Infrastructure and market capabilities and the risks and potential bottlenecks

The growth and prosperity of Mexico depends upon various factors. The country is trying to grow through a combination of industrial growth, service sector growth and public welfare measures. All these depend highly on infrastructure and the competitiveness of the country. The country has to develop its infrastructure and complement the growth measures through interventions in the labour market as well as other sectors that keep the competitiveness of the country at par with the counterparts.

Infrastructure:

Infrastructure is a much needed ingredient for the development of any country. With its leftist leanings, mexico had monopoly over most of the infrastructure areas such as energy, roadways, railways and ports. Recently, we can see the trend changing. Mexico is looking to bring in private investments into some sectors and to reform almost all of the major sectors such as telecommunications and energy.

Energy:

President Enrique Peña Nieto recently introduced a legislation which is due to be passed in April. Once passed, this would end a 75 year old era of monopoly on oil production. The public oil company Pemex will be more autonomous and will have a greater control over its activities. The government has also given PEMEX permission to create tie ups with private players over the world in order to sharpen the R&D in the field of oil related energy research. This move also has an agenda of tapping into the vast reserves of shale gas. The government also introduced more private partnerships in the energy segment apart from oil and natural gas. However, Mexico still has a long way to go in the energy segment and to create a sustainable energy infrastructure. With the growth in a lot of segments demanding high amounts of power, the infrastructure should be able to support the extra demand.