A Return to 'Jurassic Park' in Mexico

MEXICANS are angry and frustrated. They wonder whether the decade-long roller-coaster ride to modernize the economy has been worth the effort.

Inflation soared to a high of 158 percent in 1989, dropped to 7 percent in 1994, and shot up to 51 percent in 1995. Crisis management was the buzzword among economists throughout the entire year.

Mexicans are beginning to listen to the sweet sound of the sirens - in this case political dinosaurs - who long for the time before the reformers initiated changes in the mid-1980s. Finger-pointing is a popular game, and politicians are looking for scapegoats. To their delight - and that of many in the public - former President Carlos Salinas de Gortari and the economic policies he professed are perfect targets.

A large and vocal group within the ruling Institutional Revolutionary Party (PRI) wants to do away with the "neoliberal" economic policies that have guided the nation. In January, 255 federal deputies from all parties signed a letter to President Ernesto Zedillo Ponce de Leon asking that the country return to its populist policies of the 1970s.

Neoliberalism seeks to reduce the central government's meddling in business, sell-off government-run enterprises, and open the borders to more trade.

Since the end of the 1980s, the government has divested itself of banks, a TV network, two national airlines, hotels, steel mills, movie theaters, and much more.

As multinationals scour the world for locations to expand, neoliberal policies have made Mexico look like a good place to invest. These policies also make Mexico attractive to Mexican investors, who in turn would create jobs. Research has shown that countries with more open economies have higher standards of living and more stability than those nations that choose a protectionist route.

In Mexico, this has proven to be true. Living standards are higher and income is distributed better today than it was in 1963, when the country was living the isolation dream, according to a US-based researcher.

What politicians fail to realize is that neoliberalism did not go far enough. Despite Mexico's tremendous leaps in the last decade, special interests have kept reforms from sweeping across the land.

Mexico is still shackled with outdated regulations that do not serve the public good. The volumes of administrative rules written over the years have created neither a worker's paradise nor a cleaner country. However, these efforts developed an entrenched, feather-bedded bureaucracy that serves selfish interests - a system that still continues today.

But political dinosaurs can make a lot of noise that grabs the public's attention.

They claim that they are genuinely motivated by the plight of the country's poor. In reality, they want to regain control of important political tools - patronage and passing out cash to friends or special-interest groups.

Neoliberalism is not an instant cure for Mexico's 40 million people living in poverty. Their situation is more complex - ranging from a centuries-old system that traps people on plantations to insufficient educational services. Getting the federal government out of running private companies frees up resources that would be better used in dealing with the suffering and oppression that haunt these millions - something that the populist measures of past administrations never managed to touch.

Mexico has made mistakes in its attempts to reform the economy. For example, when divesting itself of certain state-owned industries, some of the proceeds or properties may have gone to political elites. If true, those are criminal issues, not economic ones.

A real economic crime would be to allow the government to reverse a decade of effort so the dinosaurs and bureaucrats can return to the glory days of owning banks and operating airlines.