Well, well. Things might be improving in at least one aspect down Mexico-way.
Hi Tom,
Have been on Vacation, just returned....
I looked at an article in the Proceso magazine (in Spanish only)....
My take is that the action taken seeking impeachment of the Finance Minister and others, is the result of Democracy "a la Mexicana".... frankly not much different than anywhere else where a big battle for control of power is taking place. Particularly now that a greater freedom has been found.
The Mexican Congress (formerly a rubber stamping institution of the PRI, or Mexican for Monarchy), is no longer so, about a year and a half ago, or so, The PRI lost control of the lower house (Camara de Diputados), and it is now controlled by some form of informal alliance between the PAN (right), and the PRD (left).
The situation (for the PRI), worsen when Cuahutemoc Cardenas won the election for the D.F (Mexico City), government who has been in power for about the same period of time as the new power line-up.
Apparently, The PAN renieged in their informal power sharing deal and sided with the government in order to authorize the funding of the rescue plan for the ailing Mexican banks. They created an agency called: Fobaproa, (Fondo Bancario de Protección al Ahorro),
Translation: Banking Fund for the Protection of Savings....he, he, he, he..... I love the term "Protection" (sorry I can not resist the sarcastic laughter....)
A government agency charged with the rescue of the Mexican Banks after the 1994 peso devaluation involving 552 billion Pesos (or $55 billion USD today, at the time, more like $70 Billion USD), worth of unpaid loans to a number of banks.
Overall, not more than 30% is expected to be recovered once the sale of whatever assets as offered collateral are sold off.
The rest ? Well..... there is the rub..... originally the PRI wanted to convert this into public debt.... The PAN and the PRD did not agree, seeing this as an excellent opportunity to start flexing their new political muscle, (not to mention to give the PRI a few frustrations, indeed a spoonful of their own medicine, which these parties endured for so many years...).
This goes back to the privatization of banks, (under Presidente Salinas de Gortari), after Presidente Lopez Portillo nationalized them in his famous speech of 1982 national address, in which he said that in spite of his efforts to save the peso from devaluation....I quote: "fighting like a dog".... he had to devalue, and further nationalize the banks......
So Mr. Guillermo Ortiz, Governor of the Central Bank, and Former Finance Minister, (1991-92) and who was the mastermind behind such privatization, and from the rescue package, is now to be made scapegoat..... (apparently, willingly so.....)
More information about this subject appeared in the Economist issue of September 5th. - 11th./1998. under "The Americas" section, title "Time to settle up".
And also more details in this post: #reply-5615921
The update, of all of this is in the Revista Proceso, a good balanced magazine that covers Mexican Political life well.... However, Proceso is only in Spanish.
proceso.com.mx
Apparently, one of the main personalities of the PRD (a former PRI great), Porfirio Muñoz-Ledo disagrees with the main PRD opinion of now agreeing with the PAN's position of having sided with the government in the FOBAPROA issue....
So now, Mr. Porfirio Muñoz-Ledo is launching his own pre-candidature for the 2000 election for the Mexican Presidency.....
All is valid in, war, love...... and politics.....
The bottom line is that with this new found "democrazy" the different opinions are now being heard..... however.... everyone pulling in different directions, will the people really benefit....?
Just a question, no judgement passed.....
The risks and tribulations of investing in Latin America.
Regards....
Z. |
