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    On December 1, Luis Echeverria Alvarez will take office as Mexico's new president. His six-year?

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    On December 1, Luis Echeverria Alvarez will take office as Mexico's new president. His six-year term of office could be the most crucial period in Mexico's history since 1910 socialist revolution. From the presidential palace in Mexico City's Zocal Square, the 48-year old former Minister of the Interior will have to resolve the emerging conflict between Mexico's "two nations" -- an urban-based population developing confidently, and the poor peasants and shanty-town dwellers.

    The Institutional Revolutionary Party (PRI) has governed Mexico for the past forty years. The Constitution provides for a party system but the PRI is the only party of any significance, although there are several very minor opposition parties. The stability of the PRI can perhaps be traced in part to the support of a section of society almost unique in Latin America -- the middle class. With the steady rise in the standard of living in the cities, blocks of medium-rent flats have started to emerge to bridge the ever-widening gap between the houses of the wealthy an the nearby shacks of the shanty towns. Medium price cars are in demand, new American supermarkets are opening an the standard comforts of western European home life are now part of the pattern of Mexican middle class society.

    But the middle class exists only on the fringe of the large industrial towns. Once in the countryside, the gap between rich and poor becomes the spectre that haunts most Latin America countries. The peasants leave the land and crowd into the dingy shanty towns hugging the sources of wealth in the cities.

    Mexico acts as a buffer state between its powerful neighbour, the United States, and the rest of Latin America, struggling to produce a national identity free of either influence. But the United States has a major share of Mexico's economy. More than 1,000 U.S. companies operate in Mexico dominating the consumer goods market--food processing, cars, refrigerators, cosmetics -- and its advertising.

    The oil and petroleum industry -- both nationalised by the government -- have proved a major economic asset with recent drilling strikes revealing a potential source running into millions of dollars.

    The Mexican Government allows foreign companies to own only 49 per cent of any industry or business in Mexico, the remainder must be in Mexican hands. Production grows by six percent a year, but half of Mexico's 50 million population doesn't share in this new industrial affluence, it lives at subsistence level. In spite of only one tenth of the land being fit for agriculture, Mexico produces enough for the domestic market and manages to export some. But despite repeated distribution of land there are still more landless peasants than in 1910. This remains a source of discontent and the major motivating force in the drive by the peasants to the shanty-towns in search of work as unskilled labour.

    Whilst poverty and the correction of social conditions must be the major problem for the new President, he knows that he can attempt to find a solution from the base of a stable government. This stability rests on the unique relationship the government has with the Church and the armed forces. All the Church property is owned by the government and leased to them at a nominal rent, and priests and nuns are not allowed to wear their clerical clothes outside of the church buildings -- a move which had helped in the declined influence of the Church.

    Mexico has long realised that an Army can be a considerable and unproductive drain on national resources as well as a potential threat to the political system. As a result, only eight per cent of the national budget is spent on defence, and the Army is put to use as the spearhead of social reforms among the peasants. The Army spends a lot of time in the fields and villages teaching the peasants the latest developments in hygiene, modern agricultural methods, and village administration, as well as helping out with building, medical care and haircuts. The result is a working relationship between the soldier and civilian.

    Mexico has made inroads towards social reform with a national health service. Parents of each new-born child are given clothes for it when it leaves the hospital.

    In the last ten years, by a subtle combination of socialist rule and capital investment, Mexico has moved to the forefront of Latin America. It is the task of President Echeverria, in his six-year term of office, to see that the benefits of this development are felt in all sections of Mexican society.

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