Global News

This article first appeared in El Universal on August 30, 2021.

Corruption affects three out of every four companies in Mexico, which has become a matter of concern, according to the Center for Economic Studies of the Private Sector (CEESP).

In its weekly analysis, the organization considered that this problem has to do with poor regulation or excessive red tape because they are associated with inefficiencies in public institutions and cause delays in the attention of businesses and encourage corruption.

He pointed out that the main manifestations of this phenomenon are reflected in payments to speed up procedures and avoid fines or closures of establishments.

He added that delays in attention or excessive regulation encourage irregular payments or influence peddling to speed up procedures or formalities, which generates unnecessary costs and causes interest groups to appropriate activities that correspond to the State.

The CEESP considered it worrisome that the perception of more corruption is registered in cities with strong economic activity, such as Mexico City, Mexicali, Juarez, Chihuahua, Torreon, Saltillo, and San Luis Potosi.

The National Survey of Regulatory Quality and Governmental Impact on Companies, released last week by Inegi, showed a drop in the perception of acts of corruption among public servants, decreasing from 82.2% in 2016 to 71.5% in 2020.

The agency considered that although a reduction of the problem is shown, what is also observed is that almost three-quarters of those surveyed suffer from this situation.

“Although the authorities claim that there has been significant progress in the fight against corruption, the truth is that in Mexico there are still high levels of corruption in everyday life, which limits a good business environment, particularly for MSMEs (micro, small and medium enterprises), and inhibits investment,” he said.

For the business organization, it is necessary to attract private investment to the private sector, but for this, it is crucial to have an “efficient regulatory framework that streamlines procedures and avoids unnecessary costs for companies”.

“The positive relationship between a quality regulatory framework, not more regulation, and economic growth is clear. The higher the regulatory quality, the higher the growth,” said CEESP.