Mexico waits in fear under the volcano

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The Independent Online
On a clear day, you can see the snow-capped 18,000ft Popocatepetl volcano from Mexico City. Clear days in this smog-choked capital are rare but everybody knows the "Popo" has been spewing the kind of cinders and gases that could precede its first major eruption in nearly 200 years. To many Mexicans, particularly the deeply superstitious Indian population, the volcano's activity is an ominous sign. While politicians, bankers, businessmen, intellectuals and the media muse over the outcome of Bill Clinton's $40bn (£25m) loan-guaranteepackage now before the US Congress, there is a strong feeling in the streets that, US bail-out or not, something here is about to blow.

The continuing collapse of the peso and of the Bolsa (stock exchange) after opening yesterday were seen as a reflection not just of the delay in the American bail-out but of President Ernesto Zedillo's domestic political woes. The peso, which stood at 3.5 to the dollar in early December, tottered 12 per cent yesterday morning to around 6.5. The Bolsa fell 3 per cent during the morning to its lowest point since 1993.

Even if the US Congress comes through, President Zedillo will still face economic crisis and political unrest. Ironically, the Mexico bail-out debate stars two weak presidents: one, Mr Clinton, at the mercy of a Republican-controlled legislature; the other, Mr Zedillo, under fire from his opposition, his own party's hardliners, his party's powerful provincial bosses and an increasingly incredulous populace.

Mexicans are angered by reports that the US has imposed political conditions on the loan package, notably a curb on illegal immigrants, tougher action against drug lords and a less amicable policy towards the Cuban leader, Fidel Castro. "In front of the United States, humiliation," said this week's cover of Mexico's best news magazine, Proceso.

The leftist opposition and the independent group Civil Alliance, which uncovered widespread fraud in last August's elections, are organising a "plebiscite" on 12 February over whether Mexico should accept the US bail-out.

The focus of Mr Zedillo's domestic political woes is the southern state of Tabasco, which has seen violent civil unrest this month. The populist opposition Party of the Democratic Revolution (PRD) called on Sunday for a campaign of civil disobedience in the state - refusal to pay taxes, water or electric bills - which could spread across the nation.

The PRD is refusing to accept the result of November's state elections, in which Roberto Madrazo, of the ruling Institutional Revolutionary Party (PRI), was declared victor. On Sunday the PRD leader, Cuauhtemoc Cardenas, told thousands of supporters in the state capital, Villahermosa, that he would not participate in dialogue with Mr Zedillo until the Tabasco problem - meaning Mr Madrazo's resignation - was resolved.

The beleaguered President is widely said to have agreed to the PRD's demands earlier this month to get an emergency multi-party "National Political Accord" off the ground. But the local PRI hierarchy rebelled, demonstrating Mr Zedillo's lack of control over his party and Mr Madrazo is refusing to resign.

Events have turned Mr Zedillo, only two months into office and with 70 to run, into almost a "lame duck" president. The $40bn in US guarantees, if passed, will by no means guarantee his survival. Mexicans, including those who voted for him, have been stunned to learn that the would-be economic stability presented to them in the election campaign was a deliberately prolonged facade.

The Big Lie had two aims: one, to suggest economic well-being and keep the PRI in power into its eighth successive decade; and two, to allow the outgoing president, Salinas de Gortari, to escape with his image unscathed in the hope of landing the covetedleadership of the new World Trade Organisation.

Mr Zedillo was quoted as saying last week that the economy was in "intensive therapy". Against the backdrop of political instability and his lack of control even over his own party, many would say the Mexican system, and the PRI, are on their deathbed.

The economic crisis was brought home to Mexicans by statistics such as these: l The construction industry, vital to create the infrastructure to take Mexico out of the Third World and away from foreign dependence, lost up to 15 per cent of its companies over the past year and 50 per cent of companies are currently idle.

l Around 10,000 restaurants are threatened with closure. Fast-food outlets saw turnover fall last year by 40 per cent, luxury restaurants by 30 per cent, small bars by up to 50 per cent.

l Nissan said it would suspend plans to export two US-assembled models to Mexico because their retail prices would be prohibitive.

l Union officials said Volkswagen's Mexican subsidiary was laying off 35 per cent of its blue-collar workers.

l General Motors is threatening to close its Mexico City plant this week and lay off more than 2,000 workers.

Despite such problems, and Mr Zedillo's rhetoric of democratic opening, it is remarkable that the Mexican media, with a few honourable exceptions, largely toe the ruling-party line. The long-standing system of embutes (cash-packed envelopes), under whichthe party or government pays off journalists, is far from dead.

The left-wing daily Jornada reported that Foreign Ministry officials had handed out cash to journalists recently to ensure a favourable press for the embattled Foreign Minister, Jose Angel Gurria. The Ministry denied handing out cash but the scenario wasso familiar it raised few eyebrows here.

Six people committed suicide last week by jumping in front of Mexico City's metro, an unprecedented figure. Others joined the "black economy", selling balloons, cleaning windscreens or juggling at traffic-lights. Tens of thousands flocked to northern border towns in the hope of slipping into the US, even if only for the day, to earn increasingly valuable dollars.

In Mexico City poor families forked out their hard-earned pesos at the Coliseo at the weekend to watch wrestlers such as "The Wild Beast" and "Cat Man" skilfully pretend to hurt each other. In a fantasy world that everyone knew was just that, "la Crisis" was momentarily forgotten.