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The Mexican Institute for Competitiveness (IMCO) positioned Mexico as the 37th most competitive country in the world in a list of 43 countries, according to its 2021 International Competitiveness Index (ICI).
KEY POINTS
The Mexican Institute for Competitiveness (IMCO) positioned Mexico as the 37th most competitive country in the world in a list of 43 countries, according to its 2021 International Competitiveness Index (ICI).
Compared to the 2020, Mexico dropped two positions in the ICI, finding itself in the “Low Competitiveness” category.
The aspects evaluated in which Mexico managed to stand out were.
Mexico performed best in the “Factor Markets'' and “Economy” sections. While it performed worst in “Energy”, “Health”, and “Connectivity”.
DEVELOPMENT
The Mexican Institute for Competitiveness (IMCO) is a non-partisan, non-profit think tank that is focused on proposing solutions to Mexico's greatest challenges in a variety of industries. Its main objective is to propose viable public policies and actions to ensure Mexico's economic growth and development. IMCO publishes the International Competitiveness Index (ICI) on an annual basis to rank countries based on their competitiveness, taking into account factors such as public policies, governmental decisions, their political system, international relations, factor market, social indexes, economy, environment, innovation, among others.
In 2021, the IMCO conducted an evaluation of 43 countries based on the aforementioned factors. The most competitive country of all was Norway, followed by countries such as Denmark, Switzerland, and Sweden. Mexico finished in 37th position, below Turkey and above Brazil. The areas Mexico regressed in compared to last year’s evaluations are:
36th in Environment: Down one position
38th in Society: Down two positions
35th in Political System: Down two positions
20th in Factor Market: Up one position
27th in Economy: Up four positions
40th in International Relations: Down ten positions
30th in Innovation: Down one position
Moreover, the IMCO analyzed gaps in Mexican competitiveness in Health, Clean Energy, and Connectivity in detail.
Environment:
Caused in large part by the public policies of Mexican President Andrés Manuel López Obrador and his inclination towards empowering PEMEX and the Federal Electricity Commission (CFE) producing less electricity produced with non-polluting energies.
Social
The COVID-19 pandemic in Mexico has led to 3.74 million cases, 248,000 deaths, and overcrowded hospitals which have debilitated an already poor healthcare infrastructure. Most notably, Mexico’s federal government invested less than 1% of its GDP in its response to the pandemic and economic reactivation.
Political System
In the 2021 midterm elections, 90 political candidates were killed. As a result, there have been growing concerns as to the impact that organized crime groups have on the political stability and governability in certain regions of the country.
Innovation
The current administration has assigned the National Council for Science and Technology (CONACyT) a lower budget compared to what was assigned in each year of the previous administration. This decrease in funding has affected a variety of issues important to advancing innovation in Mexico, including student scholarships and grants, as well as R&D initiatives for strategic industries.
CONCLUSIONS
Mexico has a long road ahead towards improving its performance on health, the environment, crime, innovation, international relations, among others. However, the opportunities that Mexico presents for international businesses are vast. Its skilled workforce, competitive labor rates, international logistics connectivity, and growing internal market are strong advantages it has when compared to other investment destinations.
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