International -- Cover Story -- Latin America
TABLE: Mexico's Economic Dilemma
The government is trying to create an export platform while suppressing
consumer spending--and inflation. That pleases international financiers, but
businesses depending on the domestic market are in trouble.
KEY MEASURES CONSEQUENCES
-- Maintain tight Spurs exports and keeps current account in
monetary and fiscal balance, but businesses suffer from slumping
policy; keep peso low. demand as unemployment soars.
-- Boost internal savings Could eventually reduce dependence on foreign
through privatization capital but will take several years to pay off.
of state pension schemes. Political opposition expected to be significant.
-- Step up privatization Will attract investment and boost competitiveness
of petrochemicals by improving infrastructure, but some industries
and communications. worry about layoffs.
DATA: BUSINESS WEEK