Mexicans angered by US loan conditions

Offers of a financial bail-out have again raised the sovereignty issue, writes Phil Davison in Mexico City

In the United States, President Bill Clinton's State of the Union address this week was widely billed as a political success. From the point of view of his southern neighbour, Mexico, his words could hardly have been more ill-chosen.

Mr Clinton was pressing for congressional approval of a $40bn (£25bn) loan guarantee to Mexico. Ironically, his words merely fuelled Mexico's ancient suspicion of US intentions. "We have to act. Not for the Mexican people . . . this legislation is the right thing for America," Mr Clinton said. Not the sort of language Mexicans like to hear.

In a country that lost almost half its territory to the US a century and a half ago, Mr Clinton's words sparked a debate over the motives of its big northern neighbour. "National sovereignty and dignity" have become catchwords in speeches by the Mexican President, Ernesto Zedillo and the Foreign Minister, Jose Angel Gurria, as they deflect criticism of the conditions that are reported to have been attached to US assistance.

The populist opposition leader, Cuauhtemoc Cardenas, flanked by dissidents from Mr Zedillo's ruling Institutional Revolutionary Party (PRI), called for a plebiscite on whether to accept the US bail-out. PRI dissidents were present at the rally in Mexico City, emphasising splits in the party that has ruled for 65 years.

Mr Cardenas's protest carried particular significance, as his father, General Lazaro Cardenas, nationalised Mexico's oil industry in 1938. Under the reported terms of the US loan package, Mexico would offer its oil revenue to the US Federal Reserve as a guarantee against the $40bn loan.

Mr Gurria admitted on Wednesday that under the terms of the US loan package being debated by the US Congress, Mexico's oil revenues would stand as guarantees until 2005 but would only be used if Mexico could not meet its repayment obligations. "This in no way violates our sovereignty over our natural resources," he said.

The sovereignty theme, recurrent since the US captured a large swathe of former Mexican territory in southern California and Texas, came at a bad time for Mr Zedillo. Less than two months after taking over from Carlos Salinas de Gortari, the new President faces an economic crisis, attacks from both left and right, an Indian peasant guerrilla movement in the south-eastern state of Chiapas and splits within the PRI over the pace of democratic reform.

Perhaps with one eye on his US congressional audience, Mr Zedillo has taken to speaking of "the new Mexican democracy." The trouble is, presidents from the PRI have been using similar phrases - "perfecting our democracy" was a favourite - for more than six decades.

A much-flaunted accord with left and right-wing opposition parties, reached last week, is already on the rocks.

Mr Zedillo apparently promised new elections in the state of Tabasco after reports of fraud. But, the governor, Roberto Madrazo, of the PRI, refuses to resign. A truce agreed with the so-called Zapatista guerrillas in the state of Chiapas, bordering Tabasco, is also dependent on new state elections.

After sacrificing the Finance Minister, Jaime Serra Puche, over the peso crisis in December, Mr Zedillo's second cabinet reshuffle earlier this week was a pathetic affair. Fausto Alzati resigned as Minister of Education after the media revealed that his would-be degree and doctorate from Harvard existed only on his "CV" and in his imagination.

While he awaited the US congressional vote on Mr Clinton's proposed loan package, Mr Zedillo's problems were increasingly evident on the country's streets this week. So-called peseros - minibuses which, with the underground, form the backbone of the public transport system - were set on fire by angry commuters after drivers doubled prices to keep up with rising petrol costs.

Since pesero prices are set by the government, police arrested 350 drivers and confiscated their vehicles. Hundreds of drivers then blocked streets in the suburbs to demand their colleagues' release, creating chaos. n To emphasise Mr Zedillo's isolation,several hundred well-dressed middle-class women protested against inflation and the peso crisis outside the presidential palace on Thursday. Met by a wall of riot police, the women handed the policemen pink and red roses, laid bouquets outside the palace gates and left peacefully.

Middle-class housewives were once a pillar of support for the PRI, although many have turned recently to the conservative National Action Party (PAN).

Another consequence of the economic crisis was that some currency-exchange houses in the capital suspended dollar trading on Wednesday after the peso nudged the six-to-a-dollar mark. That was good news for tourists. But for Mexican importers and middle-class families who send their children to US schools or universities it meant their expenses doubled compared to those of two months ago, when the peso was just over three to a dollar.

The crisis began after the government devalued the currency, only to see it fall further after it then floated the peso. Inflation figures released this week confirmed the government's fears. For the first two weeks of January prices rose by 2.3 per cent, suggesting that the pre-crisis forecast of a 4-per-cent inflation rate for this year would have to be revised upwards to 20 per cent or more.

There were also signs that the economic crisis was leading to an increased flow of illegal Mexican immigrants into the US. On the Mexican side of the Rio Bravo, just south of El Paso, in Texas, "guides" said that up to 300 people had crossed daily this week, the highest figure for many months. The "guides" said that they were charging $300 to help people across - 10 times the amount they were charging last year.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
News
i100
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
health
News
science
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
News
Chuck Norris pictured in 1996
people
Arts and Entertainment
Sarah Lucas, I SCREAM DADDIO, Installation View, British Pavilion 2015
artWhy Sarah Lucas is the perfect choice to represent British art at the Venice Biennale
News
A voter placing a ballot paper in the box at a polling station
i100
News
people
Arts and Entertainment
The Queen (Kristin Scott Thomas) in The Audience
theatreReview: Stephen Daldry's direction is crisp in perfectly-timed revival
Sport
football
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultant - Dublin

£13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...

Ashdown Group: Marketing or Business Graduate Opportunity - Norwich - £22,000

£18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + Commission: SThree: Are you great at building rela...

Ashdown Group: Database Analyst - Birmingham - £22,000 plus benefits

£20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power