Big Day for Mexico

Mexico’s congress approved the energy reform opening the oil sector to private investment (both foreign and domestic). 

http://www.bloomberg.com/news/2013-12-12/mexico-lower-house-passes-oil-overhaul-to-break-state-monopoly.html

I think this quote says it well

Oil production has stagnated partly because energy didn’t get the competitive impulse from Nafta that other industries did, said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington.

“What this reform does is it now exposes the Mexican energy sector to national and international competition,” said Wood. “It marks a fundamental paradigm shift in the mentality of the energy sector. Now we get beyond 1938.”

 

It’s a very important trend to eliminate state monopolies and reduce state control of the Mexican economy in general. Not only is it inefficient and competition reducing, but it also breeds corruption. I still do not understand those who view this as a step in the wrong direction and their impulsive hostility towards foreigners. If Mexico is going to take the next step, it needs to embrace competition and capital, foreign and domestic. 

 

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