Can Mexico Be a Stable Democracy? How Zedillo Should Steer a Change

Now that the Mexican stock market has bounced back and Wall Street and the Clinton administration are resuming their praise for what they describe as Mexico's unprecedented economic and political reforms, it's time to sound a cautionary note: We may be watching the replay of an old movie.

We have seen it before, during former President Carlos Salinas de Gortari's days in power, when Wall Street brokerage houses hailed Mexico's "miraculous comeback" and President Clinton proclaimed his "enormous admiration for President Salinas." Then, of course, there was an Indian-supported rebellion in the southern state of Chiapas, two major political assassinations, and an economic collapse. The economy fell by 7 percent last year, and Mr. Clinton had to come to Mexico's rescue with a $50 billion international bailout package.

The trouble with the latest "new economic recovery" heralded by Wall Street and Clinton administration officials is that, unless Mexican President Ernesto Zedillo Ponce de Len implements drastic political changes, it may end as badly as the last one. Zedillo, an intelligent and well-intentioned economist who enjoys an image of honesty, risks repeating his predecessor's mistake: putting off much-needed political reforms until the economy gets better.

He may be building a new house of cards on shaky ground. His economic program may survive only until a new wave of investor panic triggered by some incident of political violence brings about a new financial crisis. The events that triggered Mexico's 1994 economic crisis - rebellion in Chiapas, the assassination of presidential candidate Luis Donaldo Colosio Murrieta, and the murder of ruling party Secretary General Jos Francisco Ruiz Massieu - were of a political nature, and will not go away with economic corrections. A continuation of the old system is bound to fail: Mexico's economy depends heavily on foreign and domestic investors, who demand the kind of stability the country's aging political system can no longer provide.

Mexico's strong party system succeeded in maintaining social peace for nearly six decades but is running out of steam. As Mexico becomes a more urban, more literate, and more open society, the ruling party's old mechanisms of political control no longer work that well. Mexico is no longer the most stable country in Latin America. Its institutions have lost credibility among its people.

The ruling Institutional Revolutionary Party (PRI) has been losing votes steadily in recent decades and is expected to suffer a continued erosion of its support (Mexico's most popular political party among young voters is the conservative National Action Party, or PAN, according to 1994 election results). As the PRI loses ground, internal fights among its various political families are getting nastier. The recent political assassinations are widely believed to be the result of battles between political cliques within the ruling elite. These battles are not likely to go away unless a truly independent justice system ends the impunity PRI politicians have long enjoyed.

To continue opening up and expanding its economy, Mexico needs a system that can channel social tensions constructively creating a level playing field for political parties. It needs to implement drastic election and media reforms to complete its transition to a modern democracy and restore credibility to its institutions.

Can the PRI lead Mexico on the road to a full democracy? It will be difficult. The PRI, which has already undergone hundreds of cosmetic internal reforms, is highly unlikely to implement such sweeping changes. Zedillo is still relying heavily on the PRI and stating that the party's internal reforms will help propel Mexico into a full democracy. But even some of his top aides are skeptical that the party will renounce the privileges that help keep it in power.

"Under the current circumstances, I don't think that the PRI can regenerate itself," Genaro Borrego, the former PRI president who is now head of the government's 230,000-employee Social Security Institute, told me at his office. "The traditional party has run its cycle. Now, there should be a new political option...."

One increasingly hears comments like these in government offices - statements unthinkable only two years earlier. In this case, skepticism came from the official who, as PRI president, helped organize a 1993 billionaires' fund-raising banquet to collect money for the 1994 presidential elections. Many senior officials have arrived at the conclusion that Mexico needs dramatic changes to find a new source of political balance. A ruling party blessed by international observers calling its last election the cleanest in Mexico's history is not likely to preside over its own undoing.

The best scenario for Mexico would be for Zedillo to lead the changes. To do that, he would have to break with the past, and perhaps quit the ruling party altogether, expand the number of opposition politicians in his Cabinet, and create a coalition government that could get all political parties to agree on an agenda for transition to a full democracy. Zedillo is then likely to ensure himself a place in history as the founder of a fully democratic Mexico.

The danger is that the perhaps unavoidable $50 billion bailout of Mexico and ensuing US buoyancy over Mexico's economic recovery will give Zedillo an ill-founded sense of security, and he will again postpone the sweeping political reforms Mexico needs for stability.

'A FTER seven months of discipline and hard work, the most important indicators of our national economy are already showing signs of improvement," Zedillo said in mid-1995, as he predicted better times for 1996. "We are already seeing some clear signs that we will soon overcome this crisis."

Zedillo promised in his inaugural speech in late 1994 that he would lead Mexico to a full democracy. He may still do it. His top aides have told me emphatically that he will. But he seems to have put off the task for a later date. Mexican presidents postponed major political reforms after Mexico's 1976, 1982 and 1987 economic crises. It could happen once again.