Mexico reels under foreign debt burden

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MEXICO CITY—Luis Echeverria [president of Mexico from 1970 to 1976] handed down to Jose Lopez Portillo a debt of approximately $25 billion in 1976. In 1982 Miguel de la Madrid inherited a debt of $81 billion from Lopez Portillo. In the year-and-a-half of the current president's administration, the debt has risen by more than $5 billion.

With every half-point rise in the interest rates, there is a $400 million to $500 million rise in the payment on the debt. At the current stage, this means that Miguel de la Madrid will complete his term with a debt, even using conservative figures, of around $105 billion.

With this hellish dynamic, the foreign debt, which began over two decades ago, has plunged the country into total financial dependence on the imperialist countries. From the capitalist point of view, the foreign debt represents a fundamental obstacle to economic development. Mexican capitalism is carrying an insufferable load which is destroying its economic foundations.

Secretary of Commerce and Industrial Development Hector Hernandez recognized last June 22 that the $13 billion surplus from the balance of trade in 1984 will have to be entirely dedicated to interest payments on the debt. At the same time, he noted that the level of imports from the United States had fallen by the sum of $18 billion in the last two years.

With these figures, a dramatic view of the country is laid bare. The debt is serviced with the foreign currency from exports, while the productive apparatus is condemned to stagnation for lack of foreign currency to pay for the key imports necessary for economic development.

This drastic situation is compounded by the effects of the immense decapitalization of the country. Thus, it is not enough that the income from exports has to be dedicated to paying the debt. On top of this, the flight of domestic capital represents a sum greater than the inflow of foreign capital through loans and new foreign investment.

It is not possible-even from the "pure" capitalist point of view-to justify this level of indebtedness. The texts on economic theory consider 20 percent of export earnings to be a reasonable rate for repayment of the foreign debt. Yet Mexico today has a rate that is climbing to more than 60 percent.

In practice, this situation means an intolerable waste of the resources of a country like Mexico, which needs as much of its resources as possible. The deformations produced by imperialism have led to a new reality of a small number of superbankers who, like emperors, demand tribute from the whole world. In effect, it is financial feudalism.

A blind alley The recovery from the 1981-83 recession has resulted in a predicament for the international credit apparatus. Capital is not led into productive channels, but rather is attracted by the high interest rates prevailing in the imperialist countries, especially the United States. This irrational policy-exemplified by President Reagan, the master of pretense-is planting financial time bombs on the world economic scene.

The Mexican government increasingly finds itself in a blind alley as it faithfully carries out the role assigned to it by the imperialist structures. The capital we will need for recovery is fleeing the country or has to be used to service SOCIALIST ACTION the debt. How can the economy get out of this quagmire? From where can more resources be scraped out? How long can the working population tolerate a degree of austerity that leaves it with nothing but scraps from the table?

The current government is becoming more and more a government whose principal mission is to safeguard the imperialist bankers. This function of debtor is completely detrimental to its other functions as a moderator of social conflicts, promoter of a domestic capitalist development, etc.

"Rationality" and discontent

The question of the foreign debt has erupted as a key problem facing the present regime. It will increasingly become a factor that will catalyze popular discontent. The question of the "rationality" of a system that allows its people to go without eating in order to pay increasing sums of money to insatiable bankers will lead to a higher mass consciousness.

The debt is not payable, including from a capitalist point of view, at least insofar as it condemns the Mexican economy to devastation and generalized decadence. Moreover, these statistics reveal that the country is being mortgaged not only economically, but politically as well. The workers' movement must therefore put forward a line that provides the political ammunition necessary to overcome the crisis through a revolutionary alternative.

A moratorium on the debt is only a step toward its nonrecognition. Imperialism has already been paid abundantly. The political ties which link the dependent semicolonial and colonial countries to imperialism are strengthened by the gold chains of the debt.

The bourgeoisies of Latin America and the so-called Third World as a whole find themselves faced with a terrible dilemma. They cannot fail to protest the heavy weight of the tribute upon their economies imposed by the imperialists. But, at the same time, they cannot break with them completely.

The masses will be on the frontline of this vital anti-imperialist struggle that seeks a moratorium, a breaking of the accords with the International Monetary Fund, and the refusal of imperialist-originated austerity. This is the first step in the path toward nonrecognition of the debt. The health of a nation like Mexico, in reality, will only be attained through the breaking of the ties that bind it like tentacles to imperialism. And here, the breaking of the chain of gold will be a key battle on the road to national liberation.

IF YOU POOR NATIONS WANT MORE LOANS, HERE'S WHAT WE WANT TO SEEAND AN END TO WHAT DOES SUBSIDIZED CON: IPTION ALL THAT MEAN:

SEPTEMBER 1984