July 10, 1996 in Nation/World

The Selling Of A Country Mexico’s New Free-Market Policy Touched By Old Scandals

Los Angeles Times
 
Tags:economy

The widening corruption probe into former President Carlos Salinas de Gortari’s family wealth poses a growing threat to Mexico’s multibillion-dollar privatization plan, according to independent economic and political analysts here.

As prosecutors Tuesday continued to question prominent businessmen who made fortunes investing in Salinas’ privatization program - allegedly in tandem with the former president’s older brother - the analysts said the process of tracking more than $100 million linked to Raul Salinas in bank accounts overseas may scare off potential investors here and abroad.

President Ernesto Zedillo’s government launched the investigation but is equally dedicated to selling the nation’s railroads, airports, seaports, telecommunications and petrochemical operations. The huge government auction - a continuation of the Salinas privatization program - is a cornerstone of Zedillo’s free-market economic policies and his plan to guide Mexico out of economic crisis.

Billions of dollars in potential investment by U.S. companies are at stake, and Zedillo’s government needs the investment to provide new jobs at a time when record unemployment here is fueling migration to the north.

Many seaports already have been sold, and several large American corporations are considering bidding on the nation’s railway system. Zedillo’s government is drafting legislation to permit the airport privatization next year, and the president has vowed that the process will continue despite the emerging scandals.

But, while Zedillo’s privatization is backed by progressive members of his Institutional Revolutionary Party (PRI), many in the old guard oppose it. The PRI was instrumental six decades ago in nationalizing many of the industries Zedillo is now selling.

Members of Mexico’s political opposition also have said they hope to use congressional hearings starting later this week on Raul Salinas’ role in the sale of the nation’s second-largest television network to question a wide range of privatization deals under the Salinas administration.


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