MEXPAZ: Mexico Update #145 10/27/97 Via NY Transfer News Collective * All the News that Doesn't Fit source: MEXPAZ_information MEXICO UPDATE #145 October 27, 1997 Produced by Equipo Pueblo Dear Readers, We apologize for the delay in sending out this Update. The person in charge of writing the news summaries was out of town. This Update covers the period from October 16-22. We will send Update #146 on Wednesday, October 31. ____________________________________________________________ This version of the Mexico Update contains four sections: Hurricanes;Politics/Democracy; Human Rights/; Justice and Economy/Trade. Comments welcome; e-mail: pueblodip@laneta.apc.org Or by fax (52-5) 672-7453. ____________________________________________________________ HURACAN PAULINA President Zedillo suspended the state of emergency in the regions affected by hurricane Paulina and announced the beginning of the stage of "Productive Reconstruction." According to the Secretary of National Defense, a total of 217 deaths have been confirmed in the states of Guerrero and Oaxaca. Numerous communities continue without assistance and dozens of people are still reporting missing, meaning that the number of dead will likely increase. There are concerns about potential epidemics breaking out, after numerous cases of cholera and malaria have been reported. Authorities estimate that they will invest $430 million pesos to repair highways, water systems and electricity over the next couple of months. The Mexican Confederation of Coffee Producers announced that losses of their crops in Oaxaca amounted to approximately $80 million dollars as a result of the hurricane. Some 55,000 producers and 80,000 hectares have been affected in the state. (La Jornada/Reforma, 15-20 October) DEMOCRACY/POLITICS Elections in Veracruz and Tabasco On October 19, state elections were held in Veracruz and Tabasco. The enormous contrast between the electoral conditions and results in the two states is illustrative of the unequal progress on the democratic front. In Veracruz, where 210 municipalities were at stake, the elections were carried out in peace and the results reflect the growing tri-party nature of Mexican politics. The PRI won close to 40 percent of the vote, the Party of the Democratic Revolution (PRD) won 30 percent (including the capital of Jalapa), and the National Action Party (PAN) 20 percent (including the port of Veracruz). Although the PRI won a greater share of the votes, the two opposition parties carried the major cities. In Tabasco's mid-term elections, however, in spite of the fact that the PRD won 42 percent of the vote (and the PAN 4 percent), the PRI carried all 18 congressional districts and 17 mayoral races. Opposition parties have charged fraud in the Tabasco elections, and the PRD announced that it would seek to put Tabasco governor Roberto Madrazo on political trial in the federal Congress. The computer system "went down" during the vote count, and there were numerous incidents of intimidation of voters and vote buying. In addition, the PRD has complained about a cover story by the magazine Huellas with a photo of PRD president (and Tabasco native) Andres Manuel Lopez Obrador entitled: "Lopez Obrador : murderer. He murdered one of his brothers, he's a child rapist, unscrupulous, slacker..." (La Jornada, 20-21 October) Opposition Will Continue to Work Together After a public dispute over the level of cooperation between the PRD and the PAN in Congress, the presidents of the two parties met and agreed to continue to work together in order to promote the political and economic modernization of the country. However, on certain issues of economic policy, the PAN made it clear that it would not maintain its alliance with the PRD. More divisions will certainly arise as the budget debate heats up, and the alliance will really be put to the test. (Reforma, 22 October) HUMAN RIGHTS/JUSTICE Jaguars Eliminated The Secretary of Public Security in Mexico City, Enrique Salgado, announced the elimination of two elite police squads, the Jaguars and the Foxes, which have been implicated in recent criminal acts. Members of the Jaguars were recently arrested on charges of murder, following a raid in a crime-ridden Mexico City neighborhood. Six young people disappeared following the raid, and were later found dead. There is now evidence that it was the police who executed them and dumped their bodies on the outskirts of the city. Although Salgado recognized that the units had damaged the image of the police, he insisted that these extra-judicial raids are necessary for fighting crime. (La Jornada, 18 October) Victory for Labor The independent labor confederation the Frente Autentico de Trabajo (FAT) won the recent elections in the Korean maquiladora Han Young in Tijuana. Bertha Lujan, coordinator of the FAT, said that the case sets a "positive precedent" since the company and labor officials accepted the will of the workers to change their union representatives. This is a historic victory for independent labor organizers in Mexico. Tension in La Realidad One week after the installation of a new army camp along the Euseba river, the residents of the neighboring Zapatista community La Realidad are expressing their fears and seeking to get it removed. There are about 500 army troops in the camp and residents say that they have told local peasants that they have no plans to leave and that they are there to "take over La Realidad." (Sipro Update/La Jornada, 15 October) Scottish Priest Returns After four months of pressure and the intervention of the Vatican, Mexican migration officials agreed to allow the Scottish priest Henry McCowling to return to Chiapas (after being expelled). (Sipro Update/La Jornada, 21 October) Zedillo Reigned In The Chamber of Deputies agreed to condition President Zedillo's future trips abroad on his prior justification of the trip to the Chamber, which would have the right to modify his agenda. The decision comes on the heels of Zedillo's controversial visit to Europe two weeks ago, in which he engaged in a public dispute with human rights groups in France and signed an agreement on investment with Germany which many legislators were not informed of ahead of time. Bank Robberies on the Rise Bank robberies are the third most common crime in Mexico and the vast majority of them are never solved. As of September 30, 395 bank robberies had been committed this year, and the assailants were caught in only five of these cases. In the other 390 cases, approximately 115 million pesos (about $1.6 million) were stolen. The Federal District, Jalisco, Baja California Sur, and Chihuahua lead the list of bank robberies this year. Zedillo on Drug Trafficking and Consumption In an informal talk with journalists in Guadalajara, President Zedillo said that instead of certifying Mexico's anti-drug performance, the US and other consumer countries should "indemnify us for all the filth they leave us." (Reforma, 22 October) ECONOMY Tax Reform Mexico must crack down on the overwhelming incidence of tax evasion and fraud before it can enact any sort of tax reduction, according to the president of the Mexican Tax Administration Service (SAT), Tomas Ruiz. It is estimated that about 70 percent of Mexican workers do not comply with their tax obligations, in addition to massive evasion on the part of large businesses. Because of the rapid growth of the informal economy, the SAT estimates that total tax contributions will be lower in the year 2000 than in 1994. Nevertheless, recent reports show that the government received 10.9 percent more in taxes between January and August 1997 than in the same period in 1996, and 8.9 percent more than what was predicted. This is primarily due to increases in taxes on business profits and the value added tax. Total revenues during this period were $164.5 billion pesos. At the same time, however, non-tax revenues were 2.9 percent less than predicted in the 1997 budget. (Reforma, 21 October) Inflation Inflation in the second half of September was only .33 percent, leading to optimism that the government's goal of 15 percent inflation in 1997 may be met. However, recent salary revisions (which have averaged 20 percent annually) and the unexpected expenses related to the hurricane relief plan could lead to a slight increase in inflation in the final two months of the year. In any case, it should be under 17 percent. Mining Concessions As part of its strategy to attract private investment to the mining sector, the federal government will offer concessions to mine over 9,000 hectares in the states of Sonora, Baja California Sur, Durango and Sinaloa, where important quantities of gold, silver, led, copper and zinc have been discovered. A first package of six concessions will be offered during the last week of October. Credit and Debt Bank financing of the private sector fell 10.4 percent in real terms in the month of September to 833 billion pesos. This is the 30th consecutive month in which such credits have fallen in real terms. Meanwhile, bank deposits increased by 2.7 percent in real terms in September. The latest estimates of the of the commercial bank bailout and debtor relief programs has increased to 212.3 billion pesos, or 8.3 percent of annual GPD. Of this total, 54.94 billion were already covered in the 1995 and 1996 budgets and the rest will be financed over the next thirty years. Microenterprise Survey According to the government's recently released National Survey of Microenterprise, between 1992 and 1996 employment levels in micro and small scale businesses grew at an average annual rate of 4.3 percent, from 4.8 million to 5.7 million workers. Much of the increase came in the wake of the crisis of December 1994, when the retail and service sectors served as a sort of "escape valve" for the economy. Many people went into business for themselves, leading to an annual average increase of 12.1 percent in the number of self-employed workers. In 1996, there were 3.6 million microenterprises registered in Mexico, 84.3 percent of which belonged to the retail and service sectors. Of the total economically active population of 15.5 million people, 52.7 percent were self-employed Foreign Debt Mexico's foreign debt fell by 3.9 percent during the first semester of the year, to $151.172 billion. $96.859 billion of this is public sector debt, while $17.316 corresponds to commercial banks, $27.334 to private companies and $9.663 is money owed to the IMF. The total foreign debt as of June 30 represented approximately 39 percent of annual GDP, or 1.3 times total estimated annual exports. This is a significant improvement over December 1995, when total foreign debt was $164.191 billion (2.3 times total exports that year). However, it is still greater than the December 1994 pre-crisis level of $136.46 billion. During the first semester of 1997, the reduction in the average debt servicing costs was around 250 basic points. In 1996, $18.35 billion in Mexican foreign debt will come due, primarily with multilateral organizations and commercial banks. About $12 billion of this is public debt, of which more than 40 percent will have to be refinanced. The private sector will have to pay off about $5.2 billion in 1998, most of which corresponds to commercial paper and bonds. ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us 339 Lafayette St., New York, NY 10012 http://www.blythe.org e-mail: nyt@blythe.org ================================================================= nytcamer-10.31.97-12:28:50-14041