| | |  Editorials 
Mexico is No Longer Risky Business
 Globe and Mail
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November 12, 2010
Mexico, still reeling from the effects of the recession and persistent negative headlines about drug violence, has received a gold star from the World Bank, showing there is a lot more to this country than gun battles and the occasional beheading.
The World Bank's annual report, Doing Business, has declared the country the easiest place in Latin America to run a company. Worldwide, Mexico was ranked 35th of 183 countries, easily beating out Spain and Italy. Peru and Colombia have also made great strides, and were ranked 36th and 39th.
Mexico's high ranking shows that the steady efforts of President Felipe Calderon and his National Action Party (PAN) to reform its economy, reduce tariffs and eliminate local regulations have borne fruit. It serves as an example for neighbouring countries, including Brazil, which was ranked 127th. Mexico, a country of 110 million and Canada's third largest trading partner, won high marks for its launch of an online one-stop shop for initiating business registration, improved construction permitting and increased options for online payments of taxes.
The report does not take into account such factors as the state of a country's economy, corruption or security, but measures instead the ease with which an enterprise can navigate regulations around setting up, running, and closing a business, trading with foreign companies, and paying its taxes.
Brazil, set to become the world's fifth largest economy, has benefited from a commodities boom and extraordinary leadership; but it has much work to do in other areas, and should follow the example of Mr. Calderon. It takes nine days to start a business in Mexico, compared with 120 in Brazil, and 141 in Venezuela. While Mexican firms spend 404 hours a year paying taxes, Brazilian companies spend 2,600 hours engaged in the same task. It takes four times the number of days to deal with construction permits in Brazil than in Mexico.
To be sure, Mexico still faces many structural economic challenges, including the need to dismantle powerful interest groups and monopolies. But the country deserves credit for using technology to reform a once-cumbersome bureaucracy, and to make it easier to do business on the ground than almost anywhere else in the region. |
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