Mexico In a Hurry or Running Scared?

By JILL SMOLOWE MEXICO CITY

Mexico is a country where nothing is ever quite what it seems. Appointments are made to be broken. Most prices are negotiable. Saving face is more important than telling the truth. Yet what President Carlos Salinas de Gortari is striving to achieve is unusually straightforward. Since his inauguration in December 1988, Mexico's 42-year-old leader has trained his formidable skills on awakening his country from inward-looking torpor to a world where market forces are increasingly international and interdependent.

After almost two years at the helm, Salinas can claim some success. On the economic front, he has launched a campaign to reduce Mexico's bloated statist economy and attract foreign investment that has earned high marks from Mexican businessmen and international lenders. But in throwing the country open to inspection by potential investors, Salinas has unwittingly invited scrutiny of the other major prong of his modernization drive: his pledge to build a true multiparty democracy.

This week Mexicans will be watching carefully as the returns roll in from municipal and legislative elections held Nov. 11 in the state of Mexico. There is widespread skepticism that the Institutional Revolutionary Party (P.R.I.), which has governed the country for 60 years, will permit a fair count in the state, where it lost in 1988. The party's reputation is not helped by the fact that two P.R.I. victories last year in the central states of Guerrero and Michoacan provoked opposition charges of ballot rigging and resulted in violent clashes between police and demonstrators.

Veteran P.R.I. officials concede that there is "a contradiction" between the rapid renovation of Mexico's economy and the slow pace of political change. Opposition politicians on both right and left go further, accusing the P.R.I. of outright electoral abuses. Various international human rights groups and local activists cite a growing number of incidents of police harassment and brutality. Intellectuals, especially those linked to popular opposition leader Cuauhtemoc Cardenas, who lost to Salinas in 1988, accuse the government of orchestrating a campaign to intimidate and silence political opponents. Says Adolfo Aguilar Zinser, a professor of political science at Mexico City's National Autonomous University and one of Salinas' most vocal critics: "He is as dictatorial as his predecessors. He's just changed the messages."

Salinas' message on economics has been tough talk backed by tough action. He has restored business enterprises largely to private hands, most notably by selling off the national airline and Cananea, the nation's largest copper mine. The national telephone company and Mexico's 18 banks have also been put up for sale. Since 1989, when he set out to liberalize foreign-investment regulations, $5.2 billion in new capital has flowed into Mexico, along with consumer goods once unavailable. Salinas has also rectified a dangerous reliance on oil, which produced 78% of Mexico's export income in 1982. Today it accounts for less than 35%.

The growing trade in goods manufactured in Mexico or assembled at factories ! along the U.S. border, known as maquiladora plants, is likely to rise even more if Salinas succeeds in his boldest gambit yet: signing a free-trade agreement with the U.S., a topic that is expected to dominate talks between Salinas and President Bush scheduled to be held in Monterrey later this month. At present, most of the 2,200 maquiladoras are U.S.-owned and employ 560,000 Mexicans who assemble parts manufactured north of the border. A free-trade agreement would encourage more foreign investment, thus providing additional jobs.

Salinas' economic drive has meant redefining some crucial relationships. By extending a friendly handshake to Bush, he has shifted away from prickly concerns about a gringo economic invasion and set U.S.-Mexican relations on a steadier course. Conversely, his approach to Mexico's perennial lawlessness has been firm, from tracking down top drug traffickers to jailing corrupt union and business leaders. Admirers who call Salinas' rapid-fire methods "world-class" say this President is a man in a hurry.

His critics counter that he is a man running scared. They claim that for all of Salinas' achievements, the traditional polarization between the haves and the have-nots is more pronounced than ever. Half of Mexico's 81 million people live in poverty. A wage freeze, coupled with a 30% inflation rate and sharp cuts in subsidies for such basic staples as sugar, milk and beans, has meant a 60% drop in purchasing power since 1982.

The average daily minimum wage of $3.55 is so inadequate that many working- class people have deserted the formal economy to try their luck as street vendors. Salinas' policies have cost at least 1.4 million jobs. Warns a longtime member of the P.R.I.: "There's a difference between being in a hurry and being precipitous."

"The people are in a hurry," Salinas retorts, "and I respond to the rhythm of the people." But even admiring businessmen and members of his own party wonder if he isn't pushing ahead too quickly, rending Mexico's delicate social fabric by asking people to make too many sacrifices they do not understand. Disappointment could begin to catch up with Salinas. The 70% approval ratings that marked his first year in office have plummeted below 44%, according to the results of an unpublished poll taken by the newspaper Excelsior. Now the talk is of his autocratic style of rule: he is likened with varying degrees of enthusiasm to Ronald Reagan, Mikhail Gorbachev and Margaret Thatcher.

$ During the annual state of the nation address, or informe, on Nov. 1, Salinas was interrupted repeatedly by catcalls and howls of disapproval from parties of the right and left. The irreverence stood in stark contrast to the respectful reception usually accorded a President in Mexico. When Salinas claimed that a new electoral code had been endorsed across the political spectrum and that a reliable voters' registration list was being drawn up, the opposition erupted in chants of "We repudiate electoral fraud!"

Leftist critics charge that their phones are tapped and that transcripts of their personal conversations are leaked to the Mexican press. The Mexican Commission for the Defense and Promotion of Human Rights and international groups like Americas Watch document a rise in the number of arbitrary detentions, disappearances and political assassinations. Even those who endorse Salinas' economic program often fault his political foot dragging. "If you begin to reform, you should reform thoroughly," says Rogelio Ramirez de la O, a private-sector economist. "That should be called 'the Gorbachev lesson.' " Unfazed by such criticism, Salinas argues that political and economic reform cannot be undertaken simultaneously. "Anyone who brings about changes over a wide number of fronts has to be able to control them," he says.

But if Salinas' reforms continue to fail to touch ordinary lives, the President may find it difficult to maintain that control. He knows that to expand the pool of Mexicans who benefit from the country's economic development, he needs foreign investment -- and that depends on political stability.

With reporting by Andrea Dabrowski and John Moody/Mexico City