Mexico:Trouble After an Earlier Disaster:

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Still, some of the government's actions have left it open to charges of inefficiency and insensitivity. Three weeks after the earthquake, for example, De la Madrid established a national reconstruction commission to coordinate relief efforts. Hundreds of businessmen, intellectuals and opposition politicians were invited to attend the commission's inaugural session. Since then they have heard nothing.

Businessmen complain that the government has monopolized Mexico's domestic relief effort through a state-controlled reconstruction fund. Some $71.3 million has been given by local and international donors, but there has been no public accounting of relief disbursements. Says a Mexican chemical manufacturer: "The private sector wanted to set up its own fund, but the government was afraid that Mexicans would perceive other sectors as being more effective."

And with good reason. The government's most loudly publicized relief effort has been a public relations disaster. Officials announced last month that the government would expropriate for housing reconstruction 618 acres of high-density Mexico City real estate that had been damaged in the quake. The $50 million plan envisioned spreading payments for the properties over ten years at prices well below market value. A general outcry arose when it was discovered that among the expropriated properties were undamaged single-family dwellings that should never have been included in the scheme. Several civic officials were fired as a result of the gaffe.

The urgent need to deal with the aftermath of the quake has only complicated Mexico's other severe economic problems. After three years of austerity, De la Madrid's government has failed to conquer a government-spending deficit that last year totaled 7.4% of gross domestic product. Inflation during the same period reached 60%. Under an agreement with the Washington-based International Monetary Fund, the government this year had promised to try to reduce inflation to 35%, but economists now believe that the rate may again rise to the 1984 level. Meanwhile, the purchasing power of Mexican workers has reached its lowest level in twelve years. As a U.S. official in Washington puts it, De la Madrid's "economic game plan is not working." In the next breath, the official adds that the Mexican President is "doing his best." The worry these days in Mexico City is that both statements may be equally true. --By George Russell. Reported by Ricardo Chavira and Andrea Dabrowski/Mexico City