MEXICO'S CAPITAL IDEA
The real Mexican economy is beginning to stagger to its feet. For the last 10 years it has been swamped by cheap foreign loans and plentiful oil money. When times were good, Mexicans spared little thought for diversifying the economy and were certainly not going to let any outsiders do it for them.
That left oil accounting for more than 70% of the country's export earnings and a foreign debt of $97 billion.
Now the oil revenues have slowed to a trickle and the Mexicans have suddenly woken up to the realities of modern international trade. "But like over-enthusiastic children,' said one foreign banker in Mexico, "they are well intentioned but will almost certainly do it wrong and end up in tears.'
There is no doubt that the Mexicans realize that new industries, nurtured by foreign investment and expertise, are vital for the country's future. In July, Mexico decided to join the General Agreement on Tariffs and Trade (GATT), lowering protective trade barriers. This means that Mexican industry will not be as coddled as it has been. Mexico is also due to announce a bilateral trade agreement with the USA--the first encouraging signs have already appeared, with the lifting of an American embargo on Mexican tuna fish.