Mexico's need now
The world as a whole is not so simon-pure that it can give Mexico lessons in morality. But it can only applaud the incoming Mexican president's own call for the moral renewal of a society that has tolerated a debilitating corruption at high and low levels. Indeed, the present lame-duck administration could leave no better legacy than to further the task of housecleaning in the three months left to it. All the domestic and international proposals for Mexico's economic rescue will fall short to the degree the corruption continues.
Mexico's recent years of oil-fueled prosperity could have provided an opportunity to attack the problem. Instead, kickbacks and payoffs on governmental and industrial projects made the rich richer. Police and lower officials fought inflation by raising the price of the petty bribery that had become entrenched to eke out low government wages. The gap widened between the best off and worst off.
Now the nation's sharp economic reverses ought to have the effect of public demand for reform. These reverses have been caused in part by factors beyond Mexico's control - a decline in the demand for and the price of oil just when Mexicans were counting on their oil finds to help carry them buoyantly forward; a recession in the neighboring United States and other countries that were expected to buy more Mexican products of various sorts.
Nevertheless, economists see that Mexico can do much to correct tendencies that have worsened its plight. Whether these corrections are made will be watched by the US and international bankers who at the moment are easing Mexico's crushing debt burden of more than $80 billion. Also watching will be US officials, companies, and workers who expect continued hard times in Mexico to send ever more legal and illegal migrants across the border in search of better opportunity.
The International Monetary Fund can help by insisting on certain conditions for some $4.5 billion in credits now under negotiation. On the one hand, these conditions must not be so draconian as to cause depression; on the other hand, they must be sufficient to push Mexico back toward living within its means. Among the possibilities are budget slashes, wage and price controls, increased petroleum sales, reduced or eliminated subsidies, a free floating exchange rate for the peso, and a holddown on vast government programs.
Mexico has already shown that it can use international support to good purpose. The new world development report of the World Bank notes that, after a decade of slow growth, Mexico's agricultural production increased by 5.5 percent in 1980 and 8 percent in 1981. This was mostly from rain-fed cultivation, a method fostered by the bank's assistance but requiring substantial economic and governmental change on the part of Mexico.
Mexico has also shown that it could make at least some progress in reducing projected increases in the rate of population growth, a factor that has heightened economic problems, particularly in burgeoning urban areas.
But Mexico is challenged anew to respond with improvements in its own policies as it asks for fresh assistance. For example, it could display its good intentions by joining GATT (General Agreement on Tariffs and Trade). This would be a step toward getting out of its protectionist cocoon. Especially now that the peso has been devalued, Mexican industries ought to be expected to become efficient enough to compete without the artifical prop of tariffs. Such a move could encourage the US administration on its antiprotectionist path when US industries call for barriers to Mexican exports.
When President Miguel de la Madrid Hurtado takes office Dec. 1 he will be in the start-with-a-clean-slate position to undertake basic economic remedies - something that should be congenial to his managerial training and experience. But again he will also be called upon to follow through on his campaign theme of moral renewal. This is the key to how far an eventual economic improvement will serve and strengthen Mexico - or simply line the pockets of those on the take.