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The economic of Mexico has been ranked by the World Bank as the 13th largest in the globe in terms of nominal and the 11th through purchasing power parity. Mexico economic progress has significantly improved from 1994 crisis to 2002. Afterward, Mexico was affected by the economic meltdown during 2002 South American crisis. Although Mexico maintained a positive progress, there was a low growth rate in economic sector. Moreover, the global financial crisis that started in 2007 until now, it has affected the progress of Mexico economy (U.S. Department of State, 2010). This paper analyses the obstacles to the economic progress in Mexico.
One of the biggest obstacles to the economic progress in Mexico is tax revenue. In all Latin American counties, Mexico is the one that has the lowest tax intakes. This poses a great threat to the economy, as if the government cannot collect enough tax revenue, then it becomes hard for it to improve its infrastructure, which is the bottom-line to economic development.
Another challenging factor is the competitiveness. Mexico is greatly affected by monopolistic market structure in transportation and telecommunication sectors. Consequently, the services from these two sectors have become hard to access due to higher exploitation. This has affected millions of Mexicans who lives under poverty line (U.S. Department of State, 2010).
Moreover, Mexico is facing a serious challenge of competitiveness for its product in the global market. The emerging markets are coming up with higher quality products with lower prices, thus posing a threat to Mexico export merchandises.
Other aspects that have been an obstacle to the economic progress are; decline in oil revenues due to higher prices of oil, low turnover from tourism sector due to H1N1 and higher poverty level among other notable aspects (U.S. Department of State, 2010).
Although Mexico is classified as an upper-middle-income nation, it’s faced with many obstacles that hinder its economic progress. Some of the obstacles are; low tax intakes, monopolies, product competitiveness, global finical crises and many more.