The World Bank says “Privatize Mexico”

MEXICO CITY – The World Bank published a strong endorsement of some of the most controversial elements of President Vicente Fox proposals to raise
taxes and utility fees, but urged him to go further in privatizing state-run industries.The recommendations included in Tuesday’s report –
including privatizing government pension funds and oil refineries, and dissolving state housing programs – drew critical headlines in Mexican
newspapers Wednesday.

MEXICO CITY – The World Bank published a strong endorsement of some of the most controversial elements of President Vicente Fox proposals to raise
taxes and utility fees, but urged him to go further in privatizing state-run industries.The recommendations included in Tuesday’s report –
including privatizing government pension funds and oil refineries, and dissolving state housing programs – drew critical headlines in Mexican
newspapers Wednesday.

"The World Bank says privatize Mexico," read the top headline in the daily newspaper Milenio. "World Bank pressures to privatize
Pemex," the state oil monopoly, read the headline in Novedades newspaper.

Fox has long said he would like to privatize many of the remaining government businesses, but has pledged not to do so because such moves face
stiff opposition from the public.

The bank’s report, "Mexico: a Comprehensive Development Agenda for a New Era," was released at the World Bank’s Mexico City headquarters. It endorsed Fox’s effort to raise Mexico’s "dismal " tax collection rate,
currently about 10 percent of GDP, by eliminating sales-tax exemptions for food and medicine – a measure Fox has proposed but which faces fierce
opposition in Congress.

The report also urges Fox to eliminate exemptions in corporate and personal income tax, privatize oil refineries, replace the current government-managed
pension fund with private plans, and dissolve the Infonavit public housing program to help the private mortgage and building industries.

The World Bank acknowledged that "implementing these recommendations will
prove an overwhelming task for any government," but said Fox should pick
priority targets for changes.

Fox’s office had no immediate comment on the report.

Author:

News Service: AP

URL: http://www.eco.utexas.edu/faculty/Cleaver/chiapas95.html