Mexico's reform agenda

MEXICO is a troubled nation in search of solutions to its many problems. As noted in a four-part series in this newspaper, ending today, the tasks are daunting. Solving them will require understanding abroad, and fresh ideas, vigor, persistence, and political courage at home. In the long run the most fundamental demand may be slowing Mexico's rate of population growth, which at more than 3 percent a year is one of the highest in the hemisphere. Brazil has made considerable headway in slowing its population rise; Mexico has not, despite an elaborate government program for population control. Mexico's leaders will have to find out why and redirect or redouble their efforts. The nation's social and economic fabric, already strained, should not long be subject to today's r ate of population increase.

The Mexican economy must be revamped. Far too few jobs exist for today's adult Mexicans, let alone tomorrow's greater numbers; now, many Mexicans emigrate illegally to the United States in search of work. A way must be found to create more jobs at home.

Mexico properly seeks to diversify its exports; three-fourths of revenue earned from exports comes from the sale of oil abroad. The past decision to tie Mexico's export economy to oil has proved unfortunate, as the price of oil has tumbled sharply in the past three years and appears likely to fall considerably further. Mexico may require international assistance to finance further development of other industries with export potential, beyond what has already taken place along its northern tier.

Mexico's standard of living has dropped considerably in the '80s; ultimately a way will have to be found to reverse this trend, beyond the on-and-off easing of austerity that is the current pattern.

Reviving private enterprise is a key requirement, along with reducing the size of the economic public sector, which now produces some 70 percent of the gross national product. There has been much discussion but limited action. Major change is extremely difficult, however, since many public-sector jobs are tied to support of the overwhelmingly dominant political party, the Institutional Revolutionary Party (PRI). In the United States this would be akin to the patronage system of yesteryear's big-city po litical machines.

For the PRI to reduce dramatically the size of public-sector employment, widely agreed to be necessary, would require the firing of large numbers of political supporters, jeopardizing support for the party itself. It is difficult to imagine a political entity moving strongly against such self-interest, yet if Mexico is to progress, such action must be taken.

Along the way corruption, as well as inefficiency, must be rooted out.

Challenging as are these and other tasks -- such as meeting its $96 billion foreign debt -- Mexico has an ace in the hole: the United States, with which it has at once a warm and an ambivalent relationship. Mexico knows that its northern neighbor, mindful of the 2,000-mile common border, has a mighty interest in not allowing Mexico to fall so low economically, or to become so troubled socially, as to sink into instability.

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