Kathleen’s got the goods on Zedillo
and she’s blogging about it:
You have to admit that I might be allowed a wee bit of incredulity when it comes to anything Zedillo says. If the name Ernesto Zedillo isn’t ringing a bell, well, let me inform you: he was the last PRI (The Institutional Revolutionary Party—an oxymoron if there ever was one) President of Mexico. The guy that Vincente Fox replaced. He was also the guy who lost control of the government for the PRI, which is why he’s hanging out in New Haven now, as the Director for the Yale Center For the Study of Globalization, and not in Mexico City. I can’t think that Mexico is a good place for him to be right about now. Good thing Yale coughed up a job, eh?
I don’t know much about Zedillo’s background, or about his character, for that matter, but yesterday I posted about his Forbes article on reforming Latin American economies. Since Zedillo exhorted countries to invest more in human and physical infrastructure, guaranteeing the rule of law, and the removal of internal and external barriers to competition, I’m all for the proposal.
Sadly, Latin American economies are also saddled with a nationalism that prevents them from seeing beyond their borders. One could argue whether to include that in the barriers to competition, but it exists. For example, about a year ago I attended a lecture at the University on a proposed dam/power plant in Bolivia. Aside from the usual logistics, environmental, and human costs (moving people from their farms, etc) problems, which have put the kibosh on many such projects, one of the larger issues — you could say, an overriding issue — was that the work had to be done by Bolivians, and the investors (aside from the Bolivian government) had to be exclusively Bolivian. Considering how few companies around the world have the knowledge and resources to carry such a large-scale hydroelectric power project to completion, I was surprised about the first constraint, and amazed by the second. Bolivia is not a rich country, and power plants’ costs reach into the billions of dollars. I raised my hand and asked if a public stock offering had been considered, and was met with silence. I explained that, for instance, the Chinese Three Gorges Dam project had attracted a lot of investors, not only Chinese, and that here in the USA in the 1970s I had invested in Texas Utilities, which paid a nice dividend and was a win-win situation: the utility was able to finance the project, the Texans got their power, and the investors got a nice return on their initial investment (I sold at a profit after a few years — I haven’t followed the company since). I also remarked that no time in the trasactions had anyone inquired as to my nationality. In all, I was told that, to the Bolivians, that sort of thing was out of the question.
Last I heard, no power plant in Bolivia.
But back to Zedillo. Kathleen asks, “Why Forbes gives this guy column inches, I haven’t the foggiest idea.” I don’t either, but here’s a guy I propose: Hernando de Soto.
Hi there. Just a few comments. Zedillo might have been the last president of the PRI, but he took active steps to ensure the independence of the IFE (Federal Elections Institute), the institution responsible for carrying out democratic processes. It is because of this that the 2000 elections could not be rigged. He also advanced measures which made possible to achieve the independence of the Bank of Mexico (the institution which practically outlines economic policy in Mexico) from the presidency. This move had the effect of making it impossible for the president of Mexico to appoint or remove from office the president of the Bank of Mexico, which insures that the BoM has a free hand in determining a great deal of the federal economic policy on judgement of economic arguments alone. Mexico has not had a crisis since these policies were implemented, that’s 12 years more or less of low inflation, economic stability, etc. all of which, arguably, could be said to be the effect of these and other of Zedillo´s enactments. When Zedillo began the presidency the country was about to go into a deep recession caused, according to most experts, by inept handling of the economy during the Salinas administration. Zedillo was able to maneuver through that crisis, in great measure, thanks to the help of the Clinton administration which lent billions to the ailing mexican economy, but mostly also because of his excellent training at economy. However, within one year that debt was paid off and henceforth the economy in Mexico grew at a pace of seven per cent anually, more or less. It is true that Zedillo’s government was not free from corruption or illegality, but it is all but impossible to reverse the inertia of a country which, since the colony, has been plagued by such problems. Zedillo did his best to try to enact reforms and rule lawfully, trying to modify the country as much as possible given the various constraints of political reality. He can hardly be blamed for all that went on before him. It is like blaming the next american president, be it Barack or McCain, for all of the US policy mistakes of the past administrations. Like shrugging off all republicans because of the watergate scandal and the dubious electoral process of 2000. I dare say you commit the fallacy of ad hominem, that is, shrugging off Zedillo’s views on account of the fact that he was a member of a discredited political party. Clearly someone can give a good argument towards implementing a policy even if you dislike him/her. If Stalin had ever said that peace was good, that would not have been false only because he said it, right? But, in any case, Zedillo is no Stalin. On a biographical note, he was a poor and studious young man who earned a B.S. in economics at a public university, and who earned a scholarship to Yale, where he earned a masters and a P.hD in economics. That’s not easy for someone with any background, much less for an under-resourced young mexican. I would say that it is well and good that Forbes gives a damn for Zedillo’s thoughts. I think there are sound reasons for listening to his arguments, even if one can disagree with him. Best Regards,
Moises M. , Mexico City.