BlackRock Chairman and CEO Larry Fink explains why, if he were starting his career today, he would try his luck in Mexico (EWW).
A couple of weeks ago, I visited Mexico City—one of my favorite cities in the world. It’s a remarkable place, not least because of the food, the museums, and the culture, but also because of the incredible economic changes taking place in Mexico right now—both in the capital and all around the country.
Every time I visit, I think the same thing: if I were starting my career, especially if I lived in a nation where I couldn’t explore my full potential, I’d try my luck in Mexico. Why? Because Mexico is finally beginning to unlock its true potential as an economic powerhouse.
At the heart of this potential lies a sweeping set of reforms. These initiatives include significant changes to move more businesses out of the informal economy, lower the cost of borrowing and modernize the financial sector, educate and train Mexico’s young workforce, and reduce corruption. Perhaps the most important initiative, a key priority of President Enrique Peña Nieto, has been reforms to the energy sector.
For decades, Mexico’s energy sector has been a national monopoly. The policies now working their way through Mexico’s Congress will kill the monopoly and open development to foreign investment. It’s difficult to underestimate the importance of this reform. Mexico has huge energy reserves, but hasn’t had the ability to truly capitalize on them. The important thing to remember is that for all of Mexico’s problems, it is a functioning democracy, and the capital from energy investment will flow to other sectors of the economy far more effectively than in an autocratic oil state.
Market Realist – Read on to learn what sets Mexico (EWW) apart from other emerging markets and find out the caveats to Mexico’s potential. To learn about proposed energy reforms in Mexico, see Proposed energy reforms: Implications for investors in Mexico.