SIMON: This was hardly the making of the new administration of > President Zedillo, but do you think that they might have acted more wisely in > meeting the crisis? > > DENISE DRESSER: I think there were structural problems that > determined the crisis, but it was probably exacerbated by Zedillo's lack of > political leadership. I think we're witnessing the economic manifestations > of political problems, of a technocratic team that came into power > viewing politics as a residual variable and haven't been able to market this > adjustment program to the Mexican people. I think in the next couple of > months, we're going to see severe problems, in terms of the political > management of economic adjustment in Mexico city. He was going to have > to keep the unions in line in order to maintain wages down and keep > inflation down. And given that there's a collective sense that Zedillo is > not someone who's in charge, it may be difficult to maintain controls over > disaffected and discontented groups in Mexico. > > SCOTT SIMON: Now, as you point out, President Zedillo is in the > position now of having to try and hold the line, or even reduce wages > among many labor union members, exactly at the same time many union workers > felt they were entitled to feel that wages would be expanded. > > DENISE DRESSER: Well, because President Salinas had created an > enormous sense of expectations about Mexico metamorphasizing into a modern > economy, and those expectations have been dashed. We're going to witness a > series of very difficult tensions, because Wall Street, > for example, asked for Finance Minister Jimasera's [sp] head. And Wall > Street got his head - he resigned. But at the same time now, Wall Street > is asking for the immediate resolution of the Chiapas crisis - in other words, > a military intervention - not because Wall Street thinks that this is > going to explode into national unrest, but because they believe it's the > only way in which President Zedillo can show political leadership. > > SCOTT SIMON: Now, when you say something like that, I must say I > haven't heard that. And I'm wondering if you've heard it, has it been > reliably reported somewhere? > > DENISE DRESSER: There was a conference at the Center for Strategic > and International Studies a couple of days ago where representatives from > Goldman Sachs and Merrill Lynch and the Wall Street Journal towed the same > line. What they're asking for is for a sense of someone being in > control of the reigns of a country that seems out of control > > SCOTT SIMON: But did they call for military intervention in Chiapas? > > DENISE DRESSER: Not in so many words, but I think it came across as > a very explicit demand. But at the same time, what's so paradoxical is that > these same people had been demanding democratization, decentralization, > transparency, accountability. And now, when there are problems, they > demand authoritative leadership. > > SCOTT SIMON: As I don't have to tell you, there are original opponents > of the North American Free Trade Agreement who feel richly ratified by > what's happened, and they have even less confidence that Mexico can be a > good partner in the free trade agreement because they say the United States > and Canada have to prop it up. Are the benefits for Mexicans of that > agreement immediately jeopardized? > > DENISE DRESSER: I think in the short term, we are all going to face, as > Mexicans, a very severe economic depression; living standards will go down, > inflation will go up. Many analysts are suggesting that the fundamentals of > the Mexican economy are fine, that it will take us a couple of > years to recover, but that we'll be in a much stronger shape after this. I > think, unfortunately, many negative stereotypes are resurfacing, and I'm very > concerned that this is generating an enormous amount of resentment towards > Mexico and that the U.S. should cut itself off from > NAFTA and just let Mexico sink. I think what this crisis has revealed is > the amount of interdependence that exists, that it's undeniable and it has > to be managed politically and economically on both sides of the border. > > SCOTT SIMON: Ms. Dresser, thanks very much for being with us again. > > DENISE DRESSER: Thank you. > > SCOTT SIMON: Mexican political analyst Denise Dresser. She's > working this year at the organization Inter-American Dialogue. > > > > > ====================================== > Harry Cleaver > Department of Economics > University of Texas at Austin > Austin, Texas 78712-1173 > USA > > Phone Numbers: (hm) (512) 442-5036 > (off) (512) 471-3211 > Fax: (512) 471-3510 > E-mail: [EMAIL PROTECTED] > ====================================== > > > > >
