International -- Readers Report
SHOULD MEXICO EMBRACE THE BUCK? (int'l edition)
Rudy Dornbusch's article, "Mexico should ditch the peso for the dollar," (Economic Viewpoint, May 19) misses the point. As we say in Mexico, "once the dog is dead, rabies is gone." Well, it's not quite. While we are all aware of the political-economic cycles in Mexico, the central issue is that we Mexicans need to change our political, economic, and legal structures to create a system that will improve living standards and provide a better society. Ditching any currency for the dollar would not change corruption, correct the lack of a truly democratic system, or improve bad economic management in any country.
Joaquin Lopez Oroz
Guadalajara, MexicoReturn to top
PRICEY EXECS FUEL INFLATION, TOO (int'l edition)
If the top-paid CEO ($102,499,000) settled for $2,499,000, he could pay 20,000 of his workers $5,000 more each in wages and still not have to raise his prices ("Executive pay," Special Report, Apr. 21). But this would be inflationary, according to what your Business Outlook section tells us reliably every week. Yet increases in CEO pay are not considered inflationary. Why is that?
IstanbulReturn to top
WHY THE TAIWANESE RAGE AT THEIR RULERS (int'l edition)
In a country with a fledgling democracy, the people of Taiwan have been patient and peaceful enough, compared with those of South Korea and other developing countries ("Furor over crime could topple Taiwan's rulers," International Outlook, May 19). In the name of stability and so-called transitional pains on the way to a transparent democracy, we have given the ruling party many second chances for all the policy blunders and corruption scandals.
Yet despite the recent outbreak of violent crimes, the officially elected rulers still stick to the centuries-old mentality that "the king can do no wrong." They are struggling to fix blame and hunt for scapegoats instead of looking for solutions. It is truly a disgrace for a country that has achieved so much economically and that deserves better government and living standards.
TaipeiReturn to top
CLOSING BRAZIL'S TRADE DEFICIT (int'l edition)
Your article "The troubling trade gap" (Business Outlook, May 12) discusses the trade gap in Brazil. The problem goes beyond the ties of our currency to a strong dollar.
After the Plano Real--an economic plan that reduced monthly 80% inflation to less than 10% per year--in July, 1994, the government had to deal with high prices and low competitiveness of domestic products. For that reason, import taxes were reduced dramatically.
The widening of our trade gap has two causes: the lack of investments and the high price of domestic goods. Investment has three sources: private savings, government savings, and external savings. In Brazil, family savings is dismal, and the budget deficit forces the government to expand the M1 (which was prohibited after the Plano Real).
Because we are a developing country, investment is financed with imports; the result is a widening trade gap. A decrease in domestic taxes and prices would make our products more competitive at home and in foreign markets.
Rio de JaneiroReturn to top