Miguel de la Madrid Hurtado

views updated Jun 08 2018

Miguel de la Madrid Hurtado

Miguel de la Madrid Hurtado (born 1934) was elected president of Mexico in 1982 and served until 1988 at a time when the country was facing its most severe economic crisis in history. His substantial efforts to cope with the crisis won him more respect abroad than at home.

Miguel de la Madrid Hurtado was born in the western Mexican state of Colima on December 12, 1934. The family roots in that state dated back to the 18th century. His father, Miguel de la Madrid Castro, placed a high premium on formal education for his children and sent young Miguel to Mexico City for his primary, secondary, and university schooling. Miguel de la Madrid completed his law studies at the National Autonomous University of Mexico in 1957 and was awarded his degree with distinction after defending a thesis entitled "The Economic Thought of the 1857 Constitution."

De la Madrid's professional interests lay in the field of economics, and shortly after graduation he secured employment in the Bank of Mexico. As he rose in the organization his responsibilities began to outstrip his formal training. He made the decision to move temporarily to the United States for additional graduate training. He studied at Harvard University from 1964 to 1965 and also earned a Masters degree in public administration while there.

Served in Treasury

Economic administration in the public sector would demand his energies for the next 15 years. From 1965 to 1970 he served as subdirector of the Credit Section of the Secretariat of the Treasury and then as subdirector of Finances for Petróleos Mexicanos, the state owned oil industry. In 1972 he moved back to the Treasury Ministry, this time as director general of credit. The record he established in public administration was an enviable one, and by 1979 President José López Portillo believed that Miguel de la Madrid, then only 45 years old, should be brought into the cabinet. He named him secretary of planning and programming, a position in which he served until he won the presidential nomination of the Partido Revolucionario Institucional in 1981. He won the Mexican presidency the following year.

Inherited Economic Crisis

Miguel de la Madrid's rise to his country's highest political office was meteoric to be sure, but in spite of his relative youth he was perhaps better prepared for the tasks that lay ahead than any of his 20th-century predecessors. As he began his six-year term he inherited a country beset by economic problems so serious they threatened to disrupt the social order. The country was in its worst recession since the Great Depression of 1930. The inflation rate topped 100 percent in 1982 and approached that record again the following year. Increases in the costs of gasoline, corn, wheat, and electricity led the assault on the consumer price index. Negative publicity concerning the murder of a U.S. drug enforcement agent, the disappearance of several U.S. citizens in Guadalajara, and some political violence during the mid-term elections of 1985 discouraged U.S. tourism, further hampering the badly needed influx of U.S. dollars. The president's repeated assurances that tourists were safe in Mexico were true, but they proved unproductive.

Mexico's foreign debt under Miguel de la Madrid topped $90 billion, one of the highest debt loads in the world. During previous administrations, especially under López Portillo, Mexico had borrowed heavily to finance its modernization effort and had predicated its ability to repay the substantial loans on its petroleum wealth. But the world oil glut and the subsequent drop in the price for crude oil left the country without its leading source of foreign exchange earnings. Unemployment and underemployment demoralized the work force and pushed tens of thousands of Mexicans across the northern border into the United States in search of jobs. The peso began to slip against the dollar and then began its plunge in the free market. During the summer of 1985 it fell from 260 to 380 to the dollar along the U.S.-Mexico border.

President de la Madrid was forced to adopt stringent and unpopular austerity measures to restore some semblance of economic order and to rekindle some degree of confidence in the world's banking community and financial markets. Recognizing that government expenditures had to be drastically reduced, de la Madrid announced reductions in federal subsidies, the sale of inefficient and unprofitable state-owned enterprises, and a freeze on federal employment. Using the influence of the presidency he did his best to limit the size of wage increases in the labor force, and he also attempted to reduce the import of nonessential consumer goods. Finally, in a bold move, the president eliminated 51,000 federal jobs and cut back the salaries of many federal employees whose positions simply could not be eliminated.

Refinanced Foreign Debt

President de la Madrid's austerity measures helped in some areas but not in others. Because the international banking community approved of his efforts, Mexico was able to refinance its huge foreign debt. Creditors agreed to give the country additional time to rebuild its economy. The 1984 inflation rate was held to 60 percent, a slight improvement, but in that same year Mexico's gross national product recorded its third consecutive decline as the country's population growth greatly outstripped a modest rate of economic growth.

De la Madrid was a strong and dynamic political figure, better thought of abroad than at home. The president sought improved relations with the United States, particularly with regard to trade, and was less critical than his predecessors of U.S. policies regarding Central America. However, particularly after a U.S. Drug Enforcement Agency employee was murdered in 1985, the issue of drug trafficking from Mexico to the United States remained a sore point.

De la Madrid was succeeded by Carlos Salinas de Gortari in 1988 after serving one six-year term. On his way out of office in 1988, de la Madrid sought a $3.5 billion loan to Mexico from the United States, ignoring a popular sentiment favoring a debt moratorium. He also announced plans to sell or liquidate up to 50 state-run companies. "De la Madrid is doing the dirty work now to make life easier for Salinas," said an official in Mexico's Energy, Mines & Federal Industry Secretariat.

In 1990, de la Madrid became director general of Fondo de Cultura Econóomica. While in the mid-1990s, it had become popular with some of Mexico's living ex-presidents to break with the tradition called La Mordaza (the Muzzle) and criticize sitting President Ernesto Zedillo, de la Madrid refused to do the same.