Fox's Neoliberal Economic Program

["Jay Moore" <research@xxxxxxxxxxxxxx>]

Lessons to be learned from state where Mexico's president-elect governed
1.01 p.m. ET (1713 GMT) July 15, 2000
By Megan Lardner, Associated Press


SILAO, Mexico (AP) - Amid the strawberry fields and grazing cattle, a
sparkling industrial building rises from the side of the highway. Inside,
500 employees in crisp uniform dress shirts assemble electronic parts for
General Motors cars. The American flag flaps outside.

More than anything else, plants like American Axle are the crowning
achievement of Vicente Fox's term as governor of Guanajuato. Now that he has
been elected president, they offer a hint of the future he envisions for
Mexico.

Eduardo Acosto, a 22-year-old assembly-line worker at American Axle, likes
that Mexico just fine. He has worked here since the plant opened a year ago,
drawn by Fox's aggressive courting of foreign business investment.

"This is the best there is,'' Acosto said during a break from his 12-hour
weekday shift. "All the work here provides people with a living and more
opportunities to learn technical skills.''

But not all 4.6 million inhabitants of Guanajuato state are so enthusiastic.
Critics - and there are many - say Fox's economic expansion programs may
have been flashy, but came at the expense of social services like health
care and education.

"Foreign investment and economic growth have been the greatest successes of
Vicente Fox's government,'' said Emeterio Guevara, a political analyst at
the University of Guanajuato. "But the benefits have not always been equally
distributed.''

Since 1995, when Fox became governor of the rural, central state of
Guanajuato, foreign investment and exports have boomed. Between 1995 and
1999, the state's gross domestic product grew 21 percent. Exports shot up
from $1.6 billion in 1995 to $4.2 billion in 1998.

Foreign companies arrived in droves. Total investment in the state was more
than $2.1 billion between 1995 and 1999, creating nearly 50,000 new jobs. In
1999, the state's unemployment rate was half the national average.

"Our goal is to double the economy and the number of jobs this coming
year,'' said Manuel Ayala, international investment adviser for the state
Secretariat of Economic Development. "And we hope president Fox will help us
out.''

Since Fox initiated a state technical university system in 1996, some 8,000
students have graduated with marketable skills.

But in 1998, the latest year for which figures are available, illiteracy
rates were still the ninth-highest in the country and school attendance for
children between ages 6 and 14 ranked 24th among the 32 states.

Malu Micher, a state legislator from the opposition Democratic Revolution
Party, said wages have remained low in Guanajuato even as the economy grew.
Micher said the low unemployment rate is deceiving, because seasonal
agricultural workers and people who are underemployed are not included.

"Guanajuato has about 1.4 million male immigrants in the United States,''
she said. "That's why there's work here.''

While the northern and southern parts of Guanajuato remain marginalized, the
state's central zone, known as the "Industrial Corridor,'' is expanding
fast. Dozens of foreign companies have set up shop here in the last few
years - 30 related to General Motors alone. A Holiday Inn Express was
inaugurated July 8.

Juan Carlos Velazquez, a former General Motors engineer who now runs an
Internet company, attributes his success to the booming economy and
small-business loans Fox made possible.

"It's a different world from 10 years ago,'' he said.

Others would like to go back to the old world.

In the agricultural region of Irapuato, a leader in strawberry exports,
Mexican workers have been involved in a bitter yearlong legal battle over
wages with a U.S.-owned fruit company.

In the state's largest city, Leon, famous for its leather shoes,
manufacturers say competition from new Chinese-owned factories have caused
local sales to fall 40 percent over the past few months.

Guanajuato's daily newspaper Correo called Fox, a former Coca-Cola
executive, a "cellular governor'', out of touch with state businesses as he
traveled to the United States, Asia and Europe to court foreign investors.

Historian Arturo Miranda went even further: "As president, he will run the
country as a business, and sell it all.''

And for many listening to Fox's speeches since his election July 2, he
already appears to be in business mode - starting with his explanation of
how he will form his cabinet.

"We will be using the best headhunting firms,'' Miranda said. "This team
will consult its clients - clients being the people it is supposed to
serve.''

Fox said that as president, he will focus on the economy, education, job
creation, and crime. He has scheduled a meeting with President Clinton, and
says Mexico must demand an equal position in the economic arena.

Those in Guanajuato know much is riding on Fox's presidency. "The National
Action Party has everything to prove to the world,'' said Tomas Lopez, the
party's director in Leon.

Meanwhile, Fox's successor, governor-elect Juan Carlos Romero, who is from
Fox's party, plans to continue Fox's economic policies in Guanajuato.

"Globalization is here to stay,'' he said.