Bare Bones

The President calls for cuts

It was hardly the fiesta that Mexicans have come to expect when a new President takes office. Indeed, by past standards, last week's inauguration of Miguel de la Madrid Hurtado, 47, as Mexico's 21st President since the 1910 revolution was a distinctly low-budget affair. Gone were the sleek limousines that had carried dignitaries to past ceremonies, the flower petals carpeting the streets and the thousands of peasant farmers bused into the capital at public expense. Instead the guests pulled up in ordinary black sedans, the streets were strewn with confetti rather than flowers, and masses of campesinos stayed home. A cartoon in the daily Excelsior said it all. Spoofing traditional views of the head of state astride his noble steed, the newspaper showed De la Madrid jumping on a horse's skeleton.

The bare-bones inauguration was appropriate for a country facing severe economic problems. Hoping to cash in on Mexico's oil bonanza, outgoing President Jose Lopez Portillo had embarked on a costly development program. But when oil prices dropped and interest rates shot up, Mexicans rushed to trade their pesos for more stable dollars, forcing a devaluation. In the ceremony at the Congress of the Union hall last week, Lopez Portillo bequeathed to his successor the green, white and red sash that is the emblem of office. He also left a foreign debt of $80 billion and not enough money even to meet the interest payments.

To show that he would waste no time tackling the country's problems, De la Madrid began to announce new government appointments the day before the inauguration. For the key post of Finance Secretary, he chose Jesus Silva-Herzog, a Yale-educated economist who negotiated a $3.8 billion credit for Mexico this fall from the International Monetary Fund. De la Madrid also reappointed Miguel Mancera Aguayo as director of the Bank of Mexico. Mancera Aguayo had resigned from the post last September after Lopez Portillo imposed strict regulations on currency exchange. Both men are thought to advocate stringent measures to improve Mexico's troubled economy.

With unusual candor, the new President told his countrymen that "Mexico is undergoing a grave crisis." He noted that unemployment was high (between 10% and 15%) and that inflation would reach almost 100% this year. De la Madrid expressed concern about the "mistrust and pessimism" engulfing the country. "We are not a defeated or bankrupt nation," he said. "I will not allow our homeland to crumble away through our fingers."

In his 70-minute inaugural speech, De la Madrid outlined a ten-point austerity program for "reordering the economy." It included deep cuts in government spending and higher prices for public sector goods. (The next day gasoline prices were doubled.) He promised to peg the peso at a more "realistic" rate of exchange and announced plans to restructure the federal bureaucracy and eliminate waste.

Mexico's new chief executive also pledged to move forcefully against the public graft and featherbedding that had flourished under Lopez Portillo. Said De la Madrid: "Mexicans are a deeply moral people and they demand that I pursue all forms of corruption. I will govern by example."

There was one small but telling sign last week that Mexico's new President intends to take that promise seriously. When De la Madrid set off from his home for the inauguration ceremony, he instructed his chauffeur to heed all the stop signs. -

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