There’s a lot to be excited about in Mexico these days. The country is pushing through a number of reforms that, as President Enrique Peña Nieto described in an opinion piece for the Financial Times, “intertwine in a single goal: to increase Mexico’s productivity and competitiveness.” Of particular note are the ambitious energy reforms, which Peña Nieto details here:
Today we are the world’s 10th-largest oil producer and our recoverable shale gas resources rank sixth. The energy reform will allow us to take advantage of our natural resources in a sustainable way, while observing basic principles of sovereignty. This reform will ensure the energy sector again becomes an engine for economic growth, by guaranteeing the supply of oil, gas and electricity at competitive prices.It creates opportunities for private companies to invest, and improve and expand the sector’s infrastructure. This will increase oil production from the current 2.5m barrels a day to 3m by 2018. Likewise, natural gas production will grow from 5.7bn cubic feet a day to 8bn by 2018. Pemex (Petróleos Mexicanos) will be more competitive and will have the autonomy needed to operate as a modern company, as well as the opportunity to forge alliances and reduce operating costs. The reform will promote investment in renewable energies, an area where Mexico has immense potential. It is expected that with this reform, Mexico’s gross domestic product will increase by 1 per cent by 2018 and 2 per cent by 2025.
The media, when it deals with our southern neighbor at all, would still rather focus on immigration issues or the country’s grisly battle with drug cartels. But while both of those are serious problems, there’s another side to Mexico that deserves recognition, a side that Peña Nieto highlighted in this FT piece.Mexico has sizable reserves of oil and gas, a burgeoning manufacturing sector, oodles of human capital, and now, with this raft of reforms, a path toward making the most of all of these resources. This reform agenda is ambitious, and it’s good news for both Mexico and the United States. North America’s star is rising.