Finance Minister Jesus Silva Herzog, defending his foreign debt management against unusually caustic attacks in the Mexican congress today, said the loans should be repaid but creditor banks and governments must "lighten the debt burden" for Mexico and other big Third World borrowers.
"Something has to give," Silva Herzog said. "The debtor nations are paying dearly for a problem for which responsibility clearly must be shared."
In a marathon question-and-answer session in the lower house of Mexico's legislature, Silva Herzog asserted that there is no practical alternative to the government's policy of servicing fully and punctually the $70 billion debt owed by the government and government enterprises, the largest such debt in the developing world.
Mexico's "willingness to fulfill its debt obligations isn't simply because we consider it a debt of honor, nor is it due to submission to foreign interests," he said. "A country like ours couldn't withstand the drastic interruption of financial, commercial and political relations with the outside world that would result from a unilateral suspension" of debt payments, he argued.
Silva Herzog's appearance today marked his first full-dress confrontation with Mexico's new congress, elected last July 7 to a three-year term. Though dominated three-to-one by the government's Institutional Revolutionary Party, the Congress includes in its ranks for the first time most of the nationally prominent leaders of the splintered Mexican left, which recently closed ranks behind a demand for a halt to foreign debt servicing.
In an openly confrontational stance rare in Mexican politics, many of these leaders today ascended the congressional podium to blast the government's foreign debt strategy while the finance minister sat in an adjacent chair, calmly taking notes.
Responding to a representative, who charged that the government "cares little or not at all about the costs of its policies to the poor," Silva Herzog said a debt payment moratorium would hurt most the economically weakest. "Confrontation and isolation aren't the best way to protect the welfare of the masses," he said.
But in a demand for better repayment terms that analysts saw as a sign that the opposition is pushing the government toward a more aggressive position on Third World debt reform, Silva Herzog said foreign loan obligations "cannot and have never taken precedence over the needs of the people. It isn't valid to think even for a moment that these needs might be sacrificed in the attempt to satisfy foreign creditors exclusively," he said. "The first and only responsibility of democractic governments is to their own communities."
Government concern that disenchantment with its debt policies is growing even within ruling party circles was reinforced today as Silva Herzog received little vocal support from the powerful pro-government labor bloc that holds 99 of the lower chamber's 400 seats.
The government's 1986 program of continued full debt servicing and stricter I.M.F.-supervised spending constraints simply guarantees "more austerity, less investment, and more hunger for working people," said Heberto Castillo, the personally popular leader of the small leftist-nationalist Mexican Workers Party, echoing complaints put forward privately by many government-allied political and labor activists.