Mexico's move to drop tortilla subsidy produces backlash Reform viewed as threat to health, cultural identity

November 26, 1998|By KNIGHT RIDDER/TRIBUNE

MEXICO CITY -- In Mexico, you can raise the price of gas, increase taxes on telephone calls or charge more for driving on toll roads. But don't mess with the price of tortillas.

In an attempt to blunt the impact of dwindling oil revenues and a devalued peso on the Mexican economy, President Ernesto Zedillo's administration is dropping the subsidies that historically have kept the price of the country's staple food low. The move has produced a backlash from citizens and opposition politicians -- and even economists.

"These reforms are like political suicide," said economist Manuel Suarez Mier. "It shows that the government is arrogant, and just doesn't get it about our economy."

Zedillo's fiscal reforms also will raise the price of many public services for Mexico's 90 million people. Some fees, such as tolls and the price of gasoline, have already jumped, while new taxes on telephone calls are proposed for next year's budget. Zedillo even wants to eliminate the ministry that supplies cheap food for millions of the poorest Mexicans.

The new shock comes in the wake of a peso devaluation that effectively pushed up prices for many foods and consumer goods by about 10 percent in the past two months. The buying power of the average Mexican worker has dropped 80 percent in a decade, as a result of devaluations and inflation, and more than half the population lives in poverty.

Mexicans probably would just quietly endure the higher gasoline and phone bills, if not for one item: the tortilla. For millions, that's a threat not only to their pocketbooks, but also to their health -- and even to their cultural identity.

Mexicans revere corn, and not only for tortillas. The silks are an herbal remedy; husks are used to wrap tamales and as sculpting material by artisans. Even a corn fungus, huitlacoche, is a gourmet chef's delight.

"Corn, and the tortilla, were considered by the earliest of Mexicans -- well before the Spanish -- as gifts from the gods," said Sonia Iglesias, director of the National Museum of Popular Culture in Mexico City. "It's more important than oil to Mexicans. It is the elemental base of nutrition, and letting the price go up like this only reflects the cultural and economic crisis that's gripping Mexico."

Tortillas now cost about 15 cents per pound. If the Mexican congress adopts Zedillo's plan, tortilla prices will likely spike after Jan. 1, following the price pattern of milk, eggs and other commodities "liberated" from price controls by the administration in the past five years. Egg prices have crept up by about one-fourth in two years.

"The day the price goes up on tortillas, I'll stop eating eggs," Luciano Reyes, 28, said half-jokingly. The Toluca handyman must support his wife and three young children on $190 a month. "What's happening to tortillas just reminds me of how sad it is that my children are probably going to have even less opportunity for economic advancement than I did."

The government insists that more fiscal restraint is needed, even after three rounds of budget cuts this year, prompted by falling oil prices. Oil revenues account for nearly 40 percent of the government's budget. The moves, Zedillo has argued, will prevent the kind of economic disaster that has marked the end of other recent presidential terms.

Economists and global financial analysts praise Zedillo's plan to cut government spending. With the new taxes and higher food prices, analysts predict inflation this year will finish below 17 percent, an acceptable level considering the 50 percent annual inflation during the 1994-1996 peso crisis. Inflation-adjusted economic growth, although slower than in 1997, is expected to be about 4.3 percent this year.

But inside Mexico, Zedillo's plan is meeting heavy resistance.

Opposition members of Congress have walked out on meetings with Cabinet ministers trying to sell the budget plan. Protest marches sponsored by the leftist opposition Party of the Democratic Revolution have wended their way through Mexico City.

Meanwhile, average citizens brace for the future of tortillas, previewed by new "packaging surcharges" tacked on by many vendors.

"I make $260 a month," Aurelio Hernandez, a 26-year-old auxiliary police officer, said as he bought tortillas in Mexico City's Coyoacan neighborhood. "Now with the rumors of new taxes on things like telephones, I don't know what will happen.

"I'll disconnect the phone, because I must still buy tortillas."

Pub Date: 11/26/98

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