Bloomberg News

Miguel de la Madrid, Who Led Mexico Amid Inflation, Dies at 77

April 01, 2012

Miguel de la Madrid, the Harvard University-trained economist who was president of Mexico during a period of triple-digit inflation, has died. He was 77.

Mexico’s Foreign Affairs Ministry confirmed de la Madrid’s death today in an e-mailed statement. The ministry said he died today in Mexico City.

De la Madrid’s rule, from 1982 to 1988, was a period blighted by the aftermath of Mexico’s credit default and ensuing inflation that peaked at a record 180 percent. Wage and price controls helped slow inflation to 71 percent by the time his term ended in November 1988.

A member of the once-dominant Institutional Revolutionary Party, or PRI, de la Madrid failed to react promptly to two powerful earthquakes in Mexico City in 1985. He refused foreign aid for a couple of days following the tremors that claimed more than 9,500 lives, undermining support for his party, which came close to losing the presidency when his term ended in 1988.

“The earthquake toppled Mexico City, but it also toppled the PRI’s empire,” Ilan Semo, a historian at the Iberoamerican University in Mexico City, said in a Dec. 19 interview. “It killed two birds with one stone.”

Many Mexicans believe the opposition candidate, Cuauhtemoc Cardenas, lost the 1988 presidential race only because massive vote-rigging by the PRI made sure that its choice to succeed de la Madrid, Carlos Salinas de Gortari, emerged on top. The PRI did lose its two-thirds majority in Congress that year for the first time in almost five decades, meaning it couldn’t change the constitution without support from the opposition.

Troubled Economy

In 2000, the PRI surrendered its 71-year hold on the presidency to Vicente Fox of the National Action Party.

Miguel de la Madrid Hurtado was born on Dec. 12, 1934, in the western state of Colima. He became deputy director of the state-owned oil company Petroleos Mexicanos in 1970 and served as budget minister under the administration of his predecessor Jose Lopez Portillo, according to “Presidents of Mexico,” a 2001 book by Jose Manuel Villalpando and Alejandro Rosas.

He studied law at Mexico’s National Autonomous University in Mexico City and received his master’s degree in public administration from Harvard in 1965.

De la Madrid inherited a troubled economy after President Lopez Portillo defaulted on the government debt and nationalized Mexico’s banks months before he left power. During his inauguration speech, de la Madrid announced a devaluation of the peso.

As the currency weakened, inflation reached 180 percent in February 1988, the fastest-ever pace, according to Bloomberg data going back to 1974.

Asset Sales

De la Madrid initiated the sale of some of the country’s 1,200 government-owned companies, starting with banks, Semo said.

De la Madrid was one of the first foreign-trained leaders, called technocrats, to gain power in Mexico. He was followed by Salinas, who crafted the North American Free Trade Agreement with the U.S. and Canada, and President Ernesto Zedillo, who bet Mexico’s economic future on the free markets by allowing the peso to float freely for the first time.

De la Madrid’s death was erroneously reported Dec. 17 on the Twitter accounts of the PRI, the party’s presidential contender Enrique Pena Nieto and President Felipe Calderon, according to media reports. Calderon later corrected himself, saying that de la Madrid was alive, although in grave condition.

To contact the reporter on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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