During a visit to Universidad del Valle de Mexico’s Campus Tlalpan, Jose Antonio Ardavín, the Director of the OECD for Latin America in Mexico, shared with students the results of a report titled "Getting it right: A strategic agenda for reforms in Mexico," which the Organization for Economic Cooperation and Development (OECD) issued in January.
The director of the OECD for Latin America in Mexico spoke of seven major challenges for Mexico, among which highlighted the urgent need for fiscal reform, strengthening labor reform and education reform efforts; factors that could generate 4% growth of GDP.
The first relates to tax reform, to increase revenues and simplify the system. This will strengthen the government’s ability to raise revenues locally, and to directly address inequalities in the system. He said that Mexico is the OECD country that collects the least in taxes and that without more funds the country cannot have a world class infrastructure, education, or health systems. "The first effort is to contribute more in a just and orderly fashion".
The second point Jose Antonio Ardavín raised was to get more and better social spending to address poverty, a high-priority challenge in Mexico. According to Ardavín, "Mexico is a country that has less income as a government, but it also has lower pension expense and social services", i.e., it does not have the income to support the greater social needs of its citizens.
The third challenge mentioned is the development of a flexible labor market that could reduce inequalities and help formalize the economy. He compared the situation of the people between the ages of 55 and 65 years old, of whom only 10% have a college education, while 23% of those between 25 and 34 years have a university education. "You have to bet on education, to have people ready and give companies incentives to hire people."
The fourth challenge, he said, refers to the creation of a cutting-edge and equitable education system, where equity goes hand in hand with quality, with teachers and schools of excellence, to improve participation rates in higher education.
"The education system is the best equalizer of society, but it requires efforts so that the urban schools have same quality as the rural institutions. What moves the modern economies of today is innovation; today we need people who are prepared and talented to innovate and create value for the country. Mexico can do with its enormous demographics, but it is far behind in all innovation indicators."
In terms of employment, the fifth challenge is labor reform, which was approved before the end of the presidency of Felipe Calderon. Ardavín said that 40 years ago when the country introduced its labor law, it limited the incentives for firms to hire, for example, women interested in working.
The sixth challenge is for institutions to promote (and not hinder) competition and legal certainty. "We cannot become a successful country if we continue with a high level of corruption in our laws and regulations and if we lack the institutions to make everyone equal before the law".
The seventh point is energy reform that allows lower costs through increased productivity, and modifying subsidies. "Mexico is the only OECD member country that subsidizes gasoline and energy, which is in general not a good measure. We spend almost 5 times more on the subsidies that we do on the "Opportunities" program.
The Universidad del Valle de Mexico, through the Institutional Division of Business and Social Sciences, has worked in the integral formation of young people with education programs based on the pillars identified by Unesco: learning to know, learning to be, learning to live together, learning to do and learning to change, coupled with guiding principles that connecting with institutions and agencies help us provide quality education.
This article has been translated into English to be shared on the Laureate International Universities website.