Washington Post: Mexico’s economy was supposed to soar. It’s starting to flop.
Largely lost amid the frantic scramble after drug lord Joaquín “El Chapo” Guzmán’s dramatic prison escape, one of the biggest leaps of faith for the Mexican economy landed with a flop.
At the first auction last month to sell the rights to drill for oil in Mexico — as the country opens its oil industry to foreign investment for the first time in eight decades — the government sold just two of its 14 blocks. The disappointing showing for President Enrique Peña Nieto’s signature economic reform prompted the government last week to modify the terms of the contracts for next month’s auction and added to what has been a noticeable string of bad news for Latin America’s second-largest economy.
Mexico has been held up as one of the economic bright spots among emerging market economies, as Peña Nieto’s government has pushed through constitutional overhauls aimed at making major industries such as oil and telecommunications more competitive. But in recent months, Mexican newspapers have kept running banner headlines of economic gloom: The value of the peso has plummeted to record lows against the dollar, growth rates have shrunk to dwarfish size, and the only things that seem to be getting bigger are the poverty rate and the gap between rich and poor.
WNU Editor: These new Mexican government reforms and policies are "too little and too late", and are only being implemented to counter the fall of oil prices and the collapse of OPEC. The problems in Mexico have always been the same .... corruption, an economic system that favours the "connected", crime and the drug trade, and a government bureaucracy/political elite that is hostile to entrepreneurs and free markets. If Mexico can focus and solve those issues .... it will then be in a position to take advantage of being next door to the largest economy to the world .... instead of viewing the U.S. as a place to dump its disadvantage and less fortunate.