Pestle Analysis of Mexico

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scientific organizations and private companies in greater numbers. There has also been a spike in the number of young people in app development, particularly with Microsoft opening a technology center in Mexico City in 2011. However, lack of quality infrastructure and high cost of access mean the telecommunication sector growth is below par. The advantages on internet access are obvious, as Mexican companies with internet access have shown greater revenues and productivity.

Environmental: Mexico currently experiences a number of environmental problems. These include the shortage of clean drinking and air pollution in the urban settlements, and deforestation in rural Mexico. The government has often expressed seriousness in aiming to implement the environmental policy, particularly highlighted by the recent economic reforms being passed slower than the environmental policy. This can be further stressed by the fact that Mexico is a signatory to the Kyoto protocol. However, the implementation and enforcement of environmental standards is lacking with support for environmental NGOs rather weak. This could be attributed to a state of informality existing in the Mexican economy, leading to many companies not complying with regulations. (OECD, 2014)

Legal: Over the last five years, Mexico has slipped a few places down the rankings in terms of economic freedom. While economic freedom in Mexico is still well above world average, it is quite below regional average and the average of free economies. Current concerns include corruption, where Mexico lags behind the world average. This is owed largely to a narcotics culture prevalent in the country, because of inadequate rule of law. Corporate taxes are flat at 30%, with the average tariff rate at 2.2% (The Heritage Foundation, Wall Street Journal, 2016). Fiscal Freedom is barely at the world average, while the pace of reforms introduced is slower compared to emerging economies. While the government has introduced many energy and fiscal reforms, subsidies and inflation could be reduced further. Added to this, it takes quite a while to start up a business, with licensing taking close to three months. Lastly, despite enjoying trade, investment and financial freedom, Mexico needs to restructure the banking system to make it more accessible.