México at risk
Mexico is considered an emerging market, ie, a country developing markets such as the Southeast Asian, the Latin American and European countries of the former communist block.
The main essential characteristics of the emerging markets are:
• Accelerated growth of its economy
• Risk / instability of the political and financial situation
The investment followed by consumption is one of the indicators of emerging markets, so it ́s analyzed constantly to find out the “country risk” in order to know the level of uncertainty of meeting their commitments.
Governments made its management through the “country risk”, so now we are a country in the eye of the hurricane, since the impacts not only affect the economic but also the social and political life of all society.
Expectations for Mexico in 2014 have three risks: a) Massive capital outflow, b) Unclear Secondary Laws in the reforms and c) An increase of violence in the country.
a) Massive capital outflow
The monetary tightening initiated by the U.S. Federal Reserve can produce an increase in the international interest rates, causing an uncontrolled outflow of capital in the country.
b) Unclear Secondary Laws in the reforms
Deriving of the structural reforms, mainly energy, the rules of the game can be difficult to interpret, meaning unclear rules, which inhibits invest- ment.
The deterioration is being experienced in various parts of the country, security can greatly affect the performance of the economy; this phenomenon occurs in specific regions and is not a widespread problem, but has a rather negative effect on economic growth of these entities, since the problem is with these statements because investment moves where there are more favorable conditions.
You can identify that combating insecu- rity is fruitless, while citizens do not trust the authorities, it is impossible to fight it when the authority does not know nearly 9 out of 10 offenses (87.8%) because citizens do not even make the complaint. But the authorities can ́t be blamed the citizens for this do not even make the complaint. But the authori- ties can ́t be blamed the citizens for this lack of civic culture when nearly two-thirds (61.9%) of the cases, are not presented for reasons linked to the authority.
Mexico as the tenth largest producer of oil and gas, is seeking to consolidate a place in the emerging market opening the possibility that foreign companies invest and par- ticipate in energy projects
with long-term effect.
Mexico is playing with the big ones to attract more investment, so that the picture you have for the coming months is a final for the adrenaline junkies: the collapsed economy, an increasing crime rate and impunity, and a citizenry that distrusts the authority.
Time will give us the clarity to see if the expectations set to close the 2014 with a policy to combat insecu- rity and clear rules through
the adoption of secondary legislation in the energy sector were achieved, thus achieving the compli- cated obstacle to over- come of finishing with an inflation close to 4.67%, an exchange rate of 13.40 pesos per dollar and the creation of thou- sands of new jobs.