Second, growing social discontent may force the government to address the multitude of monopolies and duopolies operating in the country. Monopolistic business practices in Mexico have long elevated consumer prices in sectors such as telecoms, televi- sion, energy and food manufacturing, weighing on middle class growth and exacerbating income inequality. ...policy Making process: potential For improvement As Mexico continues its slow transition to a full-fledged liberal democracy, we see potential for a positive shift in the policy- making process. With three political parties � a relatively new phenomenon given that the centre-left Partido Revolucionario Democratico has only recently established itself as Mexico s third major political force � we believe it will continue to be difficult for any single party to gain a working majority in the legislature. This will necessitate a shift in how the parties interact with each other in order to pass legislation, from a more obstructionist relationship toward greater negotiation and comprise. ...While not our core -- Business Monitor International Ltd www mexico Q- ---- view, we cannot rule out a repeat in the coming years, potentially heightening social pressures, as well as make it harder for the central bank to utilise monetary policy to bolster growth. -- Business Monitor International Ltd www political outlook
...Homicide Rate, per ---,--- population (RHS) rial disputes with other drug cartels. Mexico s homicide rate jumped from - per ---,--- population in ---- to -- in ----. However, we believe that an escalation in violence to the levels seen in --------- after key arrests and killings of leaders of the Tijuana and Gulf cartels saw the homicide rate escalate sharply, is unlikely. Indeed, it is widely reported that El Chapo s close partner, Ismael Zambada Garcia, known as El Mayo , has already been largely in control of the operations of the Sinaloa cartel for several years, which reduces the likelihood of violent struggle for leadership within the organisation. Moreover, with El Mayo as the established replacement of El Chapo , other cartels will be more hesitant to battle for territory, which has been the main generator of violence across the country. ...We therefore expect smaller organised crime groups to remain a rising threat to the population and operations of business in the country over the coming years. Long-term political outlook strengthening, But challenges remain
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