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Mexico Inc. Goes Public (Int'l Edition)


International -- Cover Story -- Latin America

MEXICO INC. GOES PUBLIC (int'l edition)

It may be a sign of changing Mexican government-business relations. All year long, President Ernesto Zedillo Ponce de Len has been too busy to consult with the country's most powerful business group--the elite and secretive Mexican Business Council. Traditionally, this council, made up of the country's 40 top chief executives, meets with the Mexican President twice a year and with Cabinet secretaries on a monthly basis. It's "a very honest give and take," says the current council Chairman Claudio X. Gonzalez, CEO of Kimberly Clark de Mexico.

He expects Zedillo to meet with the group before yearend. But the Mexican President's arm's-length treatment of the council may be part of his push to make decision-making more open and to minimize the appearance of privilege. No interest group has carried as much clout as the council, or been as shrouded in secrecy. Founded in 1961 after Mexico defied U.S. pressure and recognized the regime of Cuban leader Fidel Castro, the club's first charter even prohibited the keeping of minutes at meetings.

CHANGING TIMES. The council's original purpose was to explain the Mexican business community's view of Mexican government policies to the U.S. Recalls Juan Sanchez Navarro, 82, executive vice-president of beermaker Grupo Modelo and a founding member: "We wanted to present the true image of Mexico, to show that we were not a socialist country like Cuba." Later, as Mexico changed, so did the council. When President Miguel de la Madrid began opening Mexico's markets in 1985, council members threw their support behind him. Their companies had the capital to compete in a less protected economy.

De la Madrid welcomed--and even enhanced--the council's influence. In 1987, as his term was ending, he suggested that the council conduct informal interviews with the seven top candidates for the nomination of the ruling Institutional Revolutionary Party (PRI) party to succeed him. The one who impressed them the most was Carlos Salinas de Gortari. He was later selected as the PRI candidate and went on to win the election. When the Mexican press found out about the interviews, it condemned the pasarela, or "beauty contest."

PULLING STRINGS. These days, the pasarela has gone by the wayside. "It was a mechanism that was apropos at one time," says a council member, "but it was beginning to have a negative connotation, focusing on the group's mysteriousness, eliteness, and its ability to pull power strings." So, when Salinas prepared to choose his successor last year, the council chose not to interview candidates. Their instincts proved to be on target: A few months later, Zapatista guerrillas in Chiapas staged an uprising to demand more democracy and a reduction of privileges for the elite.

As Mexico continues to open up, the Mexican Business Council's influence may diminish. But no government will be able to completely ignore the voices of Mexico's top 40 industrialists, which include the likes of Telmex' Carlos Slim and Banamex' Roberto Hernandez. In time, the council may resemble the lobby groups of other nations, which are influential but are rarely secret power brokers. That, at least, is what the council would like Mexicans to believe. "There's no hidden agenda. Maybe we'll have to shed some of our secrecy," says Gonzalez. In the meantime, however, the council still wants its long-delayed meeting with the President.By Geri Smith in Mexico City


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