MEXICO IS now in the process of deciding whether to let IBM set up a wholly-owned subsidiary there to build its personal computers. For years Mexico has allowed foreign companies into the country only in minority partnerships with Mexicans. The IBM proposal affronts some of the Mexican nationalists and raises fears of losing control of the economy to foreigners. There's an important choice here for Mexico.

As the Latin countries struggle to carry their foreign debts, investment from abroad offers them crucial help. Servicing the debts with export earnings alone, although possible, is harshly strenuous. But each dollar of investment coming into the country is one dollar less that has to be sweated out of exports. Mexico has made a strong beginning in adjusting to the debts, but whether it is able to manage them successfully over the long haul may well depend on the volumes of investment that it can attract.

The major source of this investment ought to be the money owned by Mexicans themselves, hastily transferred abroad for safety during the financial crises of the past two years. To the extent that Mexico can induce this capital to return home, the present policies of austerity will be abated and the return to normal economic growth will be speeded. A substantial part of the country's present foreign debt, after all, financed the flight of that capital. But another important source of investment, having the same beneficial effects, can come from foreign companies wanting to expand their manufacturing operations -- like IBM.

If Mexico now relaxes its rules on local control, that will raise a question of equity to other foreign companies -- including some of IBM's competitors -- who have already come in with the required Mexican partners. If approval of the IBM venture turned out to be an isolated concession to one favored company, that would be a genuine injustice to the others. But if it were to signal a fundamental turn in policy, allowing other investors to come in on the same terms, few companies would have grounds for complaint.

For some Mexicans, investment from abroad is a threat to the country's control of its future. Are they right? The answer is that economic nationalism played a substantial part in creating the debt crisis. In the 1970s, nationalist legislation actively discouraged foreign investment, and countries like Mexico turned increasingly to bank loans instead. That worked nicely as long as interest was low and worldwide economic growth was high. But when interest rose and growth rates fell, the massive bank debts burdened the Latin countries as no multinational corporation could have done. An invitation now to wider investment can contribute not only to Latin America's prosperity but to its economic freedom as well.