Chiapas - make the banks pay

By Craig Benjamin. 16 February, 1995.

I am forwarding the following message posting earlier today to the Chiapas mailing list and discussing responses to the Chase bank's role in the Mexican government's latest assault on the indigenous peoples' liberation movement known as the Zapatistas.

I've also appended four other articles dealing with Chase's complicity in this latest genocidal assault.

I'm posting this material here because of its potential relevance to indigenous sovereignty movements north of the US-Mexico border and because of the earlier interest in Chiapas shown at this site.

Although Chase has attempted to distance itself from the report, describing the author as an "independent scholar." this bit of spin-doctoring is pretty much meaningless given that the report's author was on leave from his university to work for Chase when he wrote the report and that Chase had previously circulated the report itself without making any such fine distinctions.

For the full text of the Chase Bank report, see web:carnet.mexnews, - "The Chase Report (original)" -

In solidarity,
Craig Benjamin

Before anyone complaints, the folowing actions while seemingly childish are quite effective.

As you know, Chase Manhattan Bank is one of the financial institutions that, openly, called for genocide in Mexico. As we believe that it is imperative to bring the war to the home of those who promote it, we are asking the world to call the following numbers throughhout this weekend:

Toll-Free within the USA: 1 (800) 545-0465
From Canada and the rest of the world call collect: (813) 884-2997

The above numbers are Chase Manhattan Bank Credit Card Customer Service's, we were told that they accept collect calls from outside the USA. Please be patient, the lines may be busy.

Let's call them and let them know what do we think about their suggestions to obliterate the EZLN, whether you support EZLN or not.

Remember, the call is on them and a couple hundred thousand dollars is just peanuts for such a large bank, particularly considering the great education they will receive for their money.

In addition, wherever you find their credit card applications; kindly seal and return same to the address printed (post-paid business reply mail). You may want to write "Courtesy of the EZLN" on the applications so the bank knows who is returning their paperwork.

[some details omitted]

MEP-D a non-profit, unincorporated, non-governmental organization is not affiliated with the above, nor with any other organization.

Mexicanos Exiliados Pro-Democracia
Mexican Exiles for Democracy
Mexicains Exiliés Pro-Démocratie

Postal: P O BOX 13665
LA JOLLA CA 92039-3665

Mail: usi@infi.net
Teléfono/Telephone/Telefon: (804)461-3119
Fax: (804)459-2350

Articles

Major U.S. nank urges Zapatista wipe-out: 'A litmus test for Mexico's stability

By Ken Silverstein and Alexander Cockburn

From Counterpunch, Volume 2, no. 3 (1 February, 1995)

In the name of investor confidence, a powerful U.S. bank is calling on the Mexican government to crush the Zapatista insurgency in Chiapas. Heading up the larger Wall Street war party is Chase Bank, specifically its Emerging Markets Group, which has billions at risk in Mexico. Chase's Jan. 13 "Political Update on Mexico," passed to Counterpunch by a banking insider, states bluntly: "The government will have to eliminate the Zapatistas to demonstrate their effective control of the national territory and security policy."

Chase is under no illusions that the December crash of the peso was prompted by the Zapatistas. It is fully aware that the implosion of the Mexican economy was caused by the overvaluation of the peso that enabled U.S. investors such as itself to convert their killings on Mexican bonds into the safety of the dollar.

U.S. financiers and political stragtegists now fear that a Mexican government led by the novice Ernesto Zedillo --rather than by Washington's trusted agent, ex. President Carlos Salinas-- will waver, temporize with the Zapatistas and seek to placate domestic discontent.

But any appeasement of popular fury will come at the expense of foreign investors, whose security in Mexico was the fundamental purpose of the NAFTA agreement. Hence the need to finish off Subcommandante Marcos and his comrades. As the Chase Update put it, "While Chiapas, in our opinion, does not pose a fundamental threat to Mexican political stability, it is perceived to be so by many in the investment community."

Chase plays down the possibility of a negotiated settlement to the conflict in Chiapas, saying 'it is difficult to imagine that the current environment will yield a peaceful solution." Zedillo may not be able to gain the confidence of the Zapatistas and their supporters because "the monetary crisis limits the resources available to the government for social and economic reforms." In other words, foreign investors should have first rights to the dwindling reserves at the Mexican treasury, which will leave almost nothing left to implement anti-poverty programs Zedillo has promised for Chiapas.

The author of the Emerging Market Group's memo is Riordan Roett, director of Latin American Studies at the Johbns Hopkins School of Advanced International Studies and now on a leave-of-absence while serving as a Chase advisor. Known as a conservative but rational sort in academic circles, Roett's views have hardened since he went to work full-time for Wall Street, in the grand homicidal tradition of such academic policymakers as Louis Adolphe Thiers, Walt Rostow, Henry Kissinger and Hemran Cohen.

Roett is said to be particularly bitter over events south of the border because, an informant tells us, he had assured Chase executives that Zedillo --whom Roett has known and worked with for a decade-- could be counted on to do the bidding of foreign investors. Comforted, Chase increased its Mexican investments, only to take a beating when a huge trade deficit forced Zedillo to devalue the peso.

Roett also calls on the Mexican government to take a hard-nosed approach to other difficulties it is facing. The PRI, Mexico's ruling party, has grim prospects for elections scheduled in five states this year. Roett proposes that the PRI solve this problem by stealing the vote. "The Zedillo administration willneed to consider carefully whether or not to allow opposition victories if fairly won at the ballot box," he writes. "To deny legitimate electoral victories by the opposition will be a serious setback in the President's electoral strategy. But failure to retain PRI control runs the risk of spliting the government party."

Roett has been lobbying fiercely in Washington to promote his scorched earth policy for Mexico and to demand that Congress quickly approve Clinton's $40 billion bail-out of Chase and other big investors --a lproblem solved when the president, faced with sure defeat in Congress, used emergency powers to authorize a new rescue package. Roett has briefed Bob Dole, testified before the Senate Steering Committee, which musters conservatives such as Trent Lott and Malcolm Wallop; advised State Department officials; and addressed hundreds of political and financial leaders at a Jan. 11 seminar organized by the Center for Strategic and International Studies.

Roett bordered on hyusteria at the latter affair. Saying that clients were always asking him why the Mexican government couldn't control the Zapatistas, Roett argued that it was "essential, from the investor point-of-view, to resolve the Chiapas issue as quickly as possible." He conceded that his call for war, if heeded by Zedillo, might provoke negative repercussions internationally, but there wre "always political costs in bold action."

Roett's remarks were warmly received by his audience. Elliott Abrams furiously scribbled notes during his presentation while nodding his head in approval. Syndicated columnist Georgie Anne Geyer wrote an article a few days later saying that no one at the seminar "explained [Mexico's situation] better" than Roett, adding that scholars and financiers in attendance "seemed to agree that while . . . [the Zapatistas] do not threaten a wider rebellion in Mexico, they have become a litmus test for Mexico's stability."

Dalal Baer, a Senior Fellow at the CSIS and moderator of the seminar, thanked Roett for his comments and lamented the dilemma faced by Mexico, pressured to open up its political system even though "financial markets might not respond positively to increased democracy because it leads to increased uncertainty." Like Roett and many other "academics", Baer is a creature of Wall Street, serving as an advisor to Bear Sterns & Company.

David Malpass, a director at Bear Stearns, said that inexchange for a U.S. organized bailout, Zedillo should appease foreign investors with a "giant reestablishment of confidence." Malpass and others suggested new privatizations, allowing 100% foreign ownership of the banking system, and opening up Mexico's oil industry. Though not discussed at the seminar, some House Republicans, acting at the behest of Jorge Mas Canosa, head of Miami's Cuban American National Foundation, are also demanding that Mexico cut off commercial credits to Cuba.

For now, Zedillo and a PRI majority will likely reject Roett's final solution for Chiapas. An official from the Interior Ministry at the seminar said the Chase man's call for war was "inadmissible".

But prominent forces in Mexico will be heartened by Roett's analysis. Last Dec. 18 a group of Mexican businessmen reportedly met with Zedillo to demand tha tthe new government go on the offensive in Chiapas. Some high-ranking military officials have long been lobbying for war and, according to reprots from Santiago and Buenos Aires, military advisors from Chile and Argentina --two of the most brutal of Latin America's armies, responsible for tens of thousands of deaths during the seventies 'dirty wars' --have been sent to train Mexican troops.

The parallel here is with the dispatch of Argentine officers to train the Nicaraguan Contras at the start of the Eighties.

Date: Wed, 15 Feb 1995 22:00:18 -0600 (CST)
From: Harry M. Cleaver <hmcleave@mundo>
Subject: More on Banks vs Zapatistas

Note Bene: The information in this interview complements the Chase internal report and Silverstein and Cockburn's article on it. The CSIS meeting refered to here may be the same one mentioned by them at which Roett spoke. Perhaps not. The point is the same. Dresser mentions Goldman Sachs, Merrill Lynch and the Wall Street Journal as wanting the Zapatistas' heads. The list of headhunters could undoubtedly be lengthened. Perhaps it will be.

Copyright 1995 National Public Radio - NPR
SHOW: Weekend Edition - Saturday ( NPR 10:00 am ET)
January 14, 1995
Transcript # 1106-13

TYPE: Package
SECTION: News; International
LENGTH: 1073 words
HEADLINE: Analyst Reveals Prospects of Mexico's Economic Crisis
BYLINE: DENISE DRESSER

HIGHLIGHT:

BODY:

SCOTT SIMON, Host:

I'm Scott Simon and coming up on Weekend Edition, the impact of Mexico's economic crisis on what had been one of the hottest areas of investment - international markets. But first, only six Saturdays ago, Mexican Political Analyst Denise Dresser [sp] spoke with us about the prospects for her country as new President Ernesto Zedillo took office. An earthquake of a kind has occurred since then - the economic crisis that has sliced some 40 percent off the value of the peso and 50 percent off the value of Mexican stocks.

We've asked Ms. Dresser back now. She's on leave from her post at Mexico's prestigious technological University Eta [sp]. She joins us in our studios here. Thanks for being with us again, Ms. Dresser.

DENISE DRESSER, Political Analyst:

Thank you for the invitation.

SCOTT SIMON:

As they say, first the news. The Mexican stock market has rallied a bit, in part because the U.S. government was willing to provide about $40 billion of loan guarantees, so the immediate crisis is over but one would think hardly the effect in Mexico. Help us understand what the impact there has been.

DENISE DRESSER:

Well, even though the immediate financial crisis is over, I think the crisis of expectations and the crisis in political leadership in Mexico remain. Over the next three or four years, Mexicans are going to be paying a very high price. They've lost 40 percent of their buying power. They're going to face, in all likelihood, spiraling inflation. And, above all, there's a sense of collective despair that Mexico has gone through so many economic adjustments over the last 12 years and yet we're being asked to sacrifice one more time and it's not clear that there will be a new recipe, a new formula that will finally propel us into the first world.

SCOTT SIMON:

This was hardly the making of the new administration of President Zedillo, but do you think that they might have acted more wisely in meeting the crisis?

DENISE DRESSER:

I think there were structural problems that determined the crisis, but it was probably exacerbated by Zedillo's lack of political leadership. I think we're witnessing the economic manifestations of political problems, of a technocratic team that came into power viewing politics as a residual variable and haven't been able to market this adjustment program to the Mexican people. I think in the next couple of months, we're going to see severe problems, in terms of the political management of economic adjustment in Mexico city. He was going to have to keep the unions in line in order to maintain wages down and keep inflation down. And given that there's a collective sense that Zedillo is not someone who's in charge, it may be difficult to maintain controls over disaffected and discontented groups in Mexico.

SCOTT SIMON:

Now, as you point out, President Zedillo is in the position now of having to try and hold the line, or even reduce wages among many labor union members, exactly at the same time many union workers felt they were entitled to feel that wages would be expanded.

DENISE DRESSER:

Well, because President Salinas had created an enormous sense of expectations about Mexico metamorphasizing into a modern economy, and those expectations have been dashed. We're going to witness a series of very difficult tensions, because Wall Street, for example, asked for Finance Minister Jimasera's [sp] head. And Wall Street got his head - he resigned. But at the same time now, Wall Street is asking for the immediate resolution of the Chiapas crisis - in other words, a military intervention - not because Wall Street thinks that this is going to explode into national unrest, but because they believe it's the only way in which President Zedillo can show political leadership.

SCOTT SIMON:

Now, when you say something like that, I must say I haven't heard that. And I'm wondering if you've heard it, has it been reliably reported somewhere?

DENISE DRESSER:

There was a conference at the Center for Strategic and International Studies a couple of days ago where representatives from Goldman Sachs and Merrill Lynch and the Wall Street Journal towed the same line. What they're asking for is for a sense of someone being in control of the reigns of a country that seems out of control

SCOTT SIMON:

But did they call for military intervention in Chiapas?

DENISE DRESSER:

Not in so many words, but I think it came across as a very explicit demand. But at the same time, what's so paradoxical is that these same people had been demanding democratization, decentralization, transparency, accountability. And now, when there are problems, they demand authoritative leadership.

SCOTT SIMON:

As I don't have to tell you, there are original opponents of the North American Free Trade Agreement who feel richly ratified by what's happened, and they have even less confidence that Mexico can be a good partner in the free trade agreement because they say the United States and Canada have to prop it up. Are the benefits for Mexicans of that agreement immediately jeopardized?

DENISE DRESSER:

I think in the short term, we are all going to face, as Mexicans, a very severe economic depression; living standards will go down, inflation will go up. Many analysts are suggesting that the fundamentals of the Mexican economy are fine, that it will take us a couple of years to recover, but that we'll be in a much stronger shape after this. I think, unfortunately, many negative stereotypes are resurfacing, and I'm very concerned that this is generating an enormous amount of resentment towards Mexico and that the U.S. should cut itself off from NAFTA and just let Mexico sink. I think what this crisis has revealed is the amount of interdependence that exists, that it's undeniable and it has to be managed politically and economically on both sides of the border.

SCOTT SIMON:

Ms. Dresser, thanks very much for being with us again.

DENISE DRESSER:

Thank you.

SCOTT SIMON:

Mexican political analyst Denise Dresser. She's working this year at the organization Inter-American Dialogue.

Harry Cleaver
Department of Economics
University of Texas at Austin
Austin, Texas 78712-1173 USA

Phone Numbers: (hm) (512) 442-5036
(off) (512) 471-3211
Fax: (512) 471-3510
E-mail: hmcleave@mundo.eco.utexas.edu

Written 10:36 PM Feb 13, 1995 by moonlight in igc:ncdmusa
"EZLN Comm. 2/9/95 "Oil" (English)"
La Jornada 2-13-95 pg. 10
"Oil, the basis for the government's current decision"
EZLN reiterates its disposition to a dialogue without threats, pressures or military attacks"

Communique from the Indigenous Clandestine Revolutionary Committee, General Command of the Zapatista National Liberation Army

Mexico
February 9, 1995

To the people of Mexico:
To the people and governments of the world:
To the national and international press:

The Indigenous Clandestine Revolutionary Committee,
General Command of the Zapatista National Liberation
Army declares the following:

First.- In response to the ultimatum of Ernesto Zedillo given on February 5th 1995 in the city of Queretaro, Queretaro, we say:

1. Ernesto Zedillo has now made a decision. Put between choosing between, for one side, favoring the peaceful transition to democracy, to defending the national sovereignty, to changing the direction of the current brutal path of the national economy and to giving a just and dignified solution to the demands of the Mexican indigenous; and, for the other side, leading the reaction, continuing with the flight of our riches in order to benefit the foreign stock market, continuing with the economic program based on lies and satisfying the anxiousness for vengence of the plantation owners and powerful businessmen in southeastern Mexico. Made to choose, Zedillo has opted to be humble and servile with the powerful, to be haughty and arrogant with the humble.
2. Ernesto Zedillo has given an ultimatum to the rebel forces of the EZLN. He immediately received applause and expressions of loyalty from the men of the gallows and the knife in Chiapas, the support of the usurpers of government in the Southeast and the satisfaction of the powerful foreign capitalists.
3. The EZLN has given constant demonstrations of its disposition to dialogue. Proof of this will can be provided by the governmental representatives with regards to the solution to the armed movement of the EZLN.
4. Now, inexplicably, when the representation of the EZLN had finalized the details for a new meeting with the governmental delegates and when among the indigenous communities which support our just cause, the points of the agenda for the closed-door dialogue were beginning to be discussed, we receive this ultimatum.
5. The EZLN laments this surprising turn in the disposition of the federal Executive. The EZLN does not bow its head before threats. For years we have lived that way, threatened by the mighty men and their private armies. Tired of this, we took up arms to demand that which is the right of whatever human being in whatever part of the world: liberty, democracy and justice. Under threats we will not talk; we will repond to intimidations, reinforcing our decision to risk the ultimate consequences in order to obtain a satisfactory, just and dignified solution to our needs.
6. Zedillo attempts to make the Congress of the Union an accomplice in the use of military force to confront our cause. Protected by a Congress with a PRI majority, Zedillo wants to obtain the legal endorsement to suspend individual rights, to declare martial law and to authorize the massive and indiscriminate use of the federal Army against the insurrectionary indigenous people.
7. The dialogue that the bad government attempted was an effort to bring the EZLN to its knees. It was misled, since January 1st, 1994, we live on foot. On foot we will talk or on foot we will fight, on foot we will live or on foot we will die.
8. The delivery of the wealth of the national subsoil, especially the petroleum, is what is at the root of the current governmental decision. In the top level government circles of Mexico and the United States, the existence of rich, high quality oil fields in the lands of Chiapas is common knowledge. The EZLN is a disturbance to the treasonous plans of the supreme government. This is the price of the loan: it will have to be paid with Mexican blood, and with indigenous blood especially, in order to pay off the debt.

The supreme government prepares the criminal blow, prepares the mass media, the Legislative and Judicial powers, its armed forces and its paramilitaries. The EZLN prepares the resistence. There is no dialogue now. Rather than talk, the bad government made a call to arms.

Second.- Today, February 9th, 1995, at 4pm, hundreds of troops of the federal army took possession of the town halls in San Andres Sacamach, Simojovel and Sabanilla, and reinforced the garrisons with thousands of soldiers in Ocosingo, Altamirano, and Las Margaritas. Minutes later, the bad government announced by means of a radio transmitter and in the voice of Ernesto Zedillo Ponce de Leon, a series of declarations and threats regarding the EZLN and our just cause.

Third.- With regard to the detention of some people in Mexico City and in the state of Veracruz, who, it is said, belong to the EZLN, we are waiting for information about these people to be able to clarify whether they are or are not members of our army. As we have shown in previous communiques, the EZLN always has acknowledged that it has forces in other states in the country, but all are under the orders of this CCRI-CG of the EZLN to not carry out any military offensive against any governmental force or its installations.

Fourth.- Regarding the serious accusation that Zedillo makes against our EZLN, saying that we refuse to dialogue and that we were preparing for a series of violent acts in order to extend our territory, we declare firmly that this is a lie. The disposition to dialoguing and to a just and dignified solution to the conflict has been demonstrated in the statements of our leaders and in the actions to reduce the tensions, which we agreed to in the meeting on January 15, 1995 with the Secretary of State. At all times the EZLN has given demonstrations of its commitment to a just and dignified political solution to the conflict. The supreme government, through the mouth of its representative Esteban Moctezuma Barragan, did nothing but lie to the people of Mexico and lie to us.

The EZLN denies completely that it was trying to buy time or preparing bellicose actions that would break its commitment to an indefinite offensive cease fire while the negotiations for a stable treaty were developing. The EZLN's delays in responding to the government's communications were the result of our complying with our obligation to consult the members of this CCRI-CG of the EZLN, and the great distances and problems with communication that exist in the mountains of the Mexican Southeast also caused the delay in our answers.

It is evident that the supreme government is ignoring the grave conditions of isolation in which that same government has always kept the indigenous communities, and which make communication difficult.

But, above all, it is our lack of trust regarding the supposed will of the government which impedes the possibility that the discussions dedicated to a political solution continue. The climate of belligerence of the guardias blancas in the states, the forced removals of people from their land and the lack of a serious proposal for dialogue on the part of the governmental representatives makes a serious meeting impossible. From the Zapatista perspective the governmental decision to take a military solution to the conflict was made in the United States of America and Moctezuma Barragan only tried to gain time, feigning willingness while the supreme government prepared the farce of detentions in Veracruz and Mexico City, finalizing details of the war and waiting for the end of the rainy season to carry out the planned massacre. The two-sided face of the governmental representatives today now can be seen behind the arrest orders and the military bayonets.

Fifth.- With respect to the calumny about the leadership of the EZLN not being indigenous nor from Chiapas, the EZLN declares that it has no higher command than the Indigenous Clandestine Revolutionary Committee-General Command and that it is composed of, in its totality, indigenous people of Chiapas.

With respect to the origins of subcomandante Marcos, as he has stated since January 1st, 1994, he is not from Chiapas nor indigenous, but he is Mexican and he obeys our political and organizational direction and no one else. The military questions are his direct responsibility, and there is no higher military authority than his, and in our structure, no one else has the military rank of subcomandante.

With respect to the ties of the EZLN to the organization called "National Liberation Forces", the EZLN, during interviews, letters and communiques, has explained that in its beginnings members of diverse armed organizations in the country came together, that from there was born the EZLN and that this, little by little, has been taken on by the indigenous communities until they have become the political and military leadership of the EZLN.

To the name of the "National Liberation Forces" as the antecedents of the EZLN, the government should add those of all of the guerrilla organizations of the 70s and 80s, Arturo Gamiz, Lucio Cabanas, Genaro Vazquez Rojas, Emiliano Zapata, Francisco Villa, Vicente Guerrero, Jose Maria Morelos y Pavon, Miguel Hidalgo and Costilla, Benito Juarez, and many others who are now erased from the history books because a people with a memory are a rebellious people.

We reiterate, the EZLN is an organization of Mexicans, for the most part indigenous, directed by a committee that brings together the distinct ethnic groups in Chiapas and absolutely does not have, in its composition, any member who is not indigenous.

Sixth.-With respect to the threat of the government to enter the Zapatista communities with federal troops and police in an alleged search for the one they accuse of being subcomandante Marcos, the EZLN declares that while it may appear as a good excuse, it will resist and combat in self defense if it is assaulted by the governmental forces.

Seventh.- The CCRI-CG of the EZLN reiterates its disposition to a political solution to the conflict by means of dialogue without threats, pressures or military attacks.

Eighth.- If, regardless of this reiteration of our disposition to dialogue, the bad government goes forward with its war plans, the EZLN declares, now, that we will not give up. We will fight on foot, on foot we will die, but we will not return to living, not ever, on our knees.

Democracy!
Freedom!
Justice!

From the mountains of Southeastern Mexico

Indigenous Clandestine Revolutionary Committee,
General Command of the Zapatista National Liberation Army, February 1995

[translated by Cindy Arnold, volunteer, National Commission for Democracy in Mexico]

Date: Tue, 14 Feb 1995 12:32:41 -0600 (CST)
From: "Harry M. Cleaver" <hmcleave@mundo.eco.utexas.edu>
Subject: AP Story on Infamous Chase Report
To: indig.canada@gnosys.svle.ma.us

The circulation of the internal Chase Bank report calling for the elimination of the Zapatistas has so disturbed the Bank that it has issued a public diassociation from the document and its author --a Chase employee. The following story was filed on the AP wire yesterday. So far I have not seen it in print. Although Chase "disavows" the statement, its spokesperson also admits that the report was one Chase provided to its "capital markets clients." Now, how can a business in the service sector that "provided" this report to its clients as an integral part of its services to them "disavow" something which was clearly its own product?? This is twisting and turning to avoid corporate responsibility, scapegoating the worker whose report it was circulating. Highly amusing at one level. Pathetic at another. (By the way, the fact that Roett is the Director of Latin American Studies at Johns Hopkins, when he is not prostituting his brain and mouth to Chase, raises interesting questions about the nature of such "Area Studies" centers and the role they have played in setting the stage for current Mexican government actions.)

begin AP story----

Chase Bank Denies Urging Elimination of Mexican Rebels
By Donald M. Rothberg, AP Diplomatic Writer

WASHINGTON (AP) - A Chase Manhattan assessment of political and economic turmoil in Mexico said last month that the government would need "to elminate the Zapatistas" to restore stability. The bank disavowed the statement Monday as the work of an independent scholar.

The assessment for Chase's Emerging Markets' Group was written by Riordan Roett, who is on leave as director of Latin American Studies at Johns Hopkins University.

Reached at Chase Manhattan, Roett declined to comment.

Mexican President Ernesto Zedillo ordered troops into the Chiapas state last week to hunt down leaders of the rebel Zapatista movement. In a letter released Monday, Subcommandante Marcos, the rebel leader, accused the government of taking the offensive to repay those who helped ease Mexico's financial crisis.

Roett's assessment, dated Jan. 13, said "while Chiapas, in our opinion, does not pose a fundamental threat to Mexican political stability, it is perceived to be so by many in the investment community."

"The government will need to eliminate the Zapatistas to demonstrate their effective control of the national territory and of security policy," Roett wrote.

After Roett's comments became known, the bank issued a statement saying his opinions "represent his personal views as a scholar. They were not meant to nor do they represent the views of Chase Manhattan."

The brief statement said Roett "has written commentaries that Chase Manhattan's Emerging Markets Group has distributed to its capital markets clients."

Spokesman John Anderson said the Emerging Markets Group is the "area of the bank that specializes in trading, issuing and underwriting emerging market debt."

Anderson refused to comment when asked the extent of Chase Manhattan's investments in Mexico.

"The greatest threat to political stability in Mexico today, we believe, is the current monetary crisis," wrote Roett. "Until the administration of President Ernesto Zedillo identifies the appropriate policies to stabilize the peso and avoid uncontrolled inflation, it will be almost impossible to address issues such as Chiapas and judicial and electoral reform."

After Congress rebuffed President Clinton's effort to provide Mexico with $40 billion in U.S. loan guarantees to help stabilize the peso, Clinton unilaterally came up with $20 billion in support from a Treasury Department fund created to defend the value of the dollar. Congressional approval was not required to use that fund.

Clinton asked Congress to act the day before Roett wrote his memo. He took unilateral action 18 days later.

----end of AP story----

Harry Cleaver
Department of Economics
University of Texas at Austin
Austin, Texas 78712-1173 USA

Phone Numbers: (hm) (512) 442-5036
(off) (512) 471-3211
Fax: (512) 471-3510
E-mail: hmcleave@mundo.eco.utexas.edu