How will Mexico's oil riches help her people?; The Politics of Mexican Oil, by George W. Grayson. Pittsburgh: University of Pittsburgh Press. $21.95 in hard-cover. $6.95 in paperback.

The emergence of Mexico as the world's fourth-largest oil producer has come so rapidly that its implications for Mexico and for the world oil industry have yet to be appreciated. But this development is clearly having a major impact on this close neighbor of the United States. Mexican President Jose Lopez Portillo proclaimed in September 1977. "Today nations can be divided into those that have oil and those that do not. We have it." Mexico does indeed have it -- proven reserves of some 65 billion barrels, and probable and potential reserves of another 200 billion. It is all a new and heady experience for Mexico and Mexicans.

The US often sees Mexico's petroleum discoveries as an answer to the oil shortage. But Mexicans view them differently, hoping their "black gold" will somehow free them from the historic domination of the US. These are issues dealt with by Prof. George W. Grayson in "The Politics of Mexican Oil," a trenchant look at oil in Mexico and without doubt the most perceptive study of the question to date.

The book traces the history of oil in Mexico from the 1920s, when Mexico was the world's second producer, through nationalization of the industry in 1938 and the dark days afterward, to the present exciting era, when Mexico has again joined the ranks of major producers. Professor Grayson, who teaches political science at the College of William and Mary, warns the US not to expect that it will have much effect on Mexican decisions concerning petroleum, nor have its energy needs met by Mexico.

Professor Grayson has warnings for Mexico as well. He notes that "without oil the nation's economy would be in disastrous shape." But Mexicans need to realize that oil is not automatically a panacea. Oil, of course, does give Mexico a unique opportunity, for "it immunizes the country from the world energy crisis while providing an assured source of income that can be devoted to development." However, Grayson writes that it would be a tragedy if Mexico failed to utilize its new-found wealth to solve the horrendous backwardness that keeps half of the population in poverty.

With the population soaring to 100 million by 2000, time is short. Too often in the past, income and resources have been wasted. Archaic social structures make matters worse. And there is no assurance that today's oil revenues will be used to remedy the country's many social and economic problems. Professor Grayson concludes that much depends on whether President Lopez Portillo and other Mexican leaders "demand the sacrifices necessary to uplift the country's masses."

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