MEXICO CITY — President Vicente Foxs enthusiasm over the new U.S. immigration proposal does little to mask doubts about his chances to uplift Mexicos sagging economy and give his countrymen a good reason to stay home instead.
With millions of Mexican citizens working illegally in the United States, Mr. Fox has pressured the White House for an accord since he took office in late 2000. His endorsement of President Bushs plan in Monterrey this week is seen as a major political victory.
“For us, in Mexico, this is a very important step forward,” Mr. Fox said Monday. “It has to do with the relationship between the two countries, and it has to do with the migration flow.”
But in the three years since his election, and despite the promise of the 10-year-old North American Free Trade Agreement, Mr. Fox has seen Mexicos economy slip into a slow tailspin, with economic indicators painting a gloomy picture for a nation where hundreds of thousands a year still feel compelled to risk their lives to illegally work in the United States.
Mr. Bush said in Monterrey that illegal immigration can be halted by expanding “economic opportunity in countries at both ends of an immigrants journey.”
But for the third consecutive year, Mexicos gross domestic product has flagged, falling to a 1.2 percent rate of annual growth below forecasts and far short of Mr. Foxs election promise of 7 percent annual growth.
Unemployment has also shown an unexpected increase of late, despite Mr. Foxs pledge to create a million jobs while in office. For the first time, China passed Mexico as the top exporter to the United States.
Perhaps most seriously, political squabbling in Mexico City has blocked nearly all the ambitious economic reforms pledged by Mr. Fox, ranging from the nations petroleum industry to its electricity monopoly to its tax system.
For the moment, Mexicos brightest economic hope seems to be that the peso has been one of the few currencies to be losing ground against a weakening dollar.
Three years to the day after Mr. Fox took office, it cost 11.4 pesos to purchase one U.S. dollar 20 percent more than it cost in December 2000. That has fueled hopes for increased exports, particularly to Europe where the value of the dollar has dropped.
It is increasingly clear, however, that Mexicos top export continues to be flesh and bones. During the Fox administration, money sent home by Mexicans working in the United States called remittances has skyrocketed.
Remittances through the first 11 months of 2003 totaled $12.06 billion, nearly twice the $6.6 billion recorded in 2000.
That ranks second as a source of revenue only to overseas sales by the state-owned oil monopoly Pemex. Remittances are expected to rank ahead of oil sales next year, making the economy dangerously dependent on workers in the United States.
Pemex, the single largest source of tax income for Mexico, has serious infrastructure problems limiting growth, but Mr. Fox has been unable to persuade the congress to open it to private investment something he has promised since taking office.
In the latest blow to the hope he brought Mexico by ending the 71-year rule of the Institutional Revolutionary Party (PRI), the PRI has used its control of congress over the past two months to trample his plan to overhaul an inefficient tax system.
Still, a sanguine Mr. Fox told his nation via radio Saturday that the economic picture for 2004 was “more positive and optimistic” than in any of the three previous years.
He pointed to a 4 percent inflation rate, the lowest in more than three decades, and a record $57.4 billion in U.S. dollar reserves. Earlier this month, the finance ministry predicted GDP growth of 3.1 percent for 2004, heavy by recent standards.
There are other tentative signs of life in the Mexican economy.
Industrial production and manufacturing exports have sparked to life, showing growth in recent months. Banks have, for the first time in memory, begun offering mortgages and other loans to Mexicans at affordable rates. And foreign lenders have shown increased willingness to extend credit to Mexico.
Meanwhile, Mr. Fox has backed a planned free-trade agreement incorporating the entire hemisphere, improving relations with the White House after a two-year chill.
But the president still has to contend with politicians in his own country, many of whom dislike NAFTA and have criticized the proposed immigration accord.
“The migratory theme must go much further,” said Adriana Gonzalez, head of the Congressional Committee on Foreign Relations, and a member of Mr. Foxs own party.
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