MEXICO: DE LA MADRID HOPES FOR UPBEAT VISIT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91B00874R000100310003-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: July 27, 2011
• Sequence Number: 3
• Content Type: MISC

Sanitized Copy Approved for Release 2011/07/27: CIA-RDP91 B00874R000100310003-5
DRAFT
.NID SPECIAL ANALYSIS
MEXICO: De la Madrid Hopes for Upbeat Visit
Recent Developments
De la Madrid is likely to appear cautiously optimistic
because the IMF accord affords his financially battered
administration a respite. He almost certainly is pleased that
the agreement provides lenient performance targets and additional
compensation if international oil prices plunge or Mexico is
De la Madrid's Agenda
Despite the IMF agreement, de la Madrid will come to
Washington seeking additional financial help. He may ask for a
US contribution to a $1.5 billion loan. Part of the loan could
be used to tide Mexico City over until commercial bank creditors
formally agree to provide new funds, which could take several
months. He also is likely to request that US officials press the
President de la Madrid, now in the fourth year of his six-
year term, will arrive in Washington next week with a greater
sense of confidence in Mexico's near-term prospects than during
his last meeting with President Reagan in January. Mexico City
recently concluded an agreement with the International Monetary
Fund and the ruling party achieved a virtual sweep of state
elections in the opposition stronghold of Chihuahua last month.
While in Washington, de la Madrid will seek to highlight positive
aspects of bilateral relations while attempting to skirt over, the
topics of Central America and Mexico's longer-term problems.
unable to realize moderate growth.
The Mexican leader also can take satisfaction from the
elections in Chihuahua and several other states. In Chihuahua,
his rulin art
/accomplished its aim of trouncing
the onservative National'Action Party and other opponents. The
PAN's peaceful protests have won the support of some business and
Church leaders in the north, but these actions are unlikely to
banks to speed a settlement.
In making a case that Mexico is worthy of such support, de la
Madrid will portray his administration as dealing responsibly
with its financial difficulties. He will place heavy blame for
Mexico's economic tfoubles on the recent plunge in international
oil prices. At the same time, he will point to certain actions
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his administration has recently taken as evidence of his
intention to reform the economy. Likely examples include the
closure of a large debt-ridden, government-owned steel mill, the
raising of 'tares for public transportation, and negotiating entry
into GATT
On other issues, de la Madrid almost certainly will stress
his personal commitment to a drug eradication program and efforts
to combat narcotics trafficking. He may appeal for greater US
resources to further these efforts. He also is likely to ask for
greater cooperation to promote tourism and encourage foreign
investment. He will applaud Washington's plans to lift the US
embargo on Mexican tuna.
Outlook
The IMF accord provides Mexico with only limited breathing
room, and serious problems remain. GDP is projected to fall 4 or
5 percent this year and inflation is expected to reach 100
percent. De la Madrid is likely to resist pressure to adopt
politically difficult economic reforms because he knows they are
unpopular with many Mexicans and opposed by labor and other
powerful interests within his ruling party.
More generally, de la Madrid appears to have adopted a short-
term perspective on Mexico's economic and political problems. He
is unlikely to push for structural adjustment that would attack
the root of the economic problems. Instead, he seems to be
hoping to buy time for his last two years in office. Mexico's
success in getting lenient IMF terms apparently has convinced the
Mexican leader that this approach works and he is likely to
continue to
i
pursue
t in Washington.
Over the longer term, however, the course de la Madrid is
following could worsen Mexico's problems. The country's
demographic. profile argues for reform sooner rather than later to
minimize the-,eventual trauma associated with economic structural
adjustment.
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