Table: Zedillo's Rescue Scheme: Will It Work?
PROPOSAL RISKS PRICE Zedillo is calling for tight wage- Price controls will be difficult to CONTROLS and-price restraints to enforce. Already, dis contented workers hold down inflation. are being asked to take a cut in real Companies are to settle income. for lower profit margins. AUSTERITY Zedillo plans to slash the 1995 He is engineering a reces- sion as MEASURES budget by $5 billion and growth is expected to fall to 0.5% or slice the current-account less. This will put pres sure on domestic deficit in half, to $14 billion. banks and weak companies. Mexicans He hopes this will restore who expected increases in social investor confidence. spending will be dis appointed. RESCUE Mexico is asking the U.S., Can- The crisis dents image of the star PACKAGE ada, and other governments emerging market. More money could be and international banks for an needed if confidence flags. U. S. $18 billion package to stabilize commercial banks are un happy. the peso. PRIVATIZATION To raise funds, Zedillo wants to Proposals may not be ag- gressive open ports, railroads, radio, enough to win back massive amounts and satellite telecom to private of cash from abroad. What really interests. He may allow sales interests foreign investors of Mexican banks and open up is opening state-run elec- tricity and oil sectors. petroleum-related sectors. CHARTS BY ALBERTO MENA/BW
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