Sunday, November 19, 2017
   
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Vallarta Business News

Mexico no longer risky business

Two articles about Mexico were featured in Canada's Globe and Mail.

On November 12, an article entitled "Mexico is no longer risky business" gave a positive side to the story regarding how Mexico a long ways to streamlining red tape for establishing a business in Mexico.

Mexico, still reeling from the effects of the recession and persistent negative headlines about drug violence, has received a gold star from the World Bank, showing there is a lot more to this country than gun battles and the occasional beheading. Worldwide, Mexico was ranked 35th of 183 countries, easily beating out Spain and Italy.

Mexico, a country of 110 million and Canada's third largest trading partner, won high marks for its launch of an online one-stop shop for initiating business registration, improved construction permitting and increased options for online payments of taxes.

It takes nine days to start a business in Mexico, compared with 120 in Brazil, and 141 in Venezuela. While Mexican firms spend 404 hours a year paying taxes, Brazilian companies spend 2,600 hours engaged in the same task. It takes four times the number of days to deal with construction permits in Brazil than in Mexico. To be sure, Mexico still faces many structural economic challenges, including the need to dismantle powerful interest groups and monopolies. But the country deserves credit for using technology to reform a once-cumbersome bureaucracy, and to make it easier to do business on the ground than almost anywhere else in the region.

And on the following day, another article:

The drug violence that has plagued Mexico since the country began its crackdown on cartels six years ago, and unsolved killings like that of Canadian businessman Daniel Dion, undoubtedly harm the country's efforts to attract visitors. What's remarkable – and welcome news – is that while a great deal of attention abroad is focused on the violence, Canadian tourists have a sophisticated understanding of the conditions in the country. According to Mexican government figures, the total number of Canadian tourist visits to Mexico in 2005 was 675,216. By 2009, the number had nearly doubled to 1,222,739. This year is on pace to shatter last year's record. What's more, in 2006, Canada contributed 8.8 per cent of the tourists visiting Mexico; in 2010, Canada – still the second most important market – represents 14.6 per cent while the United States fell from 62.9 per cent to 61 per cent of the total, no doubt a result of the faltering U.S. economy.

While the Canadian government has issued a travel advisory urging its nationals to "exercise a high degree of caution" when travelling to Mexico, tourists have been undeterred, recognizing that most of the violence is confined to a handful of states, particularly those bordering the United States. Indeed, if you look at the total number of Canadian visitors, on a per capita basis, more Canadians were killed in China and Thailand in 2007, than in Mexico, according to figures provided by Canada's Department of Foreign Affairs and International Trade.

Many Mexican states have murder rates at or below the rate in the U.S., and The Economist reported recently that, based on official government figures, "Yucatán, where tourists snorkel with whale sharks, sees fewer killings per person than Canada." Mexico does not only share a continent with Canada, it is a strong ally and trading partner in NAFTA. Canada has a tremendous investment in Mexico's success, and that success depends not only on Mexico's security, but on the strength of its economy. The country has come through the recession strongly. It provides the most welcoming environment for business in Latin America, as noted in this space Friday. But given the continuing importance of tourism to Mexico, with 8.2 per cent of its GDP coming from tourism (the third highest in the OECD, after Spain and Portugal), and with 6.7 per cent of its work force engaged in it, the level-headedness of the Canadian tourist is welcome.

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