G.I.D.C : Three Months to the Elections in Mexico. What Kind of Economy Will Outgoing President Enrique Peña Nieto Leave Behind?
A series of economic and social reforms carried out by the administration in the last six years have succeeded in strengthening the Mexican economy and in attracting many companies and investors into the Latin American country, which is expected, according to estimates, to become one of the ten strongest economies in the world within a few years.
SEATTLE, March 19, 2018 /PRNewswire-USNewswire/ --
BY JEREMIAH SHEPHERD
In 2012, a turnaround occurred in Mexico's economy. After years of stagnation in the economic and social spheres, the elected president, Enrique Peña Nieto, began with the implementation of dozens of economic and social reforms.
As a first step towards reform, the three largest parties in Mexico signed an agreement that defined the future of the country and made it possible to neutralize monopolies, increase business competition, increase tax revenues and create new jobs.
The automotive industry was one of the first targets. Mexico has become a favorite destination for some of the world's largest automobile manufacturers.
Mercedes-Benz, BMW, Audi, Kia Motors, etc., opened new manufacturing plants in various cities in the country and opened tens of thousands of new jobs to Mexican citizens. To date, Mexico is the fourth largest vehicle exporter in the world after an investment of USD 19 billion in the automotive sector.
The new reforms have been implemented in a variety of other areas.
In the television, communications and Internet markets, tariff reductions have been drastically reduced with the entry of global communications companies, such as AT&T and Virgin Mobile. In schools, libraries and hospitals government provides free web services.
Also the oil and gas sector, which until recently was controlled by several companies, was opened to dozens of international companies that invested hundreds of billions of dollars in gas and oil deposits.
The electricity market has been streamlined, while reducing tariffs and supplying electricity to hundreds of thousands of residents in remote communities.
Along with the economic reforms, Mexico has also undergone a series of social reforms in recent years.
The education system received higher budgets, the legal system shifted to uniform conduct, and in many areas tax incentives and regulatory benefits were granted.
According to the United Nations Conference on Trade and Development, Mexico is now the ninth attractive country for external investors.
Evidence of this is foreign investments in the country, which climbed over the past five years to USD 175 billion, more than during the period of any other administration.
From the National Insurance Institute in Mexico, we were told that in the past five years, about two million new jobs have been created in the country.
And this alongside a low unemployment rate of about 4% and a growth rate of 2.5% per annum over the past two years.
A recent study by the Spanish banking giant BBVA points to the continued growth of the country due to increased competitiveness, the resilience of banks, momentum in the export sector, food price stability due to its own production and stable inflation.
The World Investment Bank - Goldman, Sachs and Nomura –envisionsthat the country will continue to strengthen, and it predicts that by 2020, Mexico will join the top ten of the world's largest economies.
In a few weeks, a new president will take office in Mexico. Quite a few eyes have been directed at the developing country in recent weeks, and the question arises as to whether the new president will succeed in continuing economic growth, implementing the reforms, which his predecessor began, and turning Mexico into the engine of new global growth.
The author is a market analyst and researcher of developing economies
CONTACT: [email protected]
SOURCE Global Investment and Development Center
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