Struggling with hard times in Mexico. In one typical town, even doughnut prices have gone up

Palm trees, old church domes, a grain elevator, and factory smokestacks accentuate the skyline of this city near Mexico's central Gulf Coast. Morning here breaks with crowing roosters and blasting bus engines. Factory workers such as Daniel Contreras Hern'andez are heading for early shifts. Others, like Rudolfo Romero Romero, are going home from all-night factory shifts.

But beneath the outward appearance of normal activity in this tropical city of 200,000 there are signs that life is getting tougher for these people. Their discontent is strong.

Although Orizaba is located in an oil-producing and industrialized area, where one might expect things to be going well, the city exemplifies Mexico's growing economic and political crisis. The crisis involves soaring inflation, rising unemployment, and the persistent charges that the government is guilty of voter fraud in northern state elections earlier this summer.

Mexican political scientist Carlos Rico says Mexico will continue to be stable despite its woes. Top government officials agree.

Still, ``the situation is very delicate,'' said Manuel Alonso, press secretary to Mexico's President Miguel de la Madrid Hurtado, in an interview. Maintaining stability and social peace is one of the top aims of the government, Mr. Alonso said. He credits the President with speaking ``bluntly, with truth to the people'' about the seriousness of the economic challenges facing Mexico.

Here in Orizaba, an old man selling doughnuts on the street says his sales have dropped because rising costs have forced him to raise his own prices to 6 cents a doughnut.

Mr. Romero, the factory worker, lives nearby, just off a small courtyard, in a room barely big enough for a bed, a few pieces of furniture, and a nonfunctioning stove.

He lives alone. ``What I earn is only enough for me.'' To marry, he explains, he would have to take a second job. ``There are many who do this,'' he adds.

Mr. Contreras, another factory worker, says his pay raises have not nearly kept up with increases in the cost of living. He complains of lack of job benefits and government help to those who need jobs.

But more than that, he expresses little faith that things will get better. ``The government is never going to help,'' because it doesn't care, he says.

Francisco Salgado Valle, former head of a statewide industrial professional association, also criticizes the government's financial policies.

By borrowing so heavily from deposits in Mexico's banks, which are federally run, little has been left for private investors to borrow.

That slows economic growth and means heavy foreign debts will continue, he adds.

But Mexico's entry into the General Agreement on Tariffs and Trade, the world-wide trading program commonly called GATT, will help in the long run, he says. It will force Mexican industries to modernize to compete with other nations, he says. It will also, he adds, force other Mexican industries to close.

Still, one sees signs of local progress here despite the economic crunch.

On a mountain slope above this industrial valley, a small pipe brings water to families living in a cluster of shacks. New classrooms are being built in the area, and new street lights are being installed in some sections of the city. According to the Mayor of Orizaba, Enrique Garc'ia Vera, new roads and housing are being built, and the extension of water into more homes continues.

Industrial expansion is needed, said Mayor Garc'ia. But often Mexicans lack the ``industrial mentality'' to forge ahead. To back up this assertion, he tells the story of a fisherman who caught two big fish. A friend asked if he was going back to catch more. No, the man replied, he had all he needed for the moment.

On Mexico's political front, angry allegations continue in Mexico's northern Chihuahua State that the ruling party stole the local elections there. Voter suspicions are evident throughout Mexico, including here, in the state of Veracruz, where elections are slated for Sept. 7.

``It's not worth going to vote,'' factory worker Contreras says.