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Table: Zedillo's Rescue Scheme: Will It Work?


Cover Story

TABLE: Zedillo's Rescue Scheme: Will It Work?

PROPOSAL RISKS

PRICE Zedillo is calling for tight wage- Price controls will be

difficult to

CONTROLS and-price restraints to enforce. Already, dis

contented workers

hold down inflation. are being asked to take a

cut in real

Companies are to settle income.

for lower profit margins.

AUSTERITY Zedillo plans to slash the 1995 He is engineering a reces-

sion as

MEASURES budget by $5 billion and growth is expected to fall

to 0.5% or

slice the current-account less. This will put pres

sure on domestic

deficit in half, to $14 billion. banks and weak companies.

Mexicans

He hopes this will restore who expected increases in

social

investor confidence. spending will be dis

appointed.

RESCUE Mexico is asking the U.S., Can- The crisis dents image of

the star

PACKAGE ada, and other governments emerging market. More money

could be

and international banks for an needed if confidence flags.

U. S.

$18 billion package to stabilize commercial banks are un

happy.

the peso.

PRIVATIZATION To raise funds, Zedillo wants to Proposals may not be ag-

gressive

open ports, railroads, radio, enough to win back massive

amounts

and satellite telecom to private of cash from abroad. What

really

interests. He may allow sales interests foreign investors

of Mexican banks and open up is opening state-run elec-

tricity and oil sectors.

petroleum-related sectors.

CHARTS BY ALBERTO MENA/BW


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