Mexican infrastructure
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Mexico has made great economic strides over the past decade, and output growth is expected to reach 3.5-4% in 2008. However, the latest Economic Survey of Mexico says that only a renewed reform effort will raise the economy to a higher plane of growth and help close the gap with wealthier OECD countries.
One area for action examined in the report is how to lift the quality and quantity of infrastructure services, whether in transport and telecommunications or energy. Policy efforts have reduced restrictive regulations and boosted competition in railways and ports, for instance, but further improvements would not only help give productivity, innovation and growth an extra fillip, but would allow Mexico to draw maximum benefits from globalisation, the report suggests.
Mexico’s regulatory environment is more restrictive than the OECD average for electricity, gas and postal services, for a start. Even in transport where regulations are relatively less restrictive, there is room for improvement. Take roads, for instance. About 80% of land cargo is transported by buses and trucks, but while the authorities have successfully encouraged private sector participation in road building and maintenance, the country’s ageing road system is still in poor repair at federal level, particularly at state and local levels. The authors believe that as well as regulatory changes to bolster these partnerships, an increase in public spending on road maintenance could bring the connectivity and density that Mexico’s busy economy needs.
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