Former Nonresident Fellow
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Mexico has taken a major step to further liberalize its economy. In a historical move, the country opened its energy sector to private and foreign investment in 2013—after more than seven decades of a tightly controlled oil industry. This major structural reform contains the promise of furthering Mexico’s development. There are, however, important issues that need to be resolved before this promise can be fulfilled. One of those challenges has to do with the rule of law. This essay explores three major issues with Mexico’s weak rule of law that threaten to foil the successful implementation of the new reforms and cut short the promise of development. The first consists of the effects violence and organized crime. The second issue is the increasing corruption that prevails in the country. And the third involves the potential for social conflict in the face of contradictory priorities when it comes to natural resource allocation. This essay argues that Mexico must anticipate potential problems in these three areas and resolve them before it can call energy reform a success and reap its benefits.
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