The Flip Side to Mexico's Austerity: A Rise in Street-Level Democracy

PROTEST movements are on the rise in Mexico as the country's economic crisis hits a growing segment of the population.

On May 5, a Mexican holiday celebrating the Battle of Puebla, more than 10,000 Mexicans gathered in Mexico City's central Constitution Square for a ''citizens' assembly'' organized by the left-wing Democratic Revolution Party. And sizable protests took place across Mexico on May 1, International Labor Day, including a gathering of more than 100,000 people here.

The protests probably will continue into the summer, most Mexicans and analysts here agree. Family incomes are facing what is now the hemisphere's highest inflation -- 33 percent from Jan. 1 through the first week of May -- and rising unemployment.

Raul Garcia, a high-school literature teacher, says he attended the May 5 assembly to find new ideas to take back to his town north of Mexico City. ''People are much more politicized than just a few months ago.

''But what is new in Mexico is that after this economic crisis, more people are convinced that democracy can make a difference,'' he says.

Such observations have led US Ambassador to Mexico James Jones to view Mexico's social roiling as a way to ''let off pressure'' and ''a sign of strengthened democratic expression.''

Fitting in that category is this year's important state elections, he adds. In February, for example, the ruling Institutional Revolutionary Party lost the governorship in Jalisco for the first time in 70 years.

But in a wide-ranging interview with the Monitor here, the ambassador expressed concern that Mexico's volatility will be misrepresented in Washington as a sign that the country's US-backed austerity program has failed. ''For political reasons, policymakers may want to pull the rug out from under Clinton and the bipartisan leaders who support the economic-assistance program,'' he says.

Some Republican members of Congress continue to look for ways to ax or limit President Clinton's $20 billion aid package -- a move Mr. Jones says would have ''devastating economic results'' for the US and Mexico.

Jones, who has been ambassador here since August 1993, says limiting the aid package now would undercut investor confidence just as the economy is sprouting positive indicators. The peso crashed in December, losing over 60 percent of its value within weeks because Mexico did not have the cash to pay off the heavy short-term debt coming due largely with foreign investors.

Mexico will be a significant 1996 US campaign topic if President Ernesto Zedillo Ponce de Leon's economic-recovery plan fails, Jones predicts.

But he points to a strengthening peso, interest rates falling from Everest-high levels in early spring, and two months of trade surplus as signs that the difficult adjustment is working.

Still, some analysts here say they expect Mexico to become a target in the campaign regardless of the country's economic situation.

''If Zedillo's plan fails and the US aid was seen as a mistake, that would be an issue for the Republicans,'' says Arturo Sanchez Gutierrez, research director at the Mexican Institute for Political Studies here.

''But if a year from now Zedillo is seen as having succeeded, the Republicans know Clinton will use that, so they will shift their emphasis'' to Mexico's lack of democracy or corruption, he adds. ''One way or another, Mexico will be an issue.''

Even more important than a campaign issue will be Mexico's role as a gauge of United States isolationism, Jones says. Mexico has come to symbolize both the opportunities -- and pitfalls -- of the world's emerging markets, especially in Latin America.

Continued US involvement in those growing markets largely depends on how the US government and businesses respond to Mexico's current crisis, he says. The US must resist what Jones calls the ''short-term difficult times,'' the temptation to turn away from its southern neighbors -- especially when economic forecasts predict that is where much of the world's economic growth will be over the coming decade.

The US ''may be big and powerful, but we are not self-sufficient,'' he adds. ''If we are not successful [in that resistance], we will be closing the door on important economic opportunities.''

The US is ''optimistic about a future commitment to cooperation in fighting the drug-trafficking menace,'' he says. Evidence is mounting that drug money has infiltrated Mexican political and law-enforcement institutions.

But US officials are buoyed by Mr. Zedillo's declaration that drug trafficking is Mexico's No. 1 national-security threat. On May 4, Mexico's attorney general said that corrupt federal police have been helping Mexico's most-wanted drug lords avoid capture.

US officials are also watching Mexico's commitments to closing airstrips to drug-smuggling flights, and to new anti-money-laundering legislation that will tighten control and oversight of currency-exchange transactions.

According to the US government, Mexico is Latin America's principal money-laundering location.