The Mexican Elections: Why They Matter
Change in Mexico goes beyond who becomes president because a broad political pact is necessary to enact the reforms necessary to economically modernize Mexico. The main challenges (fiscal reform, energy reform, educational reform, labor reform, and rule of law) are the same challenges that President Vicente Fox faced during his most recent six-year term in office. Without these reforms, Mexico will continue to struggle with a large informal market, a state-owned oil industry that is not self-sustainable, and a weak tax base.
Furthermore, it is important to point out that Mexico is bifurcated into two economic realities: an increasingly competitive north that in many ways resembles the border towns in the United States and a lagging south that more resembles the economies of Central America. Also, monopolies and oligopolies in important sectors such as banking and transportation hinder the country’s growth potential. Mexico has fallen in the world in terms of its competitiveness and as a recipient of foreign direct aid. The president alone is not able to bring about the necessary changes; all political parties must commit to reform, preferably through a national political pact.
American Enterprise Institute for Public Policy Research
Washington, DC, USA