Sat, Nov 29, 2003 - Page 6 News List

Mexican peasants rally against failed economic reforms

REUTERS , MEXICO CITY

About 100,000 Mexicans, from uniformed nurses to peasants in cowboy hats, rallied on Thursday against President Vicente Fox in the latest challenge to the government's faltering economic reforms.

Protesters braved a thunder storm to crowd Mexico City's Zocalo, one of the largest squares in the world, for the country's biggest demonstrations in years.

"Fox has a Pinocchio nose, he makes big promises and doesn't fulfill them," said transport worker Francisco Sanchez, 43. Witnesses estimated the size of the crowd at 100,000.

Former Coca-Cola executive Fox came to power in 2000 on a wave of optimism, ending 71 years of often corrupt one-party rule by the Institutional Revolutionary Party, or PRI.

But his campaign promises to create jobs and economic growth of seven percent a year now ring hollow.

The final straw for many protesters is an attempt to slap 10 percent value-added tax on food and increase private participation in the electricity sector.

"No to Privatization, VAT and Imperialism," read one banner at the march, headed by unions and opposition leaders.

Foreign-owned banks and the US Embassy were heavily guarded by police but there were no reports of trouble.

Fox says reforms are needed to lift Mexico out of economic stupor. The economy grew only 0.4 percent in the third quarter of this year, lagging way behind the US where Mexico sends 90 percent of its exports.

Unemployment is near six-year highs.

The president has been unable to push his reforms through an opposition dominated Congress. The PRI last week rejected his VAT proposal.

And Fox's energy reform -- a plan to create a power market among large-scale electricity users and increase private capital in the sector -- is also bogged down in Congress.

Fox has made progress in the fight against corruption and drug-trafficking and opinion polls show he is regarded as an honest politician, unlike some of his predecessors.

Many of Mexico's estimated 20 million peasants say the president has not done enough to limit the downside of the 1994 North American Free Trade Agreement, or NAFTA, which has left Mexico open to cheaper agricultural imports.

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