This editorial by Luis Linares Zapata originally appeared in the May 20, 2026 edition of La Jornada, Mexico’s premier left wing daily newspaper. The views expressed in this article are the author’s own and do not necessarily reflect those ofMexico Solidarity Mediaor theMexico Solidarity Project*.*
The search for investment in Mexico during these turbulent times has become relentless and desperate. The various reasons for its actual stagnation repeatedly emerge as the backdrop to any meeting between businesspeople, external factors, and the official establishment. This is even more evident if academics are present at these or other meetings.
The arguments, then, once again revolve around similar or related reasons, only this time seasoned with touches of profound intelligence. And on every occasion, for decades now, a feeling of incompleteness or outright frustration lingers within each of these participants. The brilliance of the presentations matters little. That feeling of having left the essential issues for an elusive, unconvincing, and ultimately vague future always seeps through and flutters.
The central point of agreement, then, repeatedly boils down to trust, or the lack thereof. And there, all discussion and wisdom become bogged down, scattered, and ultimately solidified. It matters little whether this sentiment arises from public officials and their actions or from potential, apprehensive private investors. At most, a set of assumptions or operating rules is detailed to better guide entrepreneurial ventures. Such breakdowns, written in a straightforward manner, are generally appreciated.
A deficient tax system that does not raise more than 11-13 percent of GDP will hardly be able to meet the demands for sufficiently large or powerful investments capable of stimulating pent-up private resources.
Even more so if the aforementioned provisions have been fulfilled and observed by their authors. The established, almost historical, fact of the accumulated advantages that support the few investors adds little. Most of them are accustomed to receiving veritable freebies.
But, once again, fulfilling these (or other) demands in no way guarantees that the expected investment will begin to flow. The protracted neoliberal era confirms the lack of investment, both public and private.
Where, then, lies the original source of investment that attracts, guarantees, and compels the necessary growth? The kind of investment that can unleash sustained and increasing economic growth. Many will say it doesn’t depend on a single basic factor, but rather on the convergence of several simultaneous or successive ones. Perhaps it lies, as experience dictates, in the temporal priority of public investment. This investment acts as a trigger, a guide, and perhaps even an effective incentive. But meanwhile, plans and promises come and go, without addressing any underlying issues.
It is well known that public investment depends, to a large extent, on the funds held in the public treasury. A deficient tax system that does not raise more than 11-13 percent of GDP will hardly be able to meet the demands for sufficiently large or powerful investments capable of stimulating pent-up private resources.
In Mexico, decades have passed with fiscal difficulties and weaknesses, whether to fund essential basic obligations or to obtain surpluses for the future. Currently, and for the past seven years, these commitments, supported by a human resource base, have channeled enormous additional expenditures. These social expenditures, as things stand, do not leave robust surpluses to undertake diverse and ambitious projects.
The few available funds have been financed in various additional ways. Sometimes by resorting to semi-hidden trusts that have since been dissolved; or with savings from past extravagances, not to mention the abundant and well-known corruption, as malignant as it is present. It is also possible to resort to credit, but we all know how expensive and captivating this resource is. Mexico’s public debt has already reached levels where servicing it becomes unbearable given the available capacity to pay. Despite this, the debt-to-GDP ratio continues to rise steadily, and the gap with investment capacity is narrowing.
Reviewing the weak tax system—a long-standing problem in the country—is tantamount to acknowledging cowardice and caution in diverting attention from where it should be functioning with a more just approach. There is, undoubtedly, ample revenue that goes unused, and there is a reluctance to utilize it. Sometimes, certainly, this is due to administrative incompetence. In addition, there are factors of political expediency: choosing the path with the fewest obstacles and lowest costs is decisive and risk-averse.
The fact is undeniable. This country has always lagged behind almost everyone else, whether in its Latin American neighbours or when compared to national governments that publish their achievements in specific associations (like the OECD). There, Mexico proudly displays its short-sightedness and very little courage, skill, and vision. Then, in high-level meetings, it tries to modify its consequently meager investments, insufficient for economic growth that drives equitable development.
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Taxation & Investment
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Mexico’s prolonged neoliberal era confirms a public and private drought of investment in the context of a deficient tax system that doesn’t raise more than 11 to 13 percent of GDP.
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