Carlos Salinas

Carlos Salinas de Gortari (born 3 April 1948) was President of Mexico from 1988 to 1994.

The December Mistake

A key event in recent Mexican history, "The December Mistake" (Spanish: "El error de Diciembre") refers to incoming President Zedillo's decision to liberate the peso which led to an immediate devaluation of 50%. While it took place under Zedillo, and much of the disastrous impact can be traced back to that administration's cronyism and mismanagement of the devaluation, the blame for the underlying causes is usually placed with the outgoing Salinas administration.

Related Topics:
December Mistake - Spanish - Peso - Devaluation

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

While experts agree that a devaluation was necessary, they also tend to concur that the way the government handled it was politically inept: A few days after a private meeting with major Mexican entrepreneurs in which his administration asked them for their opinion of a planned devaluation, Zedillo suddenly announced his government would let the peso exchange rate float freely against the US dollar, by stopping government measures to keep it at a fixed level (by selling dollars, assuming debt, and so on). That resulted in the peso crashing from three pesos to the dollar to six to the dollar in the space of a week (although in the interim dollars were selling for up to 8 pesos in some regions).

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Mexican businesses with debts to be paid in dollars, or that relied on supplies bought from the USA, suffered an inmediate hit, with mass industrial lay-offs and several suicides. Businesses whose executives attended the meeting at Zedillo's office were spared the nightmare — forewarned, they quickly bought dollars and renegotiated their contracts into pesos. To make matters worse, the devaluation announcement was made mid-week, on a Wednesday, and for the remainder of the week foreign investors fled the Mexican market without any government action to prevent or discourage it until following Monday when it was too late.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The December Mistake caused so much outrage that for a long time, Salinas did not dare return to Mexico (he was campaigning worldwide for WTO head at the time). The incident also served to make it clear that his influence (if any) on the Zedillo administration was over.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Salinas was blamed for supposedly ignoring the economics problems of his administration, and, his prestige lost, he exiled himself to Dublin, Ireland, where he eventually married again. Although he is free to return to Mexico and does so from time to time, he always stirs controversy. His brother Raúl went to jail accused of masterminding a political assassination of Jose Francisco Ruiz Massieu, a member of their own party and of committing fraud while working for the government during Carlos's presidency.

Related Topics:
Dublin - Ireland - Raúl - Jose Francisco Ruiz Massieu

~ ~ ~ ~ ~ ~ ~ ~ ~ ~