11:35 PM Apr 22, 1996

RESTRUCTURINGS OF ITS FOREIGN DEBT, MEXICO, THE MOST HEAVILY INDEBTED COUNTRY OFF THREATS OF FINANCIAL SUFFOCATION.

The offer of bonds in international markets, and a proposal to the holders of Brady Bonds to change their documents for ones with longer-term maturities are part of the measures drawn up by the government of President Ernesto Zedillo.

With a private and public debt totalling 161.13 billion dollars, 24.7 percent higher than the 1994 level, Mexico is to pay 28.69 billion dollars to its creditors this year - an amount that represents 10 percent of the Gross Domestic Product and 36.1 percent of total exports.

The payment agreements for 1996 - which are piling up, at a time when the economy is showing signs of recovery and productive sectors' demands for financial support are getting louder - are applying pressure to depleted state coffers and forcing a refinancing, said analyst Enrique Quintana.

This week, the government "invited" those who hold 23 billion dollars of Mexican debt in Brady Bonds, with due dates in the early 21st century, to change them for Global Bonds with a 30 year maturity.

According to the government, that strategy could lead to a 1.5 billion dollar reduction of the debt.

Opposition politicians say the government lied in 1995 when it denied rumours of the necessity for a new restructuring, like the one negotiated six years ago.

It is true that debts are being restructured, responded Finance Secretary Guillermo Ortiz. But he added that the negotiations are not for a comprehensive rescheduling of the debt.

In September 1995, authorities had rejected any possibility of a refinancing. "The restructuring of Mexico's foreign debt is neither necessary nor desireable. Information on that issue is inaccurate," stated a communique issued by the Finance Ministry this month.

But to ward off trouble, authorities placed debt bonds for 3.4 billion dollars in Europe and the United States last year. And they repeated the operation for 284 million dollars in the Japanese market in March.

Moreover, the government negotiated with the International Monetary Fund (IMF) an extension of deadlines for a segment of debt that fell due this year.

According to a World Bank report released in March, Mexico has replaced Brazil as Latin America's most indebted country.

When Mexico negotiated loans from Washington and the IMF in 1995 to help it get over its illiquidity problem, Zedillo himself said the new credits did not imply additional indebtedness.

But the statistics say otherwise. In 1995, Mexico's foreign debt grew by 24.6 billion dollars.

Official figures indicate that the amount the government will pay its creditors this year - 31 percent higher than the payments cancelled in 1995 - is 2.37 billion dollars higher than the share of the budget earmarked for social development, and more than 17 billion dollars higher than educational funding.

From 1991 to 1995, the country's foreign debt rose 40.2 percent.

In the past 13 years of structural adjustment programmes, Mexico refinanced its debt six times. It signed four accords with the IMF with respect to those reschedulings, received 60 billion dollars in credit and paid 129 billion dollars.

The problem of the debt is "a vicious circle that suffocates Mexicans with payment conditions which impede their development,"said Enrique Valencia, a member of the Guadalajara University's Research Centre.

"The problem is that after 13 years of sacrifices and tough adjustment measures, the servicing of the foreign debt is paid. But the burden of the debt remains, and it is necessary to resort to new renegotiations and credits to service the debt," said Valencia.

In 1990, then-President Carlos Salinas (1988-94) announced the latest refinancing of the debt, calling it the "second independence." But six years later, attempts to renegotiate continue.

"We are understanding more and more...that to solve the problem of the debt it is necessary to reopen the question" of the country's economic model, said analyst Jose Ibanez.