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AN ARGENTINE-STYLE COLLAPSE ON THE WAY IN MEXICO

Posted By: Rosalinda
May 1, 2002

[Source: Mexican media, April 22]
MEXICAN TREASURY SECRETARY RAISES SPECTER OF AN ARGENTINE-STYLE COLLAPSE IN MEXICO, AS TAX REVENUES PLUMMET.

University of Chicago hatchetman Francisco Gil Diaz told the Annual Banking Convention in Cancun last weekend that at the rate tax collection has fallen so far this year, total tax revenue in 2002 could be 30 billion pesos less than what was budgetted--a shortfall of around $3.2 billion usd$

Gil Diaz threatened that Mexico's Congress will have to reconsider the tax reform which they rejected in December 2001 --the centerpiece of which was applying a killer Value Added tax to food and medicine-- or the country could face a collapse like Argentina.

Gil Diaz reiterated that policy is to cut the budget in exact proportion to any fall in tax revenues-- the very zero-deficity policy which pushed Argentina over the edge from financial crisis, into complete breakdown.

Congress doesn't seem to be listening to Gil Diaz, however.

He said Congress must concentrate on putting through reforms of electricity and telecommunications, and the deregulation of local, state, and federal government actions (?!), because "these are the only sources of economic growth"-- and four days later, the Senate chucked electricity "reform" out the window.

The defeat of "electricity reform" legislation is a big deal in Mexico; the PRI and the PRD teamed up against the PAN to halt deregulation; the stop came in the form of a ruling from the Mexico Supreme Court

[Source: "Fox's Wooing of America Brings Him Woes At Home," by Time Weiner, New York Times, April 26; CNI, April 25]

WALL STREET WORRIES ABOUT BREWING BATTLE AGAINST MEXICAN SECRETARY OF FOREIGN RELATIONS, JORGE CASTANEDA.

Mexican President Vicente Fox radically changed Mexican foreign policy to adopt "an open embrace of the United States.... The flag of Latin American solidarity against Yankee imperialism is furled."

The problem is, Fox has gotten nothing for it, while Mexicans complain his turning the country into a 21st-Century banana republic, the {New York Times} warns.

The two previous Mexican Presidents, Ernesto Zedillo and Carlos Salinas, started this shift in Mexican policy.

Arturo Valenzuela, U.S. Project Democracy hitman on Ibero-America, asks the {Times}: "Salinas got NAFTA, Zedillo got $40 billion," but what has Fox gotten?

The domestic fight against Castaneda's foreign policy is becoming "a very strong struggle for power in Mexico," Valenzuela warned.

Members of Fox's cabinet have told the White House, that if it does not help win legal status for Mexican migrants, Fox will be in political trouble.

A Mexican political analyst warns that the opposition is hitting on a very vulnerable flank, and it could pay off, with the opposition winning back the Presidency, next time round.

Castaneda's relations with Congress are so bad, that the Senate Political Coordination Committee cancelled its request that Castaneda testify before the Senate, indicating they have such "little confidence" in him, that if they need anyone, they'll speak with Fox directly.


Messages In This Thread


AN ARGENTINE-STYLE COLLAPSE ON THE WAY IN MEXICO (views: 588)
Rosalinda -- Wednesday, 1 May 2002, 9:02 p.m.

BIG BLOW TO INTERNATIONAL FINANCIER PLAN IN MEXICO (views: 307)
Rosalinda -- Thursday, 2 May 2002, 12:55 a.m.