Ghosts of Mexico’s Past Haunt Zedillo’s 1st Weeks

MEXICO CITY —  The day an energetic and naive President Ernesto Zedillo strode into his new office last December at Los Pinos, the official residence of heads of state, his top aides recall how impressed he was with its cleanliness, order, grandeur and freshness.

Zedillo, who had risen from a shoeshine boy in Mexicali, sat at the huge presidential desk, leaned back in his chair and smiled.

“Then, he opened a drawer,” recalled one close aide. “There was a bloody knife. He opened another: a smoking gun. And another: more blood. He went over to the closet and opened it. That’s when all the bodies fell out.”

It’s metaphoric, to be sure. But this description fits precisely how aides and top officials say Zedillo has felt since his first day in office--the willing and still-determined victim of a cruel political and economic inheritance that exploded in his face within days of his assuming power.

But Friday, as Zedillo marked his 100th day in what he acknowledged has been one of the most difficult presidential debuts in Mexican history, it has become clear that behind the explosion of events here lies one of two possibilities: Either Zedillo’s economic and political strategies have been overrun by events far out of his control, as his advisers contend. Or, very simply, Zedillo has no strategy at all to run this country.

Consider:

* He and his administration have lurched and lunged, then ceded to Congress the handling of an armed rebellion in the southernmost state of Chiapas.

* They have succeeded in laying critical groundwork for democratic reforms. But they have done so by pursuing a zigzag course that has left many Mexicans unsure of the president’s motives.

* After pushing his ruling party to gracefully accept its worst political defeat in 66 years in Jalisco last month--signaling the beginning of the separation of the ruling party and the state--Zedillo then swore his allegiance to the Institutional Revolutionary Party, or PRI, just last week.

* And on the economy--the one issue that analysts had considered the strength of the Yale-educated economist--it now seems to most Mexicans that every attempt their president has made to put out the flames of disaster has served only to fuel them.

For most analysts here, there was an ultimate irony Friday on Zedillo’s 100th day in office: Every Mexican awoke to the news that, in the year ahead, the president will preside over one of the most difficult times of their lives too.

It was on this day that Mexicans saw just how Zedillo had torn up one economic strategy in favor of an even more painful one.

That Draconian document is the closest that Zedillo’s government has come to presenting what Mexico’s international creditors believe is a realistic strategy to overcome the nation’s worst economic crisis in more than a decade.

The financial situation detonated just 20 days into Zedillo’s term. But his Cabinet marked the president’s first 100 days with projections of 42% inflation, against 10% wage increases; an increase in the sales tax from 10% to 15%; 35% hikes in the cost of gasoline, and a 20% jump in electric bills.

In another measure of Zedillo’s performance, the Mexican peso, trading at 3.47 against the U.S. dollar the day he took office, Dec. 1, closed at 6.25 as he ended his first 100 days. Foreign exchange reserves, which stood at more than $10 billion on his first day at work, have been cut in half. The economy is spiraling into recession. Hundreds of thousands now stand to lose their jobs.

And Zedillo’s government ended its first 100 days not with a flourish but with an appeal and an apology for the many sacrifices ahead.

Even with such bitter sacrifice, analysts concluded Friday, the new economic plan may not work.

The uncertainty surrounding the latest emergency economic plan, analysts said, clearly illustrated a fundamental cause of the president’s trial by fire: of how and why Zedillo--despite the best of intentions--has been unable to implement a comprehensive strategy to steer the nation.

“The government of Ernesto Zedillo has been stumbling around for 100 days, tripping over the rubble left by his predecessor, falling down and picking itself up again,” commentator Humberto Musacchio said.

Miguel Angel Granados Chapa, a political analyst, observed Friday: “Since his enthronement, President Zedillo (has been) faced with extraordinarily complicated conditions.”

In his essay “100 Days,” which cited those complexities as part of the reason Zedillo has failed to fulfill expectations, Granados Chapa concluded that the president “knows how to do it. (But) the panoramic promise with which Zedillo would have governed has blurred into a desolate landscape where the horizon has disappeared from view, because he offered no quick solutions. Unless, later, we discover some sense that for now remains hidden . . . what has unfolded before our eyes is more tactics than strategy, or an erratic strategy whose abundant zigzags denote improvisation at every opportunity.”

Zedillo has been unpredictable, especially on the economy.

His aides blame the government of President Carlos Salinas de Gortari for their problems. But Zedillo must share the blame too, analysts said.

His economic team--most of whom also served in Salinas’ Cabinet--reacted to an overvalued peso by applying extreme measures so suddenly that they angered and alienated Wall Street investors.

Within four days of the Dec. 20 announcement by then-Treasury Secretary Jaime Serra Puche that the government no longer would support the peso, $5 billion--then one-third of the foreign-exchange reserves--had fled. After an agonizing week, Zedillo accepted Serra’s resignation--losing one of his closest friends from his Cabinet.

In the weeks that followed, Zedillo zigzagged again and again on the economy.

In early January, he presented an emergency austerity plan meant to calm investors. But it came 20 hours late, because Zedillo let labor and business argue their way to consensus in a rare display of economic democracy.

The delay backfired, and Mexico’s plummet continued. And on Thursday night, the first plan was replaced by the Draconian document that revised all the government’s estimates once again.

The president’s latest proposal did little to encourage analysts. It too came late--too late to help, they said. And, again, Zedillo blamed the delay on his commitment to a new era of democracy. He refused to present his economic plan until after Mexico’s newly autonomous Congress approved a $20-billion U.S. bailout package.

But on Zedillo’s bold, recent moves to establish an authentic democracy and a new rule of law in Mexico, he has won points--a conclusion reflected in a poll published Friday by Mexico City’s daily newspaper Reforma.

Asked to rate Zedillo on a 1 to 10 scale, respondents gave him a 6.3. Asked to rate his predecessor, they gave Salinas a 5.1. Zedillo’s highest performance ratings were for honesty, for his commitment to democracy and to sweeping judicial reform; his lowest were for management of the economy.

As the economy deteriorated, Zedillo did take the first concrete steps in 66 consecutive years of PRI rule to dismantle his party’s stranglehold on power. He ceded some of Mexico’s traditional presidential authoritarianism to Congress.

He also enforced a new policy of equal justice--by permitting just one arrest in one of two major unsolved political assassinations. Zedillo permitted the arrest of Raul Salinas de Gortari, elder brother of the former president. That action broke all ties to his predecessor and shattered the immunity accorded to former Mexican presidents and their families, in exchange for their silence.

“The government’s determination to forge a new political contract cannot be doubted,” observed analyst Fernando Lerdo de Tejada, citing Zedillo’s effort to persuade his party to concede defeat to the conservative opposition National Action Party, or PAN, in Jalisco.

But even Lerdo de Tejada was far more critical on the economy--and on the government’s handling of the guerrilla war in Chiapas.

There, Zedillo has waffled, wavered, flinched and then cracked down on the armed Zapatista National Liberation Army rebellion.

“The decisions on Chiapas and the devaluation of last December represented a high expenditure of political capital. And it could not be otherwise,” Lerdo de Tejada said. “The entanglement in Chiapas and the overvaluation of the currency were impossible to maintain without grave risks to the country. The real questions (though) are how can we advance the democratic process and at the same time respond to the many and divergent demands of social, economic and political justice without falling into ungovernability?

“Ernesto Zedillo seems to have found the answers, in the true application of legality,” he added. “And in this reform, we already have seen the first results: the progress in the investigations into the atrocious assassinations of (former PRI presidential candidate) Luis Donaldo Colosio and (former PRI Secretary General) Jose Francisco Ruiz Massieu.”

Other analysts were less sanguine. To achieve ultimate reform, they said, Zedillo must dismantle a system in which the power of the PRI and the government have become synonymous; he must sever the two, while maintaining enough stability to prevent chaos and collapse.

“Can it be done? Can Zedillo do it?,” historian Enrique Krauze asked in an essay timed to the president’s 100th-day anniversary. “The risks are enormous.”