Getting it Right

Strategic Priorities for Mexico

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Mexico has been a reform champion, having launched ambitious reforms in a broad range of areas. While the reforms are showing first positive effects they are not delivering to the extent they could. On many dimensions of well-being, including education, health and security amongst others, Mexico still lags behind the OECD average and regional development remains very uneven. While Mexico has done a lot to build a competitive economy, progress has been too slow in two complementary areas, namely strengthening institutions and fostering inclusion. The capacity of the public sector is weak, corruption remains widespread and the rule of law is week, all hindering trust in government institutions and the effective implementation of policies. Similarly, persistent inequalities and widespread poverty do not only mean that higher growth does not translate into widespread gains in well-being; these inequalities are also holding back growth as Mexico is not using all available talent. Mexico has taken measures to tackle these issues, but important implementation gaps remain. It will be important for the next government to build on past reform efforts, ensuring the full and effective implementation of already legislated changes to allow for reform continuity and to launch additional reforms in several priority areas, including the rule of law, education and social protection. Only then will Mexico be able to deliver a higher quality of life for all its people.

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Fully reaping the benefits of recent competition-enhancing reforms

Competition is essential to the functioning of markets. It fosters innovation, productivity and growth, which, in turn, create wealth and help to reduce poverty. Over the past years, Mexico has implemented ambitious reforms to free up its economy. Competition was enhanced in many sectors, most notably in the energy sector – electricity, oil and gas – and in telecommunication services. The role of regulators has been strengthened and the competition authorities have been empowered to deter collusion and other anticompetitive practices. Building on these achievements, Mexico now needs to ensure that entrepreneurship thrives and opportunities are spread evenly across the country. Removing existing barriers in services trade would benefit manufacturing and further facilitate the country’s integration into global value chains.

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