Mexican Revolution Contrast To Cuba’s

Press, Volume XCIX, Issue 29384, 10 December 1960, Page 7

Mexican Revolution Contrast To Cuba’s

IBy

BERTRAM B. JOHANSSON,

, Latin-American Correspondent of

the "Christian Science Monitor]

MEXICO CITY. In the context of Caribbean economic turmoil today. President Lopez Mateo’s recent announcement of intent to nationalise Mexico’s electric power industry is being noted here as a symbol of Mexico’s middle-of-the-road, yet still revolutionary, position on the Latin-American scene President Lopez Mateos made the announcement, not after confiscating foreign power companies. but. significantly, after his Government had bought up two of the largest electric generating companies in his country. The Mexican position contrasts sharply with that of Cuba, where Dr. Fidel Castro’s Government is pre-empting most property without any visible sign of financial compensation, involving nearly 1000 million dolars worth of United States-citizen owned property. “Mystery” Unveiled First the Mexican Government bought out American and Foreign Power Company plants for 104, million dollars—much of which has to be reinvested in Mexico. Then President Lopez Mateos disclosed that his Government was the “international mystery figure” which all summer long has been buying up shares of Mexican Light and Power Company through “straws” and international financial dickerings which have held the financial community fascinated for months. For Mexico, the year 1960 has meant a year of many anniverseries: the 150th of its independence from Spain, the 100th of the reform of its constitution, the 50th of its 1910 revolution and beginning of land reform. The year 1938 is hailed by historians as the year of Mexican ■petroleum reform, when United States and British interests were expropriated. Now 1960 is to be known as the year of nationalisation of electricity. Clearly, there is an effort of the Mexican Government to impress its people—and overzealous Cuba as well—with its work in nationalising the country’s basic industries. Dual Position Huge, multicoloured electric signs have been mounted on the fronts of Mexico City buildings and throughout the countryside

placards and banners hail the 1960 nationalisation of electricity. But while it is all being done with an eye to giving revolutionary fervour momentum, there is emphasis on providing private investment, both domestic and foreign, with a welcome.

Mexico’s economic policy position could be described as one of desiring to nationalise basic industries—railroads, petroleum, tourism, electric power—while courting private investment for diversified industries. It is a fundamental of the Mexican Revolution, which observers here consider very much alive, that the basics of the Mexican economy should be owned or controlled by Mexicans, whether by the Government or private Mexican citizens. Initiative Taken Actually, the Federal Electric Commission was already producing some 55 to 60 per cent of the country’s electric power, though it was distributing much of it through private firms. In tlie American and Foreign Power Company deal, the company recognised, as it has for years, that since the Government would not permit it to raise its rates to meet increasing costs, it would inevitably lose money and could not conscionably expand its power system. The company therefore took the initiative to sell, made an offer of 107, million dollars. The Government agreed to 104, million dollars with the stipulation that most of the purchase funds would have to be reinvested. Financial observers here opine that American and Foreign Powers will make three times as much money reinvesting in other Mexican ventures, where there are not the restrictions there were in the electrical industry. Sugar Bonanza As for other factors in Mexico’s ecnomic picture: Sugar producers, who originally had a quota of 66,000 tons they could sell to United States buyers, have benefltted enormously by the cut in the Cuban sugar quota—enunciated by President Eisenhower. Mexico’s share of the new quota (to make up for sugar Cuba cannot sell the United States) was roughly 400,000 tons. Mexico has lots of sugar available, and is looking forward to an expanded quota next year. Mexico is looking for more private 'investment, though with certain controls by Goverment. Total private investment in Mexico amounts to 1500, million dollars of which 1000, million dollars is from United States investors. Private foreign investment in Mexico does not represent as much as 10 per cent, of total investment, even though the advertising signs around Mexico City would indicate there was a great deal more. Tourism Mexico is keeping a sharp eye on maintaining its doors open for tourists, from whom it nets a million dollars a day. This is one reason, obviously, why Mexico is interested in providing a welcome for private capital. Cuba’s loss of tourism as an industry has deeply impressed Mexico. The gross national product in Mexico is increasing at the rate of 7 per cent, as compared with 4.6 or 4.7 in 1958 and 1959, according to the Presidents’s annual message in late August Last year’s rate of 4.7 per cent was enough to keep ahead of Mexico’s demographic or population Increase. The population of Mexico has increased 34 per cent, in the last 10 years. Its anual rate of population growth is nearly 3.5 per cent., believed greater than any country in the world. Mexico’s credit situation is exceedingly healthy. Last year, the Export-Import Bank announced it would make 100,million dollars available to Mexico. Some 190, million dollars of drawing rights have been made available to Mexico by the International Bank.