KEY RECENT DEVELOPMENTS IN MEXICO

Reform
Against the backdrop of the challenges that Mexico has faced, reform has
remained one of the major solutions proposed to address the multiple
challenges faced.
In the year 2012, President Pena Nieto took office. This was followed by an
impressive economic growth of 1.4% by 2014, leading to questions being asked
on how Nieto had managed to attain such an impressive growth rate.
It was established that this revitalization has been due to Pena Nieto’s
embrace of market and investor- friendly reforms that brought about the
following:
 Boost competition
 Increase production especially of oil
 Liberalization of the oil sector- Nieto made a historic push to liberalize
the oil sector that for many decades been under state control! Initially,
PEMEX, the state-owned oil company, had been responsible for a fifth
of the total government budget. However, inspite of this, PEMEX was
woefully inefficient. Nieto introduced measures to open the oil industry
to private investment and competition in order to strengthen the
country’s economy.
 Reform in the Telecommunications sector- this was intended to break
up long-held private monopolies.
 Financial system overhaul to strengthen competition.

Overall, there were positive gains accruing from the above reforms.
However, the country continues to be plagued by poor accountability
structures, leading to corruption.
Corruption has long been a problem in Mexico, some economists estimate that
endemic/widespread corruption costs the country between 2-10% of its GDP
annually!
Crime- is on the rise, largely due to rural-urban migration in which hundreds of
thousands flock to the cities in search of a better life, only to find themselves
living in conditions of urban poverty and squalor. Many cannot find jobs,
resorting to crime to make a living. Hence, this has led to all kinds of serious
social problems.
Hundreds are killed every year in Mexican drug wars, and as one writer puts it,
“no one is immune to violence in that country”. The same writer tells us that
over the past decade, nearly 100 mayors have been killed across the country
for trying to clean-up drug related activities including drug smuggling.

Political Uncertainty/Fragility
There are also problems of political uncertainty/fragility. One scholar tells us
that in its last mid-term parliamentary election, seven candidates were
murdered while another twenty were forced to drop out in fear of their safety.
Such political uncertainty got worse when Nieto’s key political rival, Manuel
Lopez Obrador, decided to run a fiercely anti-reform campaign where he
“promised” to undo many of Nieto’s key reforms in order to bring the country
more in line with Leftist (Socialist) Latin America!
It is widely believed that this risks a return to deeper economic stagnation in a
country where poverty remains a very serious challenge.

NEXT WE LOOK AT THE PERFORMANCE OF MANUEL LOPEZ OBRADOR SINCE

HIS ELECTION AS PRESIDENT IN JULY 2018.