Zedillo Will Need More Muscle To Take Charge In Mexico

Carlos Salinas de Gortari is a tough act to follow as President of Mexico. He quashed triple-digit inflation, pushed through the North American Free Trade Agreement, and attracted billions in foreign investment. But along with these successes, he left some major headaches for his hand-picked successor, Ernesto Zedillo Ponce de Len.

Zedillo's inauguration on Dec. 1 comes after a year of turmoil that started with a rebellion in the state of Chiapas and included two major political assassinations. The tensions have disrupted the economy, spooked foreign investors, and pushed the peso to the brink of a politically embarrassing devaluation. All this leaves Zedillo with an unenviable job. He will have to deal with some of the unpleasant social side effects of Salinas' bold reforms while keeping Mexico on its modernizing course. But he won't have much money to throw at problems. And what used to be a key instrument of the presidency, the long-ruling but now divided Institutional Revolutionary Party (PRI), could prove to be more of a liability than an asset.

SHARE THE WEALTH. Zedillo's challenge is to make a strong enough showing in the first few weeks to win the respect of Mexicans and win back the confidence of foreign investors. If he's successful, he may gain enough leeway to stimulate the economy and take steps to spread the benefits of economic liberalization to the middle classes and the poor. He also might take economic reform to another level--letting private interests into some sacred preserves of Pemex, the state oil monopoly, and privatizing CFE, the state electric company.

Zedillo made a good start with the Cabinet he announced on Nov. 29. The financial markets will likely be comforted by his tapping several respected Salinas-era officials including former Commerce Secretary Jaime Serra Puche, who will head the powerful Finance Ministry.

But Zedillo also took a bold step by becoming the first PRI leader to include the opposition in his Cabinet. He named Antonio Lozano, a member of the conservative National Action Party, to the sensitive post of Attorney General. This move seems to signal Zedillo's intent to pursue political reform and try to improve the image of the badly tainted PRI. "Zedillo's main task will be to gain credibility, because the party that backs him has lost it," says political scientist Lorenzo Meyer of the Colegio de Mexico in Mexico City.

Zedillo has already put a team of modernizers to work on a major reorganization of the PRI, whose corruption and undemocratic practices have become an embarrassment. But taking on the PRI will be risky. For one thing, Zedillo is beholden to the party's old guard for his election. What's more, in some states, drug lords and other corrupting influences have gained vast sway over the PRI. They are capable of almost anything if they think their interests are threatened. For example, it is already widely believed that antireform elements of the party were involved in the assassination of the first PRI presidential nominee, Luis Donaldo Colosio, a noted reformer, in March, and the killing of PRI Secretary General Jose Francisco Ruiz Massieu in September.

Lozano's mandate will presumably be to clear the air with an impartial investigation. But such an inquiry poses risks for Zedillo. If there proves to be substance underlying the speculation, his power base might be damaged.

The stakes in Zedillo's establishing himself as a strong leader are high for the U.S. as well as Mexico. Salinas made big strides toward improving Mexico's image as a true economic partner for the U.S., not just a source of immigrants and other woes. Zedillo, a Yale-educated economist, wants to put his own stamp on reform. But if he gets outmaneuvered, reform could bog down, dragging Mexico backward.

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