Mexico is back. A surprising 7.2% surge in gross domestic product during the second quarter means the government will easily meet its goal of 3% growth in 1996. Credit goes to President Ernesto Zedillo Ponce de Leon's disciplined macroeconomic management. The Clinton Administration, of course, shares the credit for putting together a multibillion dollar rescue package after the December, 1994, peso collapse. The Bolsa is up 22% so far this year. Inflation is falling, and exports continue to grow. (U.S. exports to Mexico are growing, too--up 24% over the past six months.) There are still worries, however. Mexican consumers have yet to feel the recovery, and Mexico's unsteady banks are unable to channel new investment credit to businesses. But Zedillo's team has started to put the country on a sounder economic footing.
Zedillo also deserves credit for delivering on his promise to reform the country's tainted electoral system. And he has begun to clean up the top levels of Mexico's corrupt judiciary. But recent events in Tijuana show that control over spiraling violence eludes him. A Japanese executive was kidnapped and released after his company, Sanyo, paid a $2 million ransom. Although kidnapping is common in Mexico, this is the first time a prominent foreign executive has been seized.
Gunmen have also killed the federal prosecutor who first questioned the assassin of presidential candidate Luis Donaldo Colosio. The government's failure to solve Colosio's murder and a series of other political and drug-related killings leave Mexicans worried that their country is sliding into instability. In 1994, the wealthy sent their money out of the country when they lost confidence in the government. Zedillo has restored a fragile sense of calm, but cannot afford to endanger it. As a technocrat who won the presidency under the shadow of violence, Zedillo must show the same devotion to law and order that he has so far given to the economy.