Author with a world of words

``I see the world verbally,'' says Mexican novelist-diplomat Carlos Fuentes. ``You say truth, you say justice, you say democracy, you say development - words don't create them, but if they do not exist in words they will never exist.'' Born in Panama, Mr. Fuentes spent his early years in Santiago, Chile; Rio de Janeiro; Montevideo, Uruguay; Buenos Aires; Quito, Ecuador; and Washington, as his father, a Mexican diplomat, changed posts. ``I started writing when I was seven years old,'' he recalls, describing a newspaper written in crayon which he tried to circulate through his Washington apartment building.

Three years later his political consciousness surfaced in the RKO Keith movie theater in Washington when, during a film about Sam Houston, he shouted, ``Viva Mexico! Death to the Gringos!'' His father dragged him from the theater - and then proudly leaked the story to the Washington Star.

After studying law in Mexico City and holding various posts in the Ministry of Foreign Affairs, Fuentes published his first novel, ``Where the Air Is Clear,'' in 1958 - a book recognized as launching ``El Boom'' in Latin American fiction. In 1962 his best-known work, ``The Death of Artemio Cruz,'' appeared, followed in 1976 by ``Terra Nostra'' and, more recently, by ``The Old Gringo.''

Fuentes, who served as Mexico's ambassador to France from 1975 to 1977, insists that in Latin America writers must become politically involved. An outspoken critic of United States foreign policy in Latin America, he has in the past been denied entry to the United States under the McCarran-Walter Act. He now divides his time between Mexico and various university appointments in the United States and, currently, at Cambridge University in England.