Zedillo: `We Have This Short Term Noise'

PRI Presidential candidate Ernesto Zedillo Ponce de Len, 42, appeared self-confident as he sank into a sofa at party headquarters to talk with BUSINESS WEEK Mexico City Bureau Chief Geri Smith on Apr. 26. Excerpts from the interview follow:

On the economy: The fundamental conditions are really good. We have evolved from being a very closed to a very open economy. We have been able to negotiate NAFTA. We should be very optimistic about the medium- and long-run prospects.

On interest rates: I see the high interest rates as a short-run phenomenon, derived basically from the uncertainty after Mr. Colosio's assassination. In a few weeks' time, interest rates will start to drop. Right now, the market has to pay a high-risk premium. That's a reality of the market, and you had better accept that.

On growth: There's no certainty when we are going to see significant growth, because we have this short-term noise. But in 1995 the economy will be growing. The answer to growth is in private investment. We'll do whatever is needed to improve productivity at the company level, at the worker level. I will also spend more on education, health, and basic services. I will do that within the constraints of a balanced budget, which will

be possible because growth will provide additional resources.

On rich vs. poor: In the years ahead, we will correct [skewed] income distribution by using more efficiently our most abundant resource--labor--training that labor, boosting wages, and thereby achieving a bet-

ter income distribution.

On the assassination: When I am President, if it is not solved, I will use any resource at the disposal of the state to investigate. [Overall] we have to review laws, to truly professionalize the Mexican police, and then see that the judiciary is really independent.

On Chiapas: I reject any violent action. But once [the rebels] decided to negotiate, they earned my respect.

On winning: It's obvious that the only party that has a comprehensive program to make the economy grow and produce the employment people are demanding is my party. I am the only candidate telling people how to solve problems.