Democracy in Mexico has failed to dismantle the gigantic inheritors of crony capitalism that were born during seven decades of authoritarian rule. One or two big companies dominate almost every market in the country—from the paint industry to broadcasting and mobile telecommunications. Where privatization and market regulation does not benefit a well-connected entrepreneur, the state itself runs the monopoly—as in the energy sector through PEMEX or the CFE (Comisión Federal de Electricidad, or Federal Commission of Electricity).
It is estimated that in 30 percent of the economy, consumers pay prices that are, on average, 40 percent higher than those in competitive markets. This reality hits harder on people with low incomes. The limited number of suppliers of telephone and Internet services, as well as the barriers to entry for new players, increases prices by more than 30 percent. In the pharmaceutical sector, the impact on prices goes up to 40 percent. Prices for dairy products are estimated to be 18 percent higher than they would be with greater competition.
Consumers, small- and medium-size enterprises, and government authorities are trying to open access to these traditionally closed markets. Last year, Cristina Massa joined the fight against monopolies as the first female regulator to serve as commissioner of the Comisión Federal de Competencia (Federal Competition Commission—CFC). What she and her colleagues do in the foreseeable future will determine the competitiveness of Mexican economy.