[PEN-L:2426] The beginning of the end of neo-liberalism?

[D Shniad <shniad@xxxxxx>]

Is the reign of neo-liberalism breaking down?  Two interesting articles
describing developments in Mexico and Russia:


La Jornada, January 12-13, 1996

PRI LEGISLATORS CALL FOR END TO NEOLIBERALISM

     Legislators from the ruling Institutional Revolutionary
Party (PRI) presented party leader Santiago Onate Laborde
with a forty page document outlining their recommendations
for party and government reform.  Among the most noteworthy
recommendations was a call for the government to abandon its
strict adherence to neoliberalism in favor of an economic
policy that prioritizes economic growth and development,
with a special focus on the most disadvantaged sectors.  The
legislators argued that such a change is necessary if the
PRI hopes to maintain power.  Opposition parties responded
to the news by demanding concrete actions by PRI legislators
to illustrate their change in attitude.  The National Action
Party (PAN) said the PRI legislators' were engaged in a
farce.  If they really wanted to change the economic
policies of the government, they should have voted against
the 1996 economic program a few weeks ago.

Perhaps the most unique response was that of PRI labor
leader Fidel Velazquez, who said that there has never been a
neoliberal government in Mexico, and that all PRI
governments - including that of Carlos Salinas de Gortari -
"have emerged from the breast of the Mexican Revolution."

____________________________________________

Globe and Mail	January 18, 1996

YELTSIN DROPS REFORMER TO WIN VOTES

Datelined Moscow, this story describes the forced resignation of deputy
prime minister Anatoly Chubais, described as "the leading architect of
Russia's economic policies."  According to the writer, "Mr. Chubais... was a
symbol of the wrenching reforms that have divided Russia into a society of
rich and poor."

Further in the article, Communist leader Gennady Zyuganov is quoted as
saying that "[Boris Yeltsin] is ridding himself of the entire team which has
brought the country to total bankruptcy and humiliation."

Clearly, however, the struggle over the future direction of the country's
economy is far from over.  "Western economists are worried that the
Kremlin might shift away from the tight money anti-inflation policies of
Mr. Chubai.  Mr. Yeltsin's chief economic aide, Alexander Livshits,
criticized Mr. Chubais for failing to pay overdue wages to public sector
workers.... Mr. Livshits, rumoured to be the leading candidate to replace
Mr. Chubais as economic czar in the Yeltsin cabinet, promised 'serious
corrections' to the government's economic and privatization policies."

A western economist working in Moscow is paraphrased in the article as
saying that it would be catastrophic for the government to pay all of the
wages and pensions that are overdue.

At the same time, IMF officials are in town this week to negotiate a $9
billion (US) loan to Russia.  They "...have decided to continue the
negotiations despite the departure of Mr. Chubais... "

The article concludes with the western economist's observation that "If the
IMF is satisfied that the loan should be granted, and if the economic
changes continue, it would be proof that Russia [continues to be]
'fundamentally committed' to the path of market policies."


Sid Shniad