Bad news, good news: Colosio's untimely death could mean the rebirth of reform - presidential candidate Luis Colosio - Mexico Manana: After Chiapas and Colosio

Reason, July, 1994 by Julio Marquez

Like Salinas, Zedillo has a reputation as an exceptionally bright free-marketer. He is intensely disliked by leftists, old-style politicians, and entrenched bureaucrats, many of whose power and positions were reduced or eliminated in the Salinas-Zedillo budgets.

After the budget wars, Salinas appointed Zedillo secretary of education, probably in an attempt to give his protege political stature. Had Zedillo performed without incident, Salinas might well have chosen him over Colosio. But Zedillo soon became mired in controversy.

PRI traditionalists objected to changes he proposed in the national elementary-school history textbooks. In the revised books, relations with the United States were depicted more favorably, as was the presidency of Porfirio Diaz, the dictator who preceded the Mexican Revolution; certain events supported by the left, such as the student revolt of 1968, were deemphasized or eliminated. Zedillo also incurred the wrath of the national teachers' union--a politically powerful organization traditionally aligned with the bureaucracy--by effectively decentralizing control of the school system.

Not surprisingly, then, Zedillo couldn't win the presidential nomination. He was, however, named Colosio's campaign manager, assuring him of a prominent post in the Colosio administration. And although he was criticized for running a lackluster effort on behalf of Colosio, he is now almost certain to win the August election.

His opposition has all but collapsed. Camacho lost popularity following the assassination, and he blew his chance for the PRI nomination by refusing to support Colosio. He can no longer capitalize effectively on his Chiapas negotiations, since the situation has proven difficult to resolve as it became clear that the rebels were not primarily looking for handouts but free elections and a voice in local government.

On the left, Cardenas will once again be the standard-bearer, and he may lead his party to important victories in local, state, and congressional elections. But he hasn't articulated a consistent platform. And he was unable to capitalize on his credible run for the presidency in 1988, virtually disappearing from public view during the Salinas term. He emerged only twice: once to oppose NAFTA and later to tepidly endorse it.

The opposition from the right, which in 1988 featured the charismatic industrialist Manuel Clouthier, is now divided following his accidental death--under mysterious circumstances--three years ago. In any case, the business community appears to be solidly behind Zedillo. His principal campaign theme has been "Continuity," and he supports tax and regulatory relief for small and mid-size firms.

Zedillo faces a tough challenge. Political uncertainty, incomplete liberalization, and the threat of renewed deficit spending have made Mexican markets edgy. Interest rates have risen, stocks are down, and a currency devaluation is a strong possibility, given continued inflation above the U.S. rate.

The situation has been helped, however, by Salinas's making the Mexican central bank independent, which has given the markets more confidence in Mexico's macroeconomic stability. The bank, which became autonomous on April 1, continues to be headed by the internationally respected Miguel Mancera, a staunch fiscal conservative and Yale-educated economist who has led the institution for the past 11 years. Zedillo once worked under Mancera and has since been considered his protege.