Why Mexico’s economy underperforms
Red tape, taxes and gangsters keep small firms small
RAMóN RUNS a successful business in Mexico City moulding plastics for blister packaging. When the pandemic dented demand he found a new opportunity in making facial visors. Despite his acumen, Ramón (not his real name) does not want to expand his business. At his factory there is no sign and no window advertising his wares. “I don’t want to grow because I will be worse off,” he says. Not only will his tax rates jump from 2% of profits to 30%, he says, but he will attract attention from both trade unions and organised crime, which will charge derecho de piso—extortion.
This article appeared in the The Americas section of the print edition under the headline “Can’t grow, won’t grow”
From the March 19th 2022 edition
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