Nearshore Americas

OECD Urges Mexico to Remove Barriers to Investment

The Organization for Economic Cooperation and Development (OECD) has suggested that Mexico removes all obstacles standing in the way of domestic and foreign investors, in order to boost the economy faster.

Thanks largely to a poor educational system, employee productivity in Mexico is one of the lowest among the OECD countries, stated the organization in its annual report.

To increase its economic output, OECD analysts suggest that Mexico should open up its market wider, bolster its education system, and adopt more technologies.

The organization has also urged the government to improve the skills of its workforce, saying Mexico’s labor productivity compared to that of the United States fell from 40% in 1991 to 29% in 2016.

It has also called for a cut back on regulatory obstacles, more progress in combating the informal economy, and a reduction in corruption.

“The Mexican government should do more to cut poverty and create jobs for young people,” the 35-member economic organization demanded.

Although the value of Mexico’s total exports recently rose by 10%, the bulk of these exports were made by multinational corporations established in the country.

“The challenge is to link Mexican SMEs into these flows. The share of Mexican SMEs in global value chains is still very low.” the report noted.

Considering its assessment, GDP growth rebounded in Mexico to 1.0% in 4Q17, following the contraction of 0.3% in the previous quarter.

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The international organization has recently upgraded its growth forecasts for the Mexican economy, predicting that Mexico’s GDP will grow by 2.5% this year and 2.8% in 2019.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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