January 17, 2014
In Latin America, this looks to be the year of Brazil — thanks to the impending World Cup and presidential elections. But with another lackluster year looming in emerging markets, fans of transformation, growth and investment potential should instead look to Mexico.
Brazil’s president, Dilma Rousseff, is expected to win a second term this year, and its soccer team stands a good shot at victory. But growth has slowed considerably. In the world’s seventh largest economy, reforms are stagnating and the country faces a possible ratings downgrade.
Mexico, by contrast, is in the throes of serious reforms. It will likely lead Latin America with at least 4 percent growth this year and an improving investment outlook. Standard & Poor’s recently boosted Mexico’s credit ratings because of energy reforms that the rating company trumpeted last month as a “watershed moment” for the country. It is becoming a story of inverted fortunes, as Michael Shifter and Cameron Combs of the Inter-American Dialogue recently wrote.
January 9, 2014
The Guardian, 01/09/2014
Mexico begins the new year bathed in predictions that its “moment” has finally arrived thanks, primarily, to a frenzy of reforms since President Enrique Peña Nieto took office in December 2012.
But beneath the glow, question marks hang over the country because of its longstanding security crisis, rampant poverty, inequality – and even the reforms themselves.
“If things go well, Peña Nieto could go down in history as one of the great reformers of the past 100 years,” says political analyst Raymundo Riva Palacio. “If it does not, the failure will be monumental.”
January 9, 2014
The Economist, 01/04/2014
The Central de Abastos wholesale market is the largest of its kind in the world, sprawling over an area half the size of Mexico City’s airport. Yet on New Year’s Eve, it was still hard to move for the shoppers clogging up the 1-kilometre (1,100-yard) grocery aisle, buying everything from pig’s heads to sugar cane to grapes for that night’s festivities.
Outside, it was another story. People without enough money to shop were sifting through piles of discoloured and discarded avocados and tomatoes, wrapping what was still edible in scraps of newspaper and furtively carrying them off for their own more meagre supper.
For many of these Mexicans, life is getting harder. A fiscal reform that took effect on January 1st introduces a number of new taxes that are chiefly aimed at the rich but end up clobbering the poor. A value-added tax of 16% was slapped on various forms of public transport. In Mexico City the underground “metro” fare had already gone up before Christmas, a 66% increase from 3 pesos (23 cents) to 5 pesos. As part of a government drive to fight obesity (see article) the new levies also include a tax of 1 peso per litre on soft drinks and an 8% levy on some particularly calorific foods.
January 3, 2014
By Duncan Wood and Christopher Wilson
FT Beyondbrics, 1/3/2014
We will look back on 2013 as a truly historic year for Mexico. The scale of the reform process that was undertaken and largely achieved by President Enrique Peña Nieto is astonishing by comparison not only with other countries around the world today, but also in the context of recent Mexican history. For 15 years Mexico had seemed condemned to endure one of the less palatable elements of democratic systems, legislative gridlock. However President Peña Nieto, through a combination of determination, hard bargaining and political skill, has managed to work with the congress to pass a series of major reforms that do much to put Mexico on the road to modernity and competitiveness.
December 19, 2013
Bloomberg News 12/18/2013
Jim O’Neill has been tracking economic reform initiatives in countries across the world during his 33-year career on Wall Street. Only a few of them, he said, rank higher than what Mexico achieved this year.
“I can’t think of many other countries that have had a period of such deep reforms,” said O’Neill, who coined the term BRICs while serving as a top Goldman Sachs Group Inc. economist in 2001, correctly predicting a surge in growth for Brazil,Russia, India and China. “Markets are only just really starting to give Mexico any credibility now that the energy reform is going through.”
December 2, 2013
Global Post, 11/28/2013
The head of Mexico’s main leftist party said on Thursday it had pulled out of a cross-party pact on economic reform, which could push the government toward a more radical plan to spur investment in the oil industry wanted by conservatives.
Such a move could herald more intense opposition in the street to President Enrique Pena Nieto’s plans to open up the state-run energy industry to greater private investment.
December 2, 2013
Los Angeles Times, 12/1/2013
To President Enrique Peña Nieto’s supporters, his first year in office has been a time of bold promises kept as he pursues an ambitious agenda of reforms designed, in the long term, to bring peace and economic growth to Mexico.
But in the short term, by many measures, his country remains a mess. Though he promised to focus on Mexico’s economic potential, Peña Nieto has presided over an economy that has hardly grown at all. Though he vowed to reduce the kind of violence that affects innocent citizens, his record has been mixed, with kidnappings and extortion rising nationwide even as the number of homicides drops.
December 2, 2013
USA Today, 12/1/2013
Peña Nieto arrived in office one year ago on Dec. 1, 2012, promising to calm the country and produce long-stalled structural reforms, which he said would allow Mexico to achieve 6% annual growth.
But Peña Nieto’s anniversary arrives amid a growing pessimism as the economy slumps, his agenda of structural reforms encounters resistance, and the security situation remains the same or worse in many places — prompting fed-up citizens in some areas to grab guns and organize vigilante groups.
November 25, 2013
The Economist, 11/23/2013
When Enrique Peña Nieto spoke at an Economist conference this month, he was reminded that this newspaper had cautiously endorsed him for president last year as the “least bad” of the candidates. The audience laughed nervously; easy-going in person, the president is rarely exposed to such public leg-pulling. But though his first year in office has had downs, it has had more ups. If he can bring home the raft of reforms that he has launched, he could transform Mexico.