Mexico's First World debut is canceled by falling peso Plunging value of Rolling Stones ticket symbolizes fading middle-class dream

January 23, 1995|By James Bock | James Bock,Sun Staff Correspondent

MEXICO CITY -- In a last blast of First World high living, Mexicans packed the stands for the Rolling Stones last week.

But the Voodoo Lounge World Tour ran into voodoo economics as the value in dollars of the 195-peso ticket dropped from $57 to $36 because of a spectacular plunge of the Mexican currency.

It took "Los Stones" three decades to come to Mexico. Their fans don't expect to see them again soon.

The year 1994 started turning sour immediately, a year that was supposed to bring Mexico into full economic partnership after approval of the North American Free Trade Agreement. First it was the extraordinary peasant revolt in Chiapas on New Year's Day 1994. Then, a few months later, the ruling party's candidate for president was assassinated.

Now, after a surprise Dec. 20 devaluation, the Mexican currency has headed south. Once beguiled by promises of First World status, the emerging middle class has shelved the Mexican Dream. They anticipate Third World-style hard times.

That 195 peso Stones concert ticket would be priced at 314 pesos if it came to market today. And that's the least of Mexicans' troubles as they face 1995.

Their currency and savings are worth 40 percent less, credit-card and mortgage interest rates are doubling, and livelihoods are threatened by recession. Moreover, the dollar-hungry nation is at the mercy of U.S. investors and politicians.

Mexicans are by turns angry and disillusioned, cynical and resigned.

"We were going to buy a house and get married this year," says Mireya Ventura, 25, a drug laboratory representative, sitting in a park with her fiance, Fernando Romero. "But now our plans have changed. We'll have to wait."

The villain for many is former President Carlos Salinas de Gortari, who opened Mexico to a flood of speculative foreign capital. He is bitterly accused of hiding the peso's weakness until it was too late -- and he was safely out of office and campaigning to head the World Trade Organization.

Left holding the bag of devalued pesos -- and a devalued presidency -- is his successor, President Ernesto Zedillo Ponce de Leon. The 43-year-old technocrat took office seven weeks ago. He is the latest (some say the last) in a 65-year string of leaders from the ruling Institutional Revolutionary Party, known by its Spanish initials as the PRI.

Mr. Zedillo is accused of lying about the peso's stability and then botching the devaluation, setting off what amounted to a run on Mexico's foreign-currency reserves.

Mexican presidents are often assailed as near-dictators, but Mr. Zedillo is criticized as weak -- "The President Who Can't," in the words of one Mexican news weekly.

Trying to seize the initiative, Mr. Zedillo got Mexico's political parties to agree last week to seek "definitive" electoral reform, and he engineered talks with rebels of the Zapatista National Liberation Army in the southern state of Chiapas.

The president's political performance this year will affect Mexico's prospects for economic recovery, as foreign investors decide whether the nation of 90 million on the U.S. southern flank is stable enough for investment.

Mexico's post-devaluation minimum wage amounts to $3 a day -- less than the cost of a McDonald's Happy Meal in the trendy Zona Rosa.

The streets of the smog-bound capital teem with vendors -- so-called "micro-impresarios" -- living barely off the lean cityscape. They form part of the 45 percent of Mexicans who now earn the equivalent of less than $40 a month.

"La crisis" will make their hard lives even harder as growth nears a standstill or the economy shrinks. Wage increases are pegged at 7 percent for 1995 while government projections -- widely considered rose-colored -- are of 19 percent inflation. Prices in Mexico City markets were up 9 percent on average in the past month alone, one survey shows.

The poor have the least, but the once upwardly mobile middle class -- about 15 percent of Mexican workers -- stands to lose the most in 1995.

They are people like Irma Garcia, 49, a federal worker and single parent. She moved into a management position two years ago at about $1,600 a month, enough to support daughter Susana, 20, and son Max, 18. The higher salary qualified Mrs. Garcia for a mortgage on a three-bedroom condominium, and she bought a 1994 Mexican-made Volkswagen Beetle.

But now the government is slashing the budget, and Mrs. Garcia has been bumped down to a job that pays far less -- $240 a month.

The days of buying frozen Chinese dinners at the Price Club or picking up hamburgers at the Burger Boy are over.

She figures the family will eat meat once a week. She also fears the bank will at least double the 28 percent rate on her adjustable, 10-year mortgage. The notice is due any day.

Mrs. Garcia's monthly house payment alone will be at least twice her salary. "They'd have to stretch my mortgage out for 50 years for me to pay," she says. "I'm at the point of pulling my children out of school and putting them to work."

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