University Daily Kansan, October 21. 1982
Page 7
Speaker says Mexico rich, yet indebted
BY VERONICA JONGENELEN
Staff Reporter
The situation in Mexico is a paradox of oil wealth and economic crisis, Tom Sanders, Latin American specialist Stuart Staff and Staff International, said yesterday.
Sanders spoke to approximately 50 people at a weekly University Forum luncheon held in the Ecumenical Christian Ministries building.
Mexico's current problems began in 1976 with discoveries of oil and natural gas deposits, he said. Under President Porillo, a plan for oil production and the development was developed, and a goal was set for Mexico developed country by the year 2000.
BUT A WORLD-WIDE oil glut that occurred in 1981, when the country was ready to begin exporting on a large scale, made this goal impossible, he said.
Mexico now faces a national debt which will reach $82 billion this year, according to U.S. News and World Report.
"Suddenly, we emerge with a situation of Mexico as the most indebted country in the world."
Mexico's economic problems were aggravated by deficit spending and the overvaluation of the peso, he said. As of August, there are 80 pesos to one dollar
Sanders said that by 1980, Mexico was receiving income from foreign and domestic petroleum sales. Foreign companies began to set up joint-venture programs in Mexico with the American firms. This required a large amount of borrowing for the Mexican businesses, he said, causing deficit spending.
Inflation in 1981 was 31 percent, he said and the peso became overvalued.
PRICES WENT up in Mexico as a result, he said. However, the price of imported goods lowered and the domestic industry continued support of the overvalued peso.
Petroleum Mexicans, or PEMEX, wanted to lower its price per barrel, but this decision met resistance from the United States, which wanted to con-
tier conservation of world resources,
he said. The PEMEX price remained at
Countries buying Mexican oil then switched to cheaper sources, he said, reducing the income Mexico was receiving from its oil exports.
Along with this came Mexico's inability to export its other capital goods because the overvalued peso made prices too high, he said.
MEXICAN INCOME from tourism went down because of high prices, he said. and Mexican money began to sink because foreign prices were lower.
"The Mexicans are going over and buying out Houston and San Antonio because things are so inexpensive," he said.
Because Mexicans knew that the peace eventually would devalue, there was a run on the national reserves in an effort by Mexicans to buy American
dollars, he said. This crippled the economy even more.
If Mexico cannot pay its debt, the result will be disaster. Sanders said
He said that Mexico might try to muddle through by rescheduling its debts or raising the money it needs to get back on its feet.
The devaluation of the peso will help the economy through increased tourism.
"If you want a cheap vacation next summer, probably Mexico will be inexpensive."
THE RECENT nationalization of Mexican banks was a scapegoat measure taken by the government, Sanders said. He said that President Portillo decided to go down as the man who nationalized the banks rather than as one who led his country into this recent crisis.
Portillo's term is over on Dec. 1,
when he will be replaced by Miguel de
la Madrid.
O.R.E.A.D.
OUTDOOR RECREATION
EDUCATION ADVENTURE
DISCOVERY PROGRAM
--tonight at 23rd & Iowa 7:30 p.m. Outdoor Photography with Ken Highfill, Biology Instructor at Lawrence High. Free and open to the public. A "SPECIAL EVENT" provided by Recreation Services.
STUDENT SENATE ELECTIONS SENATOR'S FILING DEADLINE DATE-
OCTOBER 25, 5:00 PM
NO LATE APPLICATIONS WILL BE ACCEPTED
FILING FORMS AVAILABLE IN STUDENT
SENATE OFFICE,
ROOM B 105, KANSAS UNION
(FunDED by the Student Activity Fee)
---
TODAY IS YOUR LAST CHANCE!
Sponsored by Interfraternity Council and Panhellenic
GIVE BLOOD . . . SAVE A LIFE!
9:30-3:30 Ballroom, Main Union
BIG BLUE RALLY
THURS. OCT. 21 / 7:00 - 12:00
FREE BEER AND HORIZON BAND TO ALL CLASS CARD HOLDERS
-CARDS ON SALE AT DOOR-
SATELLITE UNION PARKING
KU BAND,FOOTBALL TEAM, FAMBROUGH,SPIRIT SQUAD WILL ALL BE PRESENT
-SPONSORED BY BOCO-
LAWRENCE TOYOTA/MAZDA
LAWRENCETOYOTA/MAZDA
LAWRENCE TOYOTA/MAZDA
LAWRENC TOYOTA/MAZDA LAWR
COOLING
We'll
- inspect belts and
- flush radiator
- install new anti-freeze (up to 1 gallon)
- pressure test cooling system and test radiator cap
All Japanese Imports
MAZDA
TOYOTA LAWRENCE
LAWRENCE AUTO PLAZA
842 7191
Coupons must be presented at time of write-up
$24.95
Includes parts and labor (Additional parts and labor extra)
TUNE-UP SPECIAL
$29.95
Electronic Ignition
Electronic ignition (included all parts and labor-6 cyl) models slightly higher.) Mell.
- install new spark plugs
* set engine to recommended manufacturer's specifications
* inspect operation of choke
* install new fuel filterMazda and Toyota only
- rotary engines not included
TOYOTA
LAWRENCE
MAZDA
LAWRENCE AUTO PLAZA
842 2191
LAWRENCE AUTO PLAZA
842 1291
Coupons must be presented
at time of write-up
Standard ignition
(included all parts and labor-6-cyl
models slightly higher)
Well
* install new spark plugs
* replace points and cond
parts where recommended
manufacturer specifications
* adjust carburetor
* inspect operation of choke
* install new fuel litter/Mazdas
and Toyotas only
* rotary engines not included
DA LAWRENCE TOYOTA/MAZDA LAWRENCE TOYOTA/MAZDA LAWRENCE TOYOTA/MAZDA
LAWRENCE TOYOTA/MAZDA