Webcast Recap

Santiago Creel, Senator from the National Action Party (PAN), reflected on Mexico's economic and security challenges. Resolutions will require long-term and at times politically difficult decisions, but must be addressed to rectify Mexico's economic stagnation and public security challenges.

The Mexican Economy

The key question about the Mexican economy, Creel emphasized, is why it has grown too slowly to be very competitive and to employ its potential workforce. Partial blame, he suggested, can be placed on policymakers' unwillingness to make tough economic decisions. The most pressing at this time is a tax reform that would prevent a massive budget shortfall by simplifying the process, widening the tax base, raising selective taxes (such as on beer and tobacco) and closing loopholes in tax law. To do so, legislators must be willing to make difficult decisions for the long-term good, rather than politically advantageous ones for the short-term.

A larger challenge is that Mexico's economy is dominated by monopolies, from the telecommunications sector to the educational system. This lack of competition has led to further inequality in the country. Education is a particular challenge, Creel suggested, because today a student "cannot advance" with the monopoly of the powerful teachers' union has failed to properly educate its students. He cited a recent test in which eighty percent of students tested failed both Spanish and mathematics. The unions in all sectors should be democratized and made more transparent to prevent this inefficiency and disappointing results, he stressed.

Nor have Mexico's extensive social programs meaningfully lessened the inequality gap; today, ten percent of Mexicans own forty percent of the country's wealth. To address this, policymakers should face these difficult challenge long-term challenges instead of focusing on the short-term political landscape.

The Security Situation

Mexico also faces severe security challenges, but according to Creel, is fundamentally moving in the right direction.

The nature of drug trafficking in Mexico has changed in the past decade, he noted, as the country moved from just a transshipment country to a market for drugs. Cocaine consumption has doubled in the past six years, and marijuana consumption has increased at almost the same rate. Drug cartels now compete for both territory and markets.

The most visible aspect of the fight against organized crime has been the armed forces, but a true improvement of the situation can only come about with reforms to public security forces, the legal system, and the political system.

By Katie Putnam