- The Washington Times - Wednesday, July 5, 2000

MEXICO CITY The stock market is up, the peso is stronger and there is little talk of the post-election economic curse that plagued Mexico after the past four presidential votes.

Electing the first opposition candidate to Mexico's presidency in a century seems to agree with the country financially at least for now.

Vicente Fox's victory Sunday ended 71 years of rule by the Institutional Revolutionary Party. Deutsche Bank responded by naming Mexico the top pick in its Latin American portfolio, saying "as democracy is strengthened in Mexico, the economy will become a major focus of attention for investors."

In the months leading up to the vote, however, many Mexicans worried that the economy would collapse after the election as it has after the past four presidential votes all of which were followed by crises that sent inflation, interest rates and unemployment soaring.

But in a recent interview, Mr. Fox repeated promises for a smooth, crisis-free transition.

"Under no circumstances do we want to fall into a deep hole, into a vacuum as we did in December 1994," the last crisis, Mr. Fox said. "That is not going to happen this time because we are going to have a lot of communication with everyone with investors, with markets."

Mr. Fox said Mexico, the United States and Canada should move beyond their free-trade bloc, known as NAFTA for North American Free Trade Agreement, and into a common market agreement where Mexicans, Americans and Canadians can work beyond their countries' borders an idea unlikely to be accepted in the United States.

"This will eliminate migration," said Mr. Fox, a former Coca-Cola executive who has touted free trade and a cleaner, more efficient government. "It will eliminate the gap between salaries in one country and another, and this will make us very, very fruitful, winning partners."

Mexico's stock market responded favorably to Mr. Fox's victory, closing 6.1 percent higher its highest close since April 3. The peso strengthened to 9.57 against the dollar, its strongest level since June 2.

Investor optimism continued yesterday. The market was up another 1.6 percent at midday, and the peso had strengthened further to 9.51 to the dollar.

The question is whether that optimism can be sustained, said Sidney Weintraub, an expert on political economy for the Center for Strategic & International Studies, a Washington-based think tank.

"That's short term," he said. "And I think people are going to watch how the transition goes."

Although most analysts agree the economy is strong and there is little chance of another post-election crisis, many in Mexico are still wary.

"For most Mexicans, this has happened every six years or so, and it's built into their psyche that something will happen," he said. "They aren't going to change their mind until Fox is in office and things are going well."

Still shocked by Mr. Fox's win, many Mexicans seemed to embrace the idea of change within their country. In Texas, some immigrants said they might even return home if Mr. Fox can improve the economy.

"If things got better, I would maybe go back to Mexico," said Maria de Jesus Osoria, who moved to the United States a year ago. "I think [Fox] will make the changes. He has to be the catalyst for change."

Others weren't convinced that a new party in power would mean a stronger economy.

Arturo de la Torre, 27, who was having his shoes shined while reading about Mr. Fox's win, said he voted for Mr. Fox and hoped that the newly elected president can create jobs and develop Mexico's resources. But he also said Mr. Fox's success would depend on how his government is accepted in Mexico, where the ruling party has ruled for decades with limited opposition.

"We don't know if it's going to work or not," Mr. de la Torre said.

After delivering a newly shined pair of shoes to a waiting luxury car and returning to Mr. de la Torre, Felix Sanchez Moreno, 28, agreed, saying Mexicans were accustomed to economic crises and wouldn't be surprised by another. Still, he was hopeful things would improve under Mr. Fox.

"The change is very good," he said. "This is what the country needs."

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