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Salinas: `Mexicans Will Know... What It Means To Live In Stability'

Flying over the Yucatan peninsula in the presidential plane, Mexican President Carlos Salinas de Gortari was on a weekly visit to the provinces. Mexico City Bureau Manager Geri Smith and Senior Editor Frank J. Comes joined him as he talked about the tough year ahead.

ON CLINTON: The fact that President-elect Clinton was willing to meet with a president of Mexico--while traditionally he would always meet with his historical allies in Europe--showed a special sensitivity that I appreciated.

ON NAFTA: We are confident that the agreement as it was signed will be in effect by Jan. 1, 1994. We are willing to talk about issues that make economic sense and do not infringe on our sovereignty. But if we try to put too many things within NAFTA, we can make it very difficult to get it approved in each of the three countries.

ON THE ENVIRONMENT: Enforcement is important for us, notwithstanding NAFTA. We are fully committed to enforcing our laws because Mexicans demand it and deserve it. There's a new and very public consciousness in the younger generations about the environment. A new attorney general for the environment has introduced more than 3,000 sanctions in just six months and has shut down almost 700 factories, 40 of them permanently. And we will not accept new factories, even though they may provide jobs, if their technologies are harmful.

ON WAGES: We do not want to go into NAFTA with low wages. If low wages were the fact attracting investment, someone has said that Haiti would be the industrial capital of the world, and this hasn't happened yet. In the four years of my administration, every year real wages have increased in manufacturing and in services. We hope that with NAFTA, productivity will grow even more, and therefore that Mexican workers will earn even more.

ON INFLATION: We must bring inflation down to a one-digit level this year. Some say, why don't you relax your inflation goals a bit so we can have better growth rates? And I respond: There is no trade-off between inflation and growth. We want single-digit inflation because it has been almost a quarter of a century since we last had it. In that time, more than half of Mexico's population has been born. So more than 45 million Mexicans will know for the first time what it means to live in stability.

ON POLITICAL REFORMS: We want to have a system that has professional officials in the electoral bodies and a reliable electoral registry. Independent companies, like McKinsey and Nielsen, have said it is reliable. We want immediate vote results and transparent financing procedures so that each party's expenses can be monitored.

ON ELECTION OBSERVERS: Anyone who wants to come and look at the electoral process can do so, because our constitution guarantees freedom of movement. You can ask and do what you want. We reject the idea that any foreigner can come and decide whether the process is correct.

ON THE TRADE DEFICIT: We have a deficit that is 6% of GDP, and our international reserves continue to grow. Why? Because the deficit is not coming from the pull of a budget deficit. On the contrary, we have a budget surplus. So the current-account deficit comes from the pull that private investment is generating in imports. But public finance will be very disciplined. Privatization has stimulated the return of capital. So investment goes on without deficit spending.

ON HIS DRIVE: It's the "Vitamin P" I take every day--the politics vitamin. It's in my blood. It's very stimulating.

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