The Mexican Peso Crisis: International Perspectives

Roett, director of the Latin America Program at the Nitze School, warns that during President Clinton's second term the United States will need to address "the efficacy of a strong and deeper relationship with Mexico when, in the minds of many U.S. citizens, it is the problem and not part of the solution for the economic prosperity of the U.S. in the 21st century." Rogelio Ramirez de la O places considerable blame for the scale of the peso crisis on the initial inability of the Zedillo administration to understand basic market dynamics and the impact of external perceptions of the strength or weakness of the peso. He also points out that although the stabilization and adjustment program of 1995 produced current account surpluses, it impoverished millions of Mexicans. Albert Fishlow has warm praise for the American assistance program, which he says prevented the "tequila effect," the spillover of the crisis into other Latin American emerging markets, from becoming uncontrollable. Wolf Grabendorff, director of the European Institute for European-Latin American Relations, sees the European Union giving integration priority over the American emphasis on "mere free trade and capital movements."