Thu, 04 Aug 1994

Mexican economic reforms

Regarding the article Peasants are crucial to the Mexican election, by Christine Tierney, that appeared in the edition of July 30, 1994 of your prestigious newspaper, I would greatly appreciate if the following comments could be published:

"In reference with the effects of the economic reforms carried out by the government of President Salinas in the countryside, as well as the government's amendments to the land reform law, I wish to state the following:

In recent years, the Mexican economy has undergone unprecedented changes. This has been the result of an adjustment process which began in 1983 as part of a strategy for stabilization and structural reforms. Structural reforms complemented and supported the stabilization process. They increased in importance and widened their scope as the reforms gained momentum and political support. The aim of these reforms goes well beyond the immediate task of stabilizing the economy. They form part of a fundamental reorientation in the government's development strategy, aimed at greatly increasing the role of market forces in the economy.

The strategy followed has laid the foundations for sustained development, and has sought to increase per capita income through greater efficiency of the industrial base in an environment of macroeconomic stability.

To a great extent, price stability and the establishment of the basis for growth have been brought about through the reduction and rationalization of public expenditure, a tax reform, the divestiture of public enterprises and price adjustments for goods and services supplied by the public sector.

At the same time, poverty alleviation is one of the main challenges that the Mexican economy faces. For many years, some peasant communities have lived under inequitable conditions. The solution to these community problems have not been, unfortunately, comprehensively nor swiftly implemented. Through the years, unsolved problems piled up. Although one out of every four Mexicans lives and works in rural areas, agricultural production accounts for less than eight percent of national products. The disparity is enormous. For that reason, one of the first tasks of the current Administration was to change the instruments for the rural sector that no longer promoted agricultural production and justice. The amendment to Article 27 of the Mexican Constitution brought forth a historic change in the land tenure system. By removing the insecurity that prevailed in the past regarding land property rights, the reform provides incentives for investment. It offers new rights to ejido members, establishing procedures by which they may lease or transfer land among themselves. It also allows civil associations and business firms to participate in agricultural activities, maintaining the limits on the size of land holdings established since the 1930's.

The economic reforms undertaken by President Salinas have not been limited to macroeconomic ones. The government has allocated significant resources to social programs through `Solidarity' by which the poorest segments of the Mexican population are attended to.


Mexican Ambassador