The Comprehensive On Reform

Agenda was divided into 5 categories (democratic governance, transparency, rights and liberties, security and justice, economic growth & competitiveness) focusing on 95 initiatives. A labor reform was approved during the transition and included changes in the resolution of labor conflicts, incorporating different models of contracting, and reducing hiring and firing costs. An economic competition reform included the conception and establishment of agencies in charge of monitoring the new rules of the market. A fiscal reform had the main objective of gradually increasing non-oil revenues for the government, mainly through increases in consumption taxes, closing of loopholes and exceptions, and limits on corporate deductions.

A financial reform was created to rise access to credit for households and small businesses by reducing costs and risks, as well as to increase options through development and commercial banks. A telecommunications reform allowed foreign companies to invest in the sector, ordered the creation of an optic fiber network, and a new television network.

An energy reform transformed the state-run oil and electricity monopolies into private-like enterprises with the goal of generating revenue.

It also allowed them to form partnerships and give contracts to private national and international companies to invest in the production cycle, keeping the distribution and transmission as exclusive activities implemented by the government. This reform also included the creation of new regulatory agencies. An education reform intended to increase education quality, mainly through the evaluation of teachers and expansion in parent and community involvement in basic education. 1.2 The structural reforms launched under President Peña Nieto were an important step towards a stronger institutional arrangement in Mexico.

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However, the country still faces significant challenges. Productivity growth is low in many sectors and around 30 million people continue to work in informal jobs without access to stable incomes, financial services, health care or pension coverage.

Looking forward, it is difficult to judge what will be the reforms’ impacts on aggregate productivity, but observing the preliminary outcomes, a point to make is that they mostly focus on a subset of policies and institutions in the “world of market conditions” . By and large, they have little or no impact on labor and tax policies, which are central to misallocation in Mexico. 1.3 Five years after the reforms were approved, Mexico’s economic development did not meet the potentials expected. Despite structural reforms were said to have a multiplying effect, GDP growth did not manage to reach even the inertial scenario of 3%, and the International Monetary Fund has kept its 2.3% growth estimate for Mexico in 2018. The spike of interest rates, the impact of insecurity on investment plans, a fall in oil prices, uncertainty caused by the revamping of the NAFTA and the 2018 electoral process were some of the main factors explaining these underperforming results according to the Mexican Confederation of Industrial Chambers. Currently, a major challenge is to guarantee the full and effective implementation of the approved structural reform agenda at the local level. Also, effective reform impl