The New Prosperity

Mexico, in song and legend a sun-drowsy land where only the beans jump, is leaping energetically toward new levels of prosperity in mid-1956. Industrial production, reported the RFC-like Nacional Financiera last week, is running a spanking 12% ahead of last year's record rate. Farm output has risen 50% in the last three years. In both consumer goods and food production, Mexico has gained important ground toward self-sufficiency. And like grace notes to these impressive fundamentals:

P: The stock market is high and booming.

P: The government's budget is in balance.

P: Building is up 25% over last year's record level.

P: Capital-goods output--notably steel and industrial machinery--is rising fast.

Signs & Portents. Signs of the boom are apparent everywhere. On what used to be wasteland at the edge of Mexico City, workmen recently planted 10,000 lampposts along the street network of a big new housing development. One of Latin America's biggest medical centers is rising on 33 acres of downtown land--and it is only one of 6,000 new buildings, many of them spectacularly clad in plate glass or bright-colored masonry, that are going up yearly in the capital.

Everywhere business on the notoriously rickety second-class buses is declining in favor of new completos (first-class buses). Wealthy Mexicans jam the seashore resorts, or splash in heated swimming pools in the high, cool capital. Long trains chuff north through Sonora and Chihuahua to load record wheat crops.

Ultimate Challenge. Perhaps the most striking single transformation wrought by the boom has taken place at Sahagun, a desert town 70 miles north of Mexico City. Only two years ago Sahagun was a textbook example of Mexican poverty, peopled by sleepy peons who made a living tapping "honey water" from the heart of the maguey cactus to ferment into pulque or distill into mescal. Then the Mexican government, relying mainly on generous concessions to private enterprise, set about overhauling the town.

Now Sahagun is the clean and prosperous home of three modern factories. One is the $32 million Diesel Nacional, Inc., managed by Italy's Fiat works and. financed half by Fiat and half by Mexicans.

There, on a production line neat as the works of a watch, 1,000 workers assemble diesel trucks and little Fiat cars. Another factory builds boxcars for Mexican railways, employs 228 men. The third is a $4,000,000 made-in-Japan factory that last week started producing the first made-in-Mexico textile manufacturing machinery. Financed mostly by Tokyo's Toyoda Mills, it is run by Japanese engineers, employs 800 Mexicans whose highest skill until lately was making mescal.

As a result of the overnight industrialization of Sahagun, most of the population of 10,000 has moved out of mud huts and into modern, pastel-painted brick-and-stucco houses that flaunt gardens, picture windows, TV antennas. Good wages buy good food and good clothes for children to wear to good schools.

"I'll Never Go Back." Mexico's boom owes a lot to some 15,000 U.S. businessmen who have streamed back in the last decade as though the wave of nationalization in the '30s (most notably, the expropriation of the foreign-owned oil industry) had never occurred. Such names as Sears Roebuck, General Motors, Celanese, Ford, American Smelting and Refining, Goodyear and Anderson, Clayton are prominent on billboards and office directories. Welcome now because they stress prosperity-building manufacturing, U.S. private enterprisers have pushed their total investment to $560 million. The U.S. touch is everywhere; e.g., Mother's Day, a purely north-of-the-border invention, drove retail business to record heights in May.

But the capital that fuels Mexico's boom is mostly Mexican. In recent years government and private investment in building up the nation's productive capacity has averaged 14% of the economy's total output, which matches the U.S. rate.

Finance Minister Antonio Carillo Flores cautions against confusing "progress" with "abundance." Mexico, he says, is still "a poor country with long-unsatisfied needs." But after another decade of diverting 14% of the gross national product into capital investment, Mexico will probably rank, as nations go, among the rich.

This file is automatically generated by a robot program, so reader's discretion is required.