MEXPAZ: Mexico Update #146 10/29/97 Via NY Transfer News Collective * All the News that Doesn't Fit source: MEXPAZ_information MEXICO UPDATE #146 October 29, 1997 Produced by Equipo Pueblo ___________________________________________________________ This version of the Mexico Update contains three sections: Politics/Democracy; Human Rights/Justice and Economy. Comments welcome; e-mail: pueblodip@laneta.apc.org Or fax (52-5) 672-7453. ___________________________________________________________ DEMOCRACY/POLITICS New Ambassador Sworn In Jesus Reyes Heroles was ratified and sworn in by the Senate as Mexico's new ambassador to the United States on Tuesday, October 28. Reyes Heroles, who left his post as Secretary of Energy to go to Washington, said that he will not be Mexico's "best salesperson" abroad with respect to the privatization of petrochemicals, but acknowledged that he will assist the new Secretary of Energy, Luis Tellez, in moving that process forward. He said that he has instructions from President Zedillo to dedicate more time and resources to the issue of immigration and the human rights of Mexicans in the United States. Reyes Heroles replaces Jesus Silva Herzog, who represented Mexico in Washington for two and a half years. Silva Herzog said he wants to return to Mexico to enter academia and to write a book on bilateral US-Mexican relations. (Reforma, 29 October) Camacho's New Party Former Mexico City Regent Manuel Camacho Solis, who resigned from the PRI and has formed a new party (the Party of the Democratic Center, PCD), announced that 100 labor union leaders have resigned from the PRI in order to join his party. Camacho said that the PCD has so far registered 7,000 members (without counting the new labor leaders) and predicted that next year they will apply for formal registration with the Federal Electoral Institute (IFE). (Reforma, 27 October) Fraud in Jalisco Evidence has recently emerged that the state government of Jalisco stole about $12 million dollars from public coffers to give to the PRI back in 1991-93. Checks for millions of dollars were made out to the governor's top aides presumably to give to non-profit organizations involved in charity works. However, only 1.5% of the funds ever made it to those charities. The rest was deposited in the personal accounts of these aides, and most of it was then transferred to the PRI. The former governor of Jalisco, Guillermo Cosio Vidaurri, denied any wrongdoing and said that the accusations are mere electoral maneuvers against his party. (Reforma, 27 October) Tabasco Election Results After nearly concluding the vote count in the state of Tabasco, it is clear that the state electoral tribunal will award all of the 35 offices up for election to the PRI. The PRD continues its protests, arguing that it was not a contest with the PRI, but rather with the entire state apparatus, which governor Roberto Madrazo used to ensure PRI victories. However, the PRD also recognized that internal disputes contributed to their losses in Tabasco and announced that they will undergo an internal restructuring. (La Jornada, 26 October) Reform of the State The PRI announced that it will propose the formation of a multi-party commission within the Chamber of Deputies to lead discussions on future reform of the State. While the PRI argues that significant progress has been made in this area under the leadership of President Zedillo, it admits that there are important issues that have not been resolved. (El Financiero, 27 October) HUMAN RIGHTS/JUSTICE Lankenau Flees and Turns Himself In Jorge Lankenau, the former director of Abaco Financial Group who has been under house arrest since September for alleged financial fraud involving $370 million dollars, escaped on Saturday after someone warned him that the police were about to take him into custody. For two days he was sought, until he turned himself in on Monday afternoon. A judge then ruled that the Attorney General's Office (PGR) could not take him into custody, and instead he was returned to house arrest after a brief period of questioning. The incident illustrates how corruption has infiltrated the police force, since someone from the inside warned Lankenau or his lawyers about the arrest warrant, and it is likely that at least some of the police guarding his house allowed him to escape. In addition, the PGR has said that it will investigate the judge that accepted Lankenau's plea not to be taken into custody, suspecting him of colluding with the defendant. (Reforma, 28-29 October) Salinas on Justice Former president Carlos Salinas de Gortari, who continues his self-imposed exile in Ireland, testified in the Mexican embassy in Dublin with respect to the murder of former PRI president Jose Francisco Ruiz Massieu. Gortari, whose brother Raul is currently in jail accused of masterminding the murder, also released a public statement in which he attacked Mexican authorities in charge of the case and said that they have committed numerous abuses which have damaged the rule of law in Mexico. (Reforma, 29 October) High Level Contact Group Meetings The fourth plenary meeting of the High Level Contact Group (made up of officials dealing with drug trafficking issues from Mexico and the United States) was held in Washington last week. The US delegation opened the meeting insisting on greater Mexican cooperation in the war on drug trafficking. Sources say the US wants Mexico to : allow it to engage in "hot pursuit" in its sea and air space, authorize 45 DEA agents to carry arms in Mexico, and immediately extradite Mexican drug traffickers sought in the US. All of these demands have been made before, and until now Mexico has rejected them (at least publicly). For the first time since the High Level Contact Group was established in 1996, a member of the DEA participated. (El Financiero, 24 October) ECONOMY Stock Market Volatility The global crisis affecting stock markets from Hong Kong to New York hit the Mexican stock market (Bolsa) as well, leading to a 13.34% drop in the Bolsa index on October 27. The peso also plummeted, closing at 8.5 to the dollar, representing a 7.73 percent devaluation. However, on Tuesday, the stock market recovered 11.69% and the peso closed at 8.3 per dollar. Interest rates, however, were not so quick to recover, and leading rates remained at 20.94%, which is 3.68 percentage points higher than last week. Finance officials insist that the Mexican economy is sufficiently solid to withstand such volatility, and that the crisis is international and does not reflect a crisis in Mexico. However, opposition parties have pointed out that the government's policy of encouraging speculative investment makes the country more vulnerable to such bouts of volatility and called for more controls. (Reforma, 29 October) Stricter Control of Credit Announced The National Banking and Stock Commission (CNBV) announced that in order to avoid further increases in the cost of the financial bailout of commercial banks, the agency will require the banks to enact stricter controls over the credits they award in the future. The fiscal cost of the bank bailout programs has increased to 379.8 billion pesos, or 11.9% of Mexico's estimated 1997 GDP. This is 79% greater than the amount estimated by the government just two months ago (212.3 billion). One of the reasons for the increase is the continued deterioration of the banks' credit portfolios. However, businesses argue that without renewed credits, they will not be able to grow and thus pay off their debts (La Jornada, 26 October) Opposition Agrees to Promote Joint Fiscal Policy in 1998 The four opposition parties represented in the Chamber of Deputies (PRD, PAN, PT, and PVEM, or the G4) agreed, in principle, to try to promote a common fiscal policy for 1998 and laid the foundations for achieving an "Viable Economic Agreement on Revenues and Expenditures". While the opposition seeks to agree on a common overall economic policy, for now they have limited their agreements to fiscal issues. The basic tenets of their proposal include: strengthening state and local treasuries and substantial increases in education, health, housing and sustainable development programs. They will seek a progressive tax policy designed to generate productive employment and assist in the development of business. (Reforma, 29 October) Budget Almost Ready to Send to Congress The executive branch is preparing the 1998 budget to present to Congress in November, which will total between 830 and 850 billion pesos. This would represent a nominal increase of 17% and real increase of about 5% over the 1997 budget of 725 billion. According to officials from the Treasury Department (Secretaria de Hacienda), the budget will include important increases in social programs like education, health and housing, especially in the southern states of Chiapas, Oaxaca and Guerrero. However, they have warned that any attempted reduction in the 15% value added tax (which has been suggested by opposition parties) will have to be met with a similar reduction in social spending. The administration has also rejected the PAN's proposals to eliminate some Secretariats as a means of saving money. (La Jornada, 22 October) IDB Credit to CFE The Inter-American Development Bank (IDB) announced its plans to give a $450 million loan to Mexico's Federal Electricity Commission (CFE) for its transmission and distribution program. This loan will be accompanied by another for $20 million for the CFE to acquire new more energy-efficient equipment. Subway Fare May Increase The Secretary of Transport is studying a possible increase in the Mexico City subway to be enacted at the end of the year. The current fare of 1.3 pesos does not cover the full 2.31 real cost per passenger. The government may decide to reduce its current subsidy of approximately 4.5 million pesos (around $560,000) per day. (Reforma, 29 October) ================================================================= 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-10.31.97-12:50:06-2553