Despite being a growing and dynamic economy, doing business in Mexico is tough.

Budding entrepreneurs must cut their way through thickets of paperwork, and it is hard to keep track of new and changing regulations. 

Hurts competitiveness

This hurts Mexican competitiveness and holds back economic growth and job  creation. It also diverts resources into the informal sector, or black market.  

Many potential businessmen give up or never start. It can also lead to high levels of graft and corruption as people try to get round the system.

But this is gradually changing, thanks to the efforts of local FCO staff based in Mexico City.  

Projects

Over the last year, Mexico and the UK have worked together on projects that have helped solve these problems, including collaborating with the Business Coordinating Council (CCE) - [Spanish site] - the voice of Mexican business.

It is the leading organisation of its kind and when CCE pronounces, the government – at both federal and state level – takes notice.

What FCO and CCE  were particularly keen to find out was the best way of measuring competitiveness which could then help to create the conditions that would encourage investment and give business room to grow and create jobs. 

Bureaucratic regulation

They surveyed local businessmen in 25 municipalities nationwide to find out what they thought of the local bureaucratic regulation they have to deal with. Unsurprisingly, they were very critical and want it greatly reduced.

Results of the survey were collated and states ranked in a league table.

It meant that the leading states with lighter regulation gained bragging rights in their competition for investment, and that the rest were spurred on to mend their ways.

Using the results, the government-run Federal Commission for Regulation Improvement worked with states to improve their local practices, particularly those involved in opening up and then operating a business. 

As a result, the state of Guerrero reduced the number days it takes to open a business from 70 to 41 days.

Ever-shifting

One smaller project has been trying to keep track of ever-shifting business regulation and then putting it into accessible manuals and regular newsletters aimed at making the process of setting up and running a business much easier.

FCO staff went back to school for the second scheme they have been sponsoring. Economics isn't taught in Mexican schools which makes many people feel that the economy is something alien and distant. This in turn means that fewer people want to get involved in business and trade as they don't understand what is going on.

So FCO collaborated with the Interactive Economy Museum in Mexico City - funded by the Bank of Mexico - to develop and introduce an economics diploma aimed at secondary school teachers and journalists.

Basic economic ideas

The course teaches them basic economic ideas, but also explores the different ways that they can pass on their knowledge to their students and readers. The first generation of 20 students graduated last year, and the diploma is now in its second, and final, year.

The diploma's success means that the Mexican Education Ministry might make it more widely available.

Read more about how our work supports the UK economy.