Mexico: A global partner. by Embajada de México en Bélgica

MEXICO: A GLOBAL PARTNER March, 2015.

INDEX -

Basic Data 10 Facts About Mexico The Pact for Mexico Structural Reforms Structural Reforms: One by one, where are we now? o Energy Reform o Telecommunication Reform o Economic Competition Reform o Financial Reform o Tax Reform o Labor Reform o Education Reform o Criminal Procedure Reform o Appeal Law o Political-Electoral Reform o Transparency Mexico in Peace with Justice, Unity and Development Plan for the Development of Southern Mexico

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BASIC DATA

General information Country name: Mexico (conventional short form); United Mexican States or Estados Unidos Mexicanos (conventional long form). Total area: 1,964,380 km2 Land: 1’943,945 km2 Water: 20,430 km2 Rank among countries by land area: 14 Location: North America, bordering the Caribbean Sea and the Gulf of Mexico, between Belize and the United States and bordering the Pacific Ocean, between Guatemala and the United States. Population: 118.3 million inhabitants (2013) Capital: Mexico City or Mexico, Distrito Federal Language: Spanish Currency: Mexican Peso Religion: No state religion. 83% of the population is Roman Catholic. Government: Mexico is a federal republic. The President is the Chief of State and the Head of Government. The President is elected by popular vote for a single six-year term. The Legislative branch is a bicameral National Congress (Congreso de la Unión) that consists of the Senate (Cámara de Senadores) and the Chamber of Deputies (Cámara de Diputados). The Senate has 128 seats. The Chamber of Deputies has 500 seats. The Judicial branch’s highest court is the Supreme Court of Justice (Suprema Corte de Justicia de la Nación) and consists of11 justices. Human Development Index: 0.775 (61st. according to the global ranking) Life expectancy at birth: 74 years (males), 80 years (females) Literacy: 93.1% 2

Total fertility rate: 2.25 children born/woman Urban population: 78% Population density: 61.4 inhab/km2 Birth rate: 18.61 births/1,000 population Mortality rate: 4.94 deaths/1,000 population Population growth rate: 1.2% Mexicans abroad: In 2012, 12’178,173 Mexicans were living abroad, according to the Institute for Mexicans Abroad (Instituto de los Mexicanos en el Exterior), of which 99.4% was living in the United States. According to the Pew Research Center, in 2012, there were 33.7 million Hispanics of Mexican origin living in the United States. Such estimate included 11.4 million immigrants born in Mexico and 22.3 million Hispanics born in the United States who identified themselves as Hispanics of Mexican origin.

Economy Mexico is a free market economy in the trillion-dollar class. Internationally, it is considered a major manufacturer and oil producer. Mexico has free trade agreements with 45 countries. In 2012, Mexico formally joined the Trans-Pacific Partnership negotiations and in 2011 it formed the Pacific Alliance with Peru, Colombia and Chile, to be joined by Costa Rica shortly. President Enrique Peña Nieto has enacted an ambitious set of structural reforms (energy, telecommunications, fiscal, financial, education, competition, labor, political and electoral, among others) to benefit Mexico’s population at large and promote economic growth. GDP: US$1.17 trillion GDP – avg. real growth rate (2010-2013): 3.52% GDP – per capita PPP (2012): US$16,734 (PPP) Inflation rate: 4% Unemployment: 4.8% Current account balance: -US$14.18 billion Total exports (goods and services): US$370.8 billion Total imports (goods and services): US$380.5 billion Reserves of foreign currency and gold: US$180.2 billion Public debt: 35% of GDP Debt - external: US$287 billion Exchange rate (US dollar): 13.3 Mexican pesos per US dollar (February, 2014) 3

Exchange rate (Euro): 18.16 Mexican pesos per Euro (February, 2014) Competitiveness ranking according to â&#x20AC;&#x153;Doing Business 2014â&#x20AC;? (World Bank) based on 189 economies: 53rd.

10 FACTS ABOUT MEXICO TEN FACTS TO KEEP IN MIND 1. Mexico is a stable democracy with solid institutions. Mexico is a multiparty democracy. The country has held peaceful elections since 1934, allowing for government change every six years without coups, rebellions or any other interruptions of the constitutional order. Its institutional strength and political maturity have allowed Mexico to pass transforming reforms that push forward its modernization process. 2. Mexico is one of the largest economies in the world. Mexico’s GDP amounts to 1.2 trillion US dollars, making it Latin America’s second largest, 4thin the Americas and 14thin the world. Moreover, it has a large internal market, ranks11thin the world in terms of population (119 million inhabitants) and has a GDP per capita of more than 16,000US dollars at PPP. 3. Mexico’s economy is characterized by a solid macroeconomic stability. Macroeconomic stability derives from a low inflation rate (below 4%), low levels of public debt (35% of GDP),low interest rates (3.2% for 28-day treasury bill), a highly capitalized financial system with a new banking reform aimed at increasing lending, and one of the OECD’s lowest unemployment rates (5%). In sum, Mexico has healthy public finances, an autonomous monetary policy, a flexible exchange rate and a robust financial system. 4. Mexico is an open economy. Mexico is strongly committed to free trade, capital mobility and productive integration. Together with Germany and the United Kingdom, it is the G20’s most open economy. Mexico has 10 free trade agreements with 45 countries, including the United States and Canada, the European Union and Japan. Its products have preferential access to more than 1.1billion consumers around the world. Its trade with the United States amounts to 500 billion dollars (that means 1 million dollars is traded between both countries every minute). Mexico exports more than 280 billion dollars’ worth of goods and services to the US each year. This is 2.6 times as much as Brazil’s, Russia’s, India’s and South Africa’s exports added together;1.6 times as much as Latin America’s;2.6 times those of Germany; and 1.9 those of Japan. Moreover, we are currently taking part in the Trans-Pacific Partnership (TPP) negotiations. 5. Mexico has a young, talented and qualified labor force. In Mexico, the median age is 27, compared to30.3 in Brazil, 35.4 in China, 37.4 in the United States, and 45.9 in Japan. Thus, Mexico is a young country. We are equipped with the ideal demographics to support our economic growth, similar to what the US had30 years ago. Likewise, Mexicans increasingly have higher levels of education and specialization and the country as a whole enjoys the most significant development in human capital in Latin America. Each year, more than 100,000

engineers and technicians –significantly more than in Germany (74,371) or Brazil (59,506)–graduate from our higher education institutions and increase the country’s productivity and competitiveness. 6. Mexico is a leader in high-technology advanced manufactures. Mexico ranks among the top three exporting powers of the G20 in terms of mid-and high-level technology manufactures. It is also the strategic destination for the expansion of global industries, such as those of domestic appliances, aerospace and automotive. In fact, it is ranked as the first exporter of flat screens and refrigerators, the fifth exporter of computers and the eighth producer and fourth exporter of new vehicles in the world. 80% of Mexican exports are manufactures and only 20% are commodities, a clear distinction from other large Latin American countries. Mexico produces more manufactures than the rest of Latin America as a whole. Overall, its exports are worth more than those of the entire region. It is also the world’s 1stdestination for FDI in aerospace manufactures. 7. Mexico is a strategic location for global production and trade. Its avant-garde infrastructure for world trade and its strategic location, between North America and Latin America, and between the Atlantic and the Pacific, give Mexico direct access to the most dynamic markets in the world. 8. Mexico is a whole world within a single country. The richness of its territory provides Mexico with great advantages in terms of development. It is the 14thlargest country in the world, with vast water, biological, forest, mining and energy resources. On top of that, Mexico has a great historical and cultural heritage that strengthens its touristic attractiveness. 9. Mexico is a country committed to the rule of law. Mexico is facing decisively the challenge of insecurity. Even though between 2006and 2012 violence increased in some regions of the country and the number of homicides practically doubled (from 11,806 to 21,728), in 2013 homicides decreased by almost 20% to reach a nation-wide rate of 19murders/100,000 inhabitants. This compares favorably with the homicide rates of Brazil (21), Colombia (31) and Venezuela (45). Since 2013, thanks to a strategy based on crime prevention, more intelligence use against crime and inter-institutional coordination, Mexico is combating violence and crime effectively. 10. Mexico is undergoing a historical transformation. To eliminate barriers and break with past impediments that prevented the country to grow to its potential, during 2013 an ambitious agenda of complementary structural reforms was passed. In only one year, 10 structural reforms were approved in the following areas: the labor market, education, telecommunications, economic competition, the financial sector, fiscal policy, social security, the political and electoral framework, the fight against corruption and the energy sector. These reforms have been made possible by the Pact for Mexico, a political agreement reached between the Federal Government and the three main parties to promote 95 initiatives aimed at radically transforming and improving our country’s competitiveness. 6

THE PACT FOR MEXICO The Value of Agreements

As pointed out in the section â&#x20AC;&#x153;The Reformsâ&#x20AC;?, Mexico needed profound changes that would break the deadlock that kept Mexico immobile. Therefore, as from the first day, the Federal Government set out to not only manage the country but also to transform it. However, in order to achieve this objective, it first needed to build a large political consensus that would allow the creation of the parliamentary majorities required for the adoption of this reform agenda, which, given the polarization and political paralysis experienced in recent years, seemed an unattainable goal. In this context, the Pact for Mexico was created as a tool for facilitating constructive dialogue and reaching agreements between the Executive Branch and the main political forces represented in Congress. Its purpose was to find the coincidences that would allow the main political parties to join forces and share ideas about building a better country. For the first time in history, the major political forces signed a wide-ranging national agreement that did not arise from the need to deal with a situation and instead from the explicit desire to transform Mexico. By putting the interests of the nation above group interests, the National Action Party, the Democratic Revolution Party and the Institutional Revolutionary Party pledged to work together for the greater good of Mexico. These political actors thereby made a crucial contribution to lending stability and certainty to the direction Mexico would take. What began as a sign of political maturity was gradually transformed into concrete actions, initiatives and results. In order to prevent the right to dissent from hampering decision-making, the arguments and reasons for finding long-term solutions to the problems that affect all Mexicans were emphasized. The government always sought to achieve a consensus between the three main political parties. However, when this was not possible, as in the case of the tax and energy reforms, we chose to build a sufficient majority to approve the changes the country needed. As proof of the scope of these agreements, this reform agenda was passed without resorting to the faculty of preferential initiative of the Executive Branch and considering only the responsibility and commitment of the legislators belonging to the LXII Legislative Session of Congress. This historic agreement yielded 11 reforms covering such broad topics as labor relations, education, the financial system, telecommunications and broadcasting, economic competition, the energy industry, the political and electoral system, transparency, the law of injunctions, and public finance. The past few years made millions of Mexicans think that our country was doomed to choose between two alternatives: change by decree, which does not consult or respect the diversity of voices that express Mexicansâ&#x20AC;&#x2122; feelings and a sterile pluralism, whose only result was deadlock and strain.

The Pact for Mexico and the responsibility of the legislators and party leaders showed that our country possesses the ability to become profoundly changed in a peaceful, democratic way. This new experience has shown us the importance and immeasurable value of agreements in achieving a results-based democracy. Towards a new Mexico. The vision of a new Mexico inspired this reform project. For years, the low inertial growth of our economy and the gap between rights and the full exercise of the latter had led millions of Mexicans to believe that having a competitive, prosperous, just and democratic country was beyond our reach. During the past 20 months, the government has made every effort to prove the opposite. Through structural reforms, we radically changed our legal and institutional framework, removing the obstacles that had kept the country in a deadlock. Today we have taken a big step towards building a new Mexico. In a new, more competitive Mexico, there will be more formal, well-paid jobs. Mexicans will have a better standard of living and access to a broader array of products and services at better prices. Families will be able to do more with their income by not having to pay for services such as domestic long distance calls or cellular coverage outside their service area, in addition to the fact that their utility bills will be lower. Internet will be available in parks and public buildings, which will help increase productivity and raise the standard of education. A new, more competitive Mexico will have a greater supply of fuel, which in addition to ensuring the countryâ&#x20AC;&#x2122;s energy sovereignty, will facilitate its industrialization and increase public and private investment, thereby helping to create more jobs. Mexicans will live in a less polluted environment in which, among other things, the air will be purer. In this new Mexico, more workers will have access to housing credit and the IMSS, while those with lower incomes will pay lower quotas. Moreover, disabled persons will find jobs more easily. In the new Mexico, citizens will be able change their bank or credit accounts to the institution offering better interest rates without being penalized. Financing a productive project or starting a business will be easier, because we will support talent and harness peopleâ&#x20AC;&#x2122;s ingenuity. With a fair, transparent tax collection, the state will have more resources for providing a basic level of well-being for low-income families. In this vision of the country, the education received by our children and youth will be of a higher standard. Our students will acquire the skills and knowledge they need to succeed professionally and be more productive, but they will also be taught values to enable them to lead free and healthy lives. The education system will be more inclusive, as it will pay more attention to disabled, migrant and indigenous students. Schools have better facilities, more qualified teachers and elementary students will receive computers to support their education. There will be more full-time schools, where students will receive an integral education and in disadvantaged areas, they will receive good nutrition to boost their performance. All these conditions will be able to be corroborated by parents and society in general, since we will be able to participate in the design of education and decisions on the use of school resources for our children. 8

Justice will be more effective and transparent. In criminal proceedings, there will be a reduction in the number of discrepancies, research will be carried out with greater scientific rigor and many disputes will be resolved through agreements between the parties. Justice will not only seek to punish, but also to repair damage and protect victims. The administration of justice will be headed by an independent, professional institution. Many procedures will be carried out online and trials will be open. Moreover, citizens will have better tools to protect their fundamental rights from the excesses and omissions of public authorities. Last but not least, the new Mexico will comprise everyone. Men and women will have the same opportunities to compete for office at all levels, and citizens will be able to actively participate in the decisions of the country, from updating the syllabuses at our childrenâ&#x20AC;&#x2122;s schools to voting at all levels. In this new Mexico, the performance of public servants will always be available to the public. We will have mechanisms to ensure that opposing positions become consensuses, which will enable us to continue advancing and perfecting our democracy. Structural reforms were designed to reach this new Mexico, a new Mexico where all Mexicans will have the tools, skills and opportunities to build a success story.

STRUCTURAL REFORMS The Reasons for the Reforms. The president Enrique Peña Nieto defined the need for a package of structural reforms derived from a clear assessment of the situation in Mexico. Although we successfully transitioned to a full electoral democracy over the past three decades and our economy opened up to the world, creating competitive industries, such as the automotive and aerospace industries, during this same period, Mexico’s annual economic growth was only 2.4 percent , which prevented the creation of the opportunities and employment required to increase the well-being of Mexicans. This was largely due to the fact that in the past 30 years, increasing informality, among other factors, led to a drop in productivity of 0.7 percent. Moreover, our country lagged behind in the regulation of economic competition, which increased the consumer price of basic goods and reduced the population’s purchasing power. This low level of competition forced the poorest families to spend over 40 percent of their income in concentrated markets with high prices. Another obvious obstacle to boosting competitiveness has been telecommunications. Mexico had only 86 cellular phone lines per 100 inhabitants, as opposed to an average of 112 in countries such as Spain. Backwardness in fixed telephony was even greater, with only 17 lines per 100 Mexicans. Moreover, we were nearly at the bottom of the list of countries in the Organization for Economic Cooperation and Development (OECD) in broadband Internet coverage. Only 11.4 percent of Mexicans had this service on their mobile phones and 9.6 percent in their homes. Despite the existence of numerous programs focusing on promoting social development and the increased public spending for this sector, this has had virtually no effect on poverty reduction, since 46.2 percent of the population still lived in this condition. This means that millions of Mexicans were unable to exercise their fundamental rights, including the right to decent employment, housing and social security. Moreover, 10.4 percent of the population lived in extreme poverty. In terms of income distribution, in the last decade, Mexico was the second most unequal country in the OECD, after Chile. Government spending, the state’s main tool for promoting well-being and reducing inequality, was extremely limited in areas such as education, health and infrastructure, largely due to the low levels of revenue accounting for only 10 percent of GDP, below the average tax revenues of OECD countries, which is 34.5 percent and even the average for Latin America, which is 20.7 percent. Although our financial system was one of the soundest in the world, the amount of credit available for businesses and Mexican families remained scarce, costly and not very progressive. This hampered the creation and expansion of businesses and limited households’ consumption choices. Whereas the average financing for the private sector worldwide is 157.3 percent, and in Latin America it is 47.9 percent, in Mexico it was equivalent to just 29.1 percent of GDP. The energy sector in Mexico also faced major challenges. Although high international prices had maintained oil revenues, our crude oil production had fallen dramatically over the past 10 years, from 10

3.5 to 2.4 million barrels a day. Meanwhile, our dependence on foreign energy had steadily grown, since natural gas imports rose from three percent in 1997 to 30 percent today. In addition, Mexico was experiencing an unacceptable contradiction: although the Constitution recognizes a number of fundamental rights, they did not always form part of the population’s daily life. Many rights had not translated into practice. This was the case of education, since our children were not learning enough and displayed academic deficiencies. According to the Report on the Programme for International Student Assessment (PISA) 2012, 55 percent of Mexican students failed to achieve the basic level of math skills, while 41 percent could not read at the minimum level. Moreover, for every 100 children entering primary school, only 76 completed junior high school and 66 finished high school. Additionally, several schools were in poor physical condition and there were areas of the country where students suffered serious food shortages that hindered their learning. Despite teachers’ efforts, the mechanisms for entering or advancing in the teaching profession were not based on merit but rather on discretionary, nonteaching criteria. Although we had already taken the first step towards the implementation of an oral justice system, differing views on criminal procedures provided scope for impunity, while the duration and complexity of the processes reduced the possibility of achieving efficient, expeditious justice. Finally, despite the historic achievement of creating a guarantor, transparency and access to public information in the country were not homogeneous and their levels were still inadequate. It was obviously impossible to overcome these obstacles merely through more efficient administration. The change had to be radical. This ambitious reform agenda was therefore promoted to address the structural problems of the country.

The Reforms. As explained in the section on “The Reasons for the Reforms”, Mexico was in need of a radical change. The scope of the challenges we face required a major transformation, expressed in 11 structural reforms approved in the first 20 months of the current administration and during the transition period. The reforms pursued three main objectives: increase the productivity of our country to trigger growth and economic development in Mexico; strengthen and extend rights so that they become part of the everyday reality of Mexicans; and strengthen our democratic freedoms and regime, allowing us to transition from an electoral democracy to a democracy that provides concrete results. Six of the approved reforms respond to the first objective of raising Mexico’s productivity. Energy Reform introduces sweeping changes to the Mexican oil industry and the activities of the national grid to boost productivity and increase the quality of their services for the benefit of Mexican families. This will translate into an additional boost to economic growth in Mexico, greater availability 11

of oil, natural gas and their derivatives, as well as better quality public electricity, with broader coverage and more competitive prices. On the one hand, in regard to petroleum activities, the reform opens up the sector to competition to attract investments to expand the production of hydrocarbons in the country, while maintaining the country’s ownership of these resources. To achieve this, a flexible contract model was designed to enable Pemex and other companies to participate in oil and natural gas exploration and extraction. To enable it to compete successfully, Pemex was given a new governance structure, with technical and managerial autonomy and a less stringent tax scheme that will enable it to allocate more resources for its development while remaining a Mexican-owned company. On the other hand, the National Electric System has received an additional boost to allow the participation of more companies in power generation, which will expand the wholesale electricity market in order to reduce the cost of electricity, promote the transition to clean energy and extend the system’s coverage to areas that still lack this essential service. Since it is a strategic sector, planning the transmission and distribution network will remain in state hands, although the involvement of private companies in these activities through contracts is also allowed. Like Pemex, CFE will be modernized while continuing to be a Mexican-owned company. The Antitrust Reform updates legislation and strengthens the agency responsible for its implementation. The catalog of anti-competitive practices was expanded and sanctions stepped up to protect consumers’ rights. The aim of this reform is to promote a more competitive, transparent and fairer internal market that will allow families, especially those with lower incomes, to have more access to more quality products and services at lower prices. This will also translate into an increase in the competitiveness of micro, small and medium enterprises, since they will have access to cheaper inputs and large companies will be prevented from concentrating markets. Telecommunications and Broadcasting Reform strengthens Mexicans’ fundamental rights, while encouraging the development of these sectors. On the one hand, it expands freedom of expression and access to information, as well as the rights of telecommunications and broadcasting service users, since the state will ensure that quality services are provided in a context of plurality, competition and free access. This will be implemented through a policy of universal digital inclusion that seeks to increase Mexicans’ access to information and communication technologies, so that Mexico is fully integrated into the knowledge society. On the other hand, the reform promotes competition in all telecommunications services to provide users with more choices and better prices when hiring pay television, fixed and mobile telephony and high-speed Internet. This reform will also make it possible to attract investment in key sectors such as satellite communications and broadcasting, thereby encouraging the development of telecommunications throughout the country. Tax Reform involves a series of changes to Public Finances designed to increase the revenue available to the state to meet the population’s basic needs efficiently. This is achieved by progressively 12

increasing tax collection, in other words, by paying fairer taxes and allocating the resources obtained to strengthening social security and supporting families with lower incomes. The reform facilitates compliance with tax obligations, while promoting the incorporation of companies into the formal sector. It also offers additional incentives to entrepreneurs and small rural producers to enable them to consolidate their businesses. Tax Reform also helps combat obesity and improve air quality since it creates taxes to discourage the consumption of foods that are harmful to health and the environment. Financial Reform has two objectives: to provide more credit and cheaper credit. To this end, efforts are being made to foster competition in the financial sector to reduce the cost and increase the supply of credit, and improve the operation of financial institutions and regulatory bodies to increase the soundness and reliability of the financial system. The amendment removes the barriers that prevented users from freely choosing the company or financial services offering the best conditions and eliminates unfair penalties and contract terms. It also facilitates credit through the Development Bank to trigger growth in key productive sectors. To facilitate the achievement of these goals, users are given the necessary information on financial products and services to enable them to make better decisions and small and medium enterprises are offered assistance as regards innovation and patenting. In order to maintain a sound, sensible financial system, the reform updated the regulatory framework for activities in this sector and provided regulatory institutions with the tools for punishing and preventing the behaviors that threatened the stability of the financial system. Lastly, Labor Reform, discussed and passed during the government transition period with the support of Institutional Revolutionary Party legislators, is designed to encourage job creation and establish more humane working conditions for Mexicans. This reform will enable more youth, women and senior citizens to develop professionally by establishing new forms of labor market entry, such as probationary contracts and initial training. The practice of subcontracting or outsourcing will also be regulated to prevent abuse of this measure. The reform also provides greater protection for workers in the event of bullying and harassment, as well as in situations of pregnancy, breastfeeding, parenting and disability. It also strengthens the rights of domestic, farm and mining sector workers. Three of these sweeping reforms will help strengthen and expand our rights: Education Reform, the new Injunction Law and the issuance of a National Criminal Procedures Code. Education Reform guarantees the exercise of the rights of children and youth to a comprehensive, inclusive, quality education that will provide them with tools to successfully meet the challenges of a globalized, increasingly digital world. To achieve this goal, schools were placed at the center of education policy. On the basis of the premise that teachers are the backbone of any education system, a Professional Teaching Service was created to ensure that income, promotion, recognition and retention in teaching are based on merit and teacher performance replacing earlier opaque, discretionary methods. The fundamental task of 13

teaching will be performed by Mexicans with more vocation and capacity. A National Educational Assessment System was created to be used as a continuous improvement mechanism for the benefit of students rather than a means of punishment. This effort must be accompanied by the principles of equity and inclusion. Education reform incorporates a number of strategic programs designed to ensure that the most vulnerable Mexicans have full access to the benefits provided by the National Education System. These initiatives include the “Full Time Schools Program,” the “School Refurbishment Program – Decent Schools,” the “Programme for Inclusion and Equity in Education” and the “Education Reform Agenda,” which, on the basis of the information provided by the Census of Schools, Teachers and Students of Basic and Special Education will promote self-management of the school community and overcome infrastructure problems. The New Injunction Law updates and strengthens this instrument, which has historically been the most important constitutional control mechanism in our legal system and the most effective tool for citizens to defend their fundamental rights from government abuses and excesses. This reform expands the sphere of protection the injunction provides for citizens, which now includes human rights provided for in international treaties. It also enhances the effectiveness of the Mexican justice system to simplify and modernize procedures. An injunction may now be requested online using the Electronic Signature. Mexico is thereby advancing the construction of a modern justice system that will make the fundamental rights enshrined in our Constitution an everyday reality for all Mexicans. A National Criminal Procedures was also passed, which created a unified criminal justice model and ensures that all Mexicans will be judged with the same procedures, wherever they are in Mexico. This new code replaces the various procedural rules that existed in the country, reducing the margin for impunity, facilitating coordination between authorities and improving the efficiency of investigations. This new code includes the guarantee of the presumption of innocence in all criminal proceedings, emphasis on victim protection, reparation for damage, respect for human rights and the existence of alternative mechanisms through which parties may reach a peaceful, quick and effective solution, for ending a conflict without the need for sentencing. Lastly, the National Criminal Procedures Code facilitates the implementation of an adversarial system and oral trials in Mexico, a process which should be completed by 2016 at the latest. Lastly, two amendments were made to achieve the third objective of strengthening our democratic regime and freedoms: Political-Electoral Reform and Transparency Reform. Political-Electoral Reform consolidates a results-based democracy by promoting greater collaboration between the executive and the legislative branch, by providing greater certainty, fairness and transparency for elections and encouraging citizen participation. To achieve greater collaboration and agreements between the branches of government for the Mexicans, the reform envisages the possibility of forming a coalition government, and provides other 14

mechanisms for promoting shared responsibility between the executive and legislative branches, such as the ratification of cabinet members. The institution of the legislative election, present in the original wording of the 1917 Constitution, was recovered to enable citizens reward the performance of MPs and senators and make them accountable. Moreover, the reform provides autonomy for the institutions responsible for both the enforcement of justice and the assessment of the governmentâ&#x20AC;&#x2122;s social policy, ensuring their professionalism and independence. The reform also transforms the institutions and electoral rules governing democratic processes in Mexico, updating and perfecting them. Electoral authority is evolving and being strengthened, becoming the National Electoral Institute, with the capacity to organize elections in any state when the situation so warrants, which will standardize the quality of elections across the country. The reform ensures gender parity in nominating candidates for elected office, so that men and women will share the responsibility of transforming Mexico, and establishes mechanisms for citizens who choose to seek public office through an independent candidacy in order to compete on equal terms with candidates backed by political parties. Transparency Reform strengthens the right of access to public information by all Mexicans, facilitates the evaluation of the work of public servants by citizens and promotes accountability. This is achieved by providing the Federal Institute of Access to Information and Data Protection with greater powers, such as contesting unconstitutionality and providing constitutional autonomy. Furthermore, the bases are established for the creation of specialized autonomous bodies on this matter in each of the states, to consolidate a national system of transparency. This reform also provides all Mexicans with access to information on the three levels of government, political parties and all persons, including trade unions, using public money. This shows that transparency and accountability are principles that accompany every transformation undertaken in recent months. All these reforms complement each other and are based on a single strategy with specific targets. Overall, they provide a legal and institutional framework that will allow us to achieve a new, more competitive and productive Mexico, where rights are fully exercised and democracy and transparency are core values in our lives.

STRUCTURAL REFORMS: ONE BY ONE, WHERE ARE WE NOW? 1. Energy Reform.

Energy Reform is historic opportunity for Mexico to leverage its energy resources in a rational, sustainable way, based on the principles of national sovereignty, economic efficiency and social benefit. The efficient use of our natural resources will make it possible to harness the potential of the energy sector to generate greater well-being for the population. This will be achieved through the increased production of cleaner, cheaper energy, increased oil revenues, the creation of well-paid jobs and environmental protection. Energy Reform is designed to attract investment and modernize the energy sector in order to achieve the following: 

Support for the family economy by reducing the price of electricity, gas and food, and creating formal, well-paid quality jobs and better fuel supply services.

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Social development, by allocating oil revenues to bolster social spending, long-term savings and scholarship programs, the Universal Pension Scheme and productive and technological development projects, and to establish mechanisms to ensure that profits from the energy sector reach communities and foster regional development.

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Caring for the environment and ensuring worker protection and the well-being of the population, by encouraging power generation from renewable sources and clean technologies, to regulate the safety of hydrocarbon sector and make companies responsible for the well-being of communities.

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Increased transparency in the energy sector, to provide Mexicans with detailed information on the income obtained from the extraction of oil and natural gas, so that they can ensure they are being used to improve their quality of life and contribute to national development.

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The competitiveness of the country, enabling Mexican SMBs to spend less on energy and Pemex and the Federal Electricity Commission (CFE) to use their resources to modernize and incorporate state-of-the-art technology.

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The productive and industrial capacity of Mexico, by increasing the availability of lower-cost energy inputs produced in the country. Also, our energy exports will be strengthened our growing dependence on imported energy will be reduced. 16

With Energy Reform, Mexico will transition toward a dynamic energy model based on the principles of competition, openness, transparency, sustainability and long-term fiscal responsibility. We will have a more competitive and prosperous Mexico, which will provide the foundation for a new era of development and prosperity for the benefit of Mexican families.

Benefits 1. Promoting the economic and social development of all Mexicans. 2. Increasing transparency in the energy sector. 3. Protecting the environment, the population and workers. 4. Protecting Mexico’s energy industry and sovereignty. 5. Making the Mexican energy industry more competitive and efficient. 6. The energy sector will continue to support economic growth and development in Mexico.

Facts Energy Reform allows the participation and investments of more companies dedicated to exploration and extraction of natural gas, with which Pemex contemplates bolstering supplies to meet the fuel demands in our country. Natural gas will be used to generate electrical energy instead of the more expensive fuels that pollute, such as diesel or heavy oil. This is how we can produce cleaner, more affordable energy. With Energy Reform:   

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Mexico will have better natural gas management at more competitive prices. Electricity will cost less and electrical rates will decrease. The participation of private companies in power generation has been expanded. All generators, including the Federal Electricity Commission (CFE) will compete under equal conditions to offer power at the best prices. A National Energy Control Center was established as a public, independent arbiter that will administer the access to and distribution of electricity from all the generators in the electricity grid. This arbitrator guarantees that power will arrive at homes, small businesses and industries, and that it will be less expensive. Mechanisms were established so that the CFE can expand and modernize transmission and distribution lines either on its own or through contracts with private companies.

Progress Up to today the Energy Reform has given the following outcomes among others: -

2.0% reduction of the price of the electricity. 6.1% reduction of the price of electricity for domestic use, 14.1% reduction of the price of electricity for the industrial sector. 1032 kilometers of pipelines constructed and other 2549 kilometers under construction. The Federal Electricity Commission announced between 2014 and 2015, tenders for 11 projects to transport natural gas that have an investment of about 5,200 million of pesos. In total, the projects under construction on the Comprehensive Strategy with projects in tender announced by the CFE represents an increase of 54% of the national gas pipeline system. The CFE converted seven power plants that use fuel oil into natural gas so it can be also be used. These projects represent about 4,600 megawatts of installed capacity and an investment of approximately $ 200 million. The CFE and the private sector, promote the construction of 6 power plants using natural gas, with a total investment of 5,750 million of pesos and represent about 4,600 megawatts of installed capacity.

2. Telecommunications Reform.

Telecommunications allow us to communicate at a distance, via numerous services, through which we issue and receive signs, signals, writing, images, sounds and any kind of data using cables, fiber optics or the radio spectrum (the space through which wireless signals are transmitted) as channels of transmission. These services are commonly known as telephony, text messaging, Internet, Pay-TV or radio communication, provided by individuals or corporations, to which the government granted a license or authorization. Telecommunications have the power to impact countries â&#x20AC;&#x2DC;economic and social development, as they are a fundamental element in strengthening growth and productivity. They are also an essential element in the development of democracy and access to culture, education, health, and in general, the full exercise of human rights. Because of their importance, many countries are making efforts to expand their telecommunications infrastructure and increase the coverage and penetration levels of these services. Despite their positive impact, telecommunications and broadcasting in Mexico have been highly concentrated, which has affected users and the economy as a whole, resulting in low coverage, poor 18

quality and expensive services, which in turn, has limited the exercise of freedom of expression and the right to information of Mexicans, and economic, social and cultural development. Given this situation, it was decided to promote a structural change that would substantially increase competition in these sectors, thereby improving the well-being of Mexicans and the countryâ&#x20AC;&#x2122;s economic potential. This change was achieved through telecommunications reform, comprising six main axes: 1. Expansion of fundamental rights. Freedom of expression and access to information and the rights of telecommunications and broadcasting service users are extended. The right of access to information and communications technology, including broadband and the Internet is recognized. The reform stresses that telecommunications and broadcasting are public services of general interest, as a result of which the state will guarantee that they will be provided under conditions of competition, quality, diversity, universal coverage, networking, convergence, free access and continuity. 2. Updating the legal framework of the telecommunications sector. To strengthen legal certainty, a convergent law regulating the use of the radio spectrum, networks and telecommunications services and broadcasting was enacted. It establishes a single concession regime for the provision of such services; and implements asymmetric regulation measures with which the main economic agents in these sectors must comply. 3. Strengthening the institutional framework. The Federal Telecommunications Institute (IFT), as an autonomous, constitutional body responsible for the regulation, promotion and monitoring of the radio spectrum, networks and the provision of telecommunications and broadcasting services was created. It will serve as the authority for economic competition in these sectors. Courts specializing in these issues have been set up to provide certainty for investment. 4. Promoting competition. The reform is in favor of users and against monopolies. Therefore, effective competition, will be encouraged by providing tools to reduce the IFT concentration levels. Up to 100 percent foreign direct investment will be permitted in telecommunications and communication via satellite together with up to 49 percent in broadcasting. Broadcasters are required to allow free, non-discriminatory retransmission of their signals by pay television companies, and in turn, have the right to have their signals retransmitted free and in a nondiscriminatory manner by pay television companies. 5. Establishing a Universal Digital Inclusion Policy and a National Digital Strategy. The Federal Executive branch will be responsible for this policy, which will include infrastructure, accessibility, connectivity, information and communications technology and digital skills. The aim is for at least 70 percent of households and 85 percent of micro, small and medium businesses to have high-speed Internet at internationally competitive prices. 6. Encouraging greater infrastructure coverage. The fiber optic backbone of the Federal Electricity Commission will be expanded and reinforced and a wholesale mobile shared network will be deployed using the 700 MHz band, which will be able to harness the 19

backbone in order to have greater service coverage at lower prices to benefit more people. Telecommunications reform is designed to eliminate monopolistic practices that have yielded extraordinary profits for preponderant agents to the detriment of the well-being of Mexicans and the countryâ&#x20AC;&#x2122;s development. With more competition, Mexicoâ&#x20AC;&#x2122;s telecommunications sector will have higher coverage levels and better penetration, and better quality services at affordable prices, particularly among historically disadvantaged areas and sectors of the population.

Benefits 1. Expansion of Fundamental Rights. 2. Strengthening State leadership and new institutional framework. 3. Effective competition in the markets. 4. Elimination of entry barriers to boost competition. 5. Increased network coverage and supply of services for the population. 6. Promotion of domestic and foreign investment in telecommunications and broadcasting in Mexico. 7. More rights for telecommunications service users.

8. Rights for broadcasting service audiences. 9. Rights of users and audiences with disabilities. 10. Reduction of fixed and mobile telephony service costs, for the benefit of the usersâ&#x20AC;&#x2122; economy. 11. Certainty and equity in the transition to digital terrestrial television (DTT) 12. Internet access in schools, health centers and public buildings

Progress Up to today the Telecommunications Reform has given the following outcomes among others: -

New telecommunication companies are investing in Mexico. 2 millions of digital televisions given out to Mexican families under social programs. The fee for national long distance has been eliminated. Currently working on two telecommunications networks: fiber optic backbone and network sharing.

3. Economic Competition Reform.

The country’s economic growth, productivity and competitiveness have been hampered by the existence of restrictions on free competition, distortions of economic competition and the absence of measures to prevent monopolies and anti-competitive behaviors, consisting of monopolistic practices, illicit concentrations and barriers that decrease, damage, prevent or in any way condition free participation and economic competition. This is reflected in the World Economic Forum Global Competitiveness Report 2013 – 2014, which ranks Mexico 114th out of 148 countries as regards “Effectiveness of Antitrust Policy.” In this respect, anti-competitive behavior and undue concentrations cause excessive price increases, thereby reducing the consumption and saving capacity of families, particularly the most vulnerable ones. Moreover, by obstructing the participation of more and better companies in each market, it inhibits innovation. According to the Organization for Economic Cooperation and Development (OECD), Mexican consumers pay a premium of about 40 percent in markets where competition is low or nonexistent. In the case of the low-income population, the impact is greater, since this segment of the population spends about 42 percent more because their consumption takes place in highly concentrated markets. To address these obstacles, the Federal Executive Branch proposed a new Federal Antitrust Law implementing a new anti-trust system in the country, which seeks to create an internal market that is not only more competitive, but also more robust, and dynamic with more efficient economic processes, better technology, infrastructure and cheaper inputs so that people and businesses can make better use of their resources to generate wealth and be more productive. A context of fair competition will encourage participation by more operators as well as domestic and foreign investment. Anti-Trust Reform will result in a more open, fairer competitive environment that will increase the well-being of Mexicans, as well as generating more innovation and economic growth in all sectors of the economy. The reform will enable individuals and companies to conduct their business, productive or service provision activities in markets that are fairer, more competitive and transparent and efficient activities, which will translate into a wider range of products and services at lower prices. The reform establishes three strategic reforms: 1. A new institutional design that allows for more efficient and effective implementation of the public antitrust policy:

It creates the Federal Competition Commission (COFECE) as a Mexican state organization with the powers required for the fulfillment of its objective and establishes mechanisms that ensure the impartial independent, professional and technical behavior of its officials It establishes a division of labor scheme that ensures the operation of checks and balances, crucial to all modern democracies It clarifies the areas of responsibility between COFECE and the Federal Telecommunications Institute (IFT) It creates control, transparency and accountability mechanisms It creates an authority responsible research with technical and administrative autonomy It assigns an Internal Control authority to monitor the performance of COFECE officials.

2. Expansion of the list of possible antitrust behaviors carried out in markets, which must be inhibited, and where appropriate, sanctioned. -

Applicable to all the economic operators that participate in our economy, except those indicated in the Constitution It defines anticompetitive behaviors and prohibits monopolies, monopolistic practices illegal concentrations and barriers that decrease, damage or prevent free competition and economic competition in the production, processing, distribution or marketing of goods or services It takes up the concepts of the previous law that proved effective in terms of absolute monopolistic practices, monopolistic practices, the determination of the relevant market, substantial power and concentrations It includes two new types of monopolistic practices that punish abuse of an essential input by one or more economic agents with substantial market power.

3. An instrument with a better legislative technique that permits its correct implementation and application. -

It provides clarity, predictability, certainty, fairness, transparency and efficiency in its implementation It precisely defines the procedures for the substantive application of the law, protecting due process and the rights of all operators It strengthens the sanctioning powers of COFECE by allowing it to divest an appropriate proportion of assets as a last resort for dealing with anti-competitive practices.

The new Federal Anti-trust Law enables all companies, particularly small and medium entrepreneurs, to enter markets to deliver innovative solutions and more competitive prices, creating jobs and improving Mexicansâ&#x20AC;&#x2122; purchasing power. In the new, more competitive Mexico, talent and innovation will make the difference.

Benefits 1. Protecting Mexicans’ rights to increase their purchasing power. 2. Control monopolies and uncompetitive behavior more effectively. 3. Increasing the competiveness and dynamism of markets, to benefit SMEs and entrepreneurs. 4. The Federal Antitrust Commission of (COFECE) will operate with accountability and transparency. 5. Making Mexico more attractive to investors.

4. Financial Reform.

Financial Reform is an opportunity for the financial sector to contribute more to the country’s economic growth and grant more credit to Mexican businesses and families. Although Mexico has one of the world’s soundest financial and banking systems, it is also among those that loan least, registering a penetration level of credit to the private sector as a share of GDP of only 28%, well below the Organization for Economic Cooperation and Development (OECD) average of 157%. This reform will also encourage the development of the Mexican financial system to focus on: -

Providing more people with access to financial products and services. Reducing the cost of credit. Strengthening financial education and the protection of financial service users. Maintaining a solid financial sector. Making financial institutions, as well as the authorities’ actions, more effective.

Financial Reform is based on four strategic pillars: -

Promoting competition in the financial sector. It includes measures that drive greater competition and transparency throughout the financial system by preventing anticompetitive practices such as tied sales, and providing more options for financial service users, which will encourage the expansion of the supply of credit at better prices. Boosting credit through Development Banking. Financial Reform strengthened the mandate of Development Banking, regarding it a priority for providing access to credit and offering 23

technical assistance and training to promote economic development. Special emphasis will be placed on priority areas for national development, such as: infrastructure development, support for small and medium enterprises and small rural producers, as well as innovation and patenting, and in general all those areas not served by private banks, promoting environmental sustainability, the gender perspective, the financial inclusion of children and youth, and social banking functions. Expand credit in private institutions.- Financial Reform includes various actions to accelerate and boost credit growth such as: strengthening the system of granting and enforcing guarantees and bankruptcy in order to provide greater legal certainty for lenders; and the periodic evaluation of the performance of commercial banks in connection with the credit levels they effectively provide. Maintain a sound, sensible financial system. Strengthen the prudential measures of the financial system, including better coordination mechanisms between the authorities regarding stability. A specific scheme has been set up for dealing with insolvent banks.

Moreover, the reform incorporates various measures to achieve greater efficiency in the operation of the entities comprising the financial system by updating the legislation governing the operation of investment funds, the stock market and financial groups. It also incorporates improvements in the schemes that allow the authorities to operate effectively, such as the sanctions regime and the establishment of overarching coordinating bodies. Financial Reform establishes a legal framework that promotes competition, stability and the healthy development of the sector, which will expand and improve credit options for Mexicans.

Benefits 1. Providing more credit for people and companies. 2. Fostering equality in the relationship between financial bodies and clients. 3. Enabling financial service users to move their mortgage credit or bank account to another institution. 4. Prohibiting banks from obliging their clients to contract products or services. 5. Promoting competition to lower the cost of credit and reduce commissions. 6. Individuals and companies will have more information for comparing the performance of financial institutions and the products they offer, and will be able to choose what suits them best. 7. Ensuring the solidity and stability of the financial sector. 8. Improving the performance of financial institutions and authorities.

Progress Up to today the Financial Reform has given the following outcomes among others: -

Financer for Agricultural Development, Rural Forestry and Fisheries gives more credit, cheaper and with preferential rates to women. In 2014, micro, small and medium enterprises had more access to credit. It launched the Bureau of Financial Institutions. The Mexican Stock Exchange joined the Integrated Latin American Market.

5. Tax Reform

The Mexican government has had a limited capacity to meet the priority needs of the population, reduce inequality in income distribution and invest in strategic areas to trigger higher economic growth. The country also lacks a social security network that effectively guarantees a minimum standard of well-being for all Mexicans. This situation has largely been due to an inequitable tax system that obtained a low level of public revenue. Tax collection levels are equivalent to approximately10 percent of Gross Domestic Product (GDP), whereas Latin American countries collect 16 percent of GDP, in other words, 6 percent more than Mexico. Due to these low collection levels, public expenditure as a percentage of GDP is only 19 percent, compared with an average of 27 percent in the rest of Latin America. At the same time, informality has limited the potential of Mexican companies and workers, since it restricts their access to credit, social security coverage, training and technology. The Tax Reform, enacted by the Federal Executive branch, seeks to solve these problems through the following strategic objectives: -

Increase tax collection and ensure that it is fair. The reform seeks to reduce the high levels of inequality among Mexicans by eliminating privileges and ensuring that those with higher incomes pay more taxes and protecting those with least. Increase public spending responsibly and fairly. The funds obtained will address the priority needs of the population in areas such as education, health, social security and infrastructure. Reduce informality and tax evasion, through formalization mechanisms available to everyone and new rules and incentives, and penalties for those who evade their obligations. Include control mechanisms to ensure transparency and make public spending more efficient, and promote accountability.

Boost the economy by encouraging investment and employment. A policy of promoting economic growth is being promoted to complement the Reform, through the use of countercyclical spending. Create tax with social responsibility to protect the health of the population and the environment. Simplify tax payment through the elimination of tariffs and the use of new technologies to facilitate tax compliance.

With all these actions, Tax Reform represents a decisive step towards a new, fairer Mexico.

Benefits 1. All Mexicans will contribute, but the highest earners will contribute the most. 2. Using the income to benefit citizens and Mexico. 3. Increasing the contributor base and reducing informality. 4. Combating tax evasion. 5. Simplifying tax payments, to benefit businesses and persons. 6. Promoting health care and environmental protection. 7. Executing expenditure more efficiently and transparently. 8. Favoring investment and employment. 9. An inclusive Treasury Reform.

6. Labor Reform

The labor reform responds to the demands of workers and employers, as well as a society concerned with creating more jobs and more humane working conditions; particularly to enable young people, women and older adults to join the work force. -

It guarantees more rights for vulnerable groups; It grants greater powers to the labor authorities to provide greater protection and security for workers and the workplaces themselves, and even imposes exemplary sanctions for noncompliance with work regulations; 26

It contributes to achieving a prompt, expeditious administration of justice, to provide the boards of conciliation and arbitration with more and better tools; It brings labor standards into line with the decisions of the Supreme Court of Justice, and It implements the commitments embodied in various international instruments, Mexico has signed regarding the workplace.

The most important changes introduced include the following: -

The concept of decent work was incorporated. New forms of contracts are established: probationary and training, which facilitate access to the labor market by making it more flexible. Subcontracting or outsourcing will also be regulated to prevent abuse of this measure. The calculation of overdue wages for unfair dismissal has been modified. 100 percent will only be paid for the first year, after which 2% compounded capital interest will be incurred. The National Productivity Committee has been created as an advisory body to the federal executive branch on this important matter. The figure of the â&#x20AC;&#x153;blind promotion ladder,â&#x20AC;? according to which the most senior rather than the most skilled worker and/or productive worker filled vacant posts, has been eliminated. The exclusion clause due to separation from collective labor contracts has been eliminated to prevent a worker who resigns from a union from losing his job as a result has been eliminated. Free, secret voting in elections of trade union leaders has been established together with the right of unionized workers to demand information and accountability. Information related to trade union and collective bargaining agreements is regarded as public. Labor authorities are entitled to restrict access to a workplace in the event of imminent danger. Penalties for non-compliance with labor standards have been increased. The protection of substantive equality between men and women workers has been established. Better protection has been provided for workers in various aspects and situations such as the following: bullying and harassment, pregnancy, breastfeeding, parenting, disability and activities such as child labor, domestic, farm and coal mine workers. Child labor outside the family circle has been classified as a crime. Professional career service on the boards of conciliation and arbitration has been established, procedures has been streamlined and a new, most expeditious procedure for social security trials has been created.

Benefits 1. Work will be performed in decent conditions and workers will be better protected. 2. People will have better opportunities for employment. 3. People will be protected from abuse and fraud while performing your job. 4. There will be new criteria to fill vacancies and achieve promotion. 27

5. You will not be able to be fired for belonging to a trade union. 6. You will have a greater share in electing your union leaders and be given the tools to hold them accountable. 7. You will have simple access to information relating to trade union records and collective bargaining agreements. 8. Your life, health and integrity will be protected in the workplace. 9. Employers who violate workersâ&#x20AC;&#x2122; rights will be punished. 10. Women will have better job opportunities. 11. Women and other vulnerable groups will have new rights. 12. The rights of children will be protected. 13. Conflicts will be resolved in less time.

Progress Up to today the Financial Reform has given the following outcomes among others: -

In 2014, 714 000 new jobs were generated in Mexico. Serious occupational accidents have been halved. 196,000 new workplaces. 26,000 disabled people have found jobs

7. Education Reform

According to the latest international surveys (PISA 2012), 55 percent of Mexican students do not possess a basic level of math skills, while 41 percent have failed to acquire this level in reading comprehension. The gaps identified in PISA are also severe in the area of science. Moreover, the lack of space and time for sports and arts activities, as well as for language learning and information technology and communication, reduces the development opportunities for our students. This is

compounded by the poor physical condition of a large number of schools and the food shortages faced by students from the poorest areas of the country. The Federal Executive branch enacted Education Reform in the awareness that improving the quality of education requires a comprehensive educational policy offering specific long-term solutions to underlying problems. The reform seeks to place schools at the center of the education system to transform the relationship between administrators, teachers, students, parents and society in general. Strengthening schools is essential to ensuring student learning and promoting teachersâ&#x20AC;&#x2122; professional development. Education reform has three objectives: -

Respond to social demands to improve the quality of elementary and high school education. To this end, it will work on the professionalization of teaching, the establishment of minimum standards for the operation of schools, the improvement of syllabuses and curricula, strengthening programs designed to improve facilities, the use of information and communications technology, as well as periodic evaluations of all the components of the education system. Reduce unequal access to education by strengthening programs that provide assistance to schools located in areas with high levels of marginalization, as well as students with special educational needs. Involve parents and Mexican society as a whole in transforming education through participation in councils at the national, state and municipal level and at schools, and organize consultation forums on planning the education system and regional educational needs.

Education reform is the way to ensure compulsory quality education available to all children and youth in the country. Free, secular and inclusive education will advance the reduction of the backlog and provide students with a comprehensive education, for social harmony and personal and social development, as well as the tools to compete in a globalized world that uses knowledge and technology. With the participation of the authorities, parents, education experts, civil society and above all, teachers, Mexico will consolidate school performance as a means to a better future in a fairer and more competitive Mexico. We invite you to browse through this website to find out all about the reform.

Benefits 1. Providing students with an integral education. 2. The most highly qualified teachers will receive support to improve their teaching performance, and their merit will be recognized. 3. Supplying educational facilities with better facilities and modern technology. 4. Providing additional attention for students from vulnerable groups, to promote equality.

5. Parents will be allowed to participate actively in schools' decisions. 6. Enabling all Mexicans to participate in improving education. 7. Reporting regularly on the progress of the education system.

Progress Up to today the Financial Reform has given the following outcomes among others: -

Decent schools program has benefited nearly 11,000 schools, with a budget of 8 billion pesos in two years. The full-time schools increased from 6000 to 23,000 in two years. Half offer free food. Installation of 200 000 school boards in the schools of the country and creation of the National Council of Social Participation. Delivery of 8.5 million free textbooks and materials of new generation, with a catalog of books of 400 titles in 68 language variants.

8. Criminal Procedure Reform

It is an adjectival legal system, which regulates the oral adversarial criminal process for federal and common law crimes throughout the country. It includes the general principles of the process and its stages, as well as auxiliary, innovative figures in trials, such as alternative mechanisms, early forms of terminating the trial, precautionary measures and special procedures. Prior to the issue of the CNPP, there were 34 different criminal procedure codes, 32 local, the federal and the military. This diversity of criminal procedural rules prevented the existence of a unified criminal justice model. Different procedural rules for resolving the same event could lead to conflicting results. In fact, some states established rules within criminal proceedings, which contradicted the rules established by a neighboring state and even those stipulated by the Federation. Our system of justice therefore required an effort to transition towards a model shared by the states and the Federation to facilitate coordination between the authorities, increase the effectiveness of investigations at the federal and local levels, provide greater legal certainty regarding the decisions of judges and courts and therefore prevent the diversity of rules from creating scope for impunity. Following the issuance of the National Criminal Procedure Code, a single criminal procedure model was created for nationwide application. Furthermore, this is a code which includes in its provisions the new system of oral adversarial criminal justice, whose implementation, according to the 30

Constitution, should be completed no later than June 18, 2016. Having a single set of rules for the whole country will advance the process of regulatory homologation, facilitate training and enable the generation of coordination schemes between the authorities to implement the new criminal justice system.

Benefits 1. Presumption of innocence. 2. A more active role for the victim or offended party. 3. Presence of a judge. 4. Improved investigations. 5. Identically laws for all Mexicans. 6. Rapid solutions to criminal controversy. 7. Reduction in impunity.

9. Appeal Law

Historically the injunction has been the most important instrument for ensuring constitutionality in our legal system. Nowadays, it is one of the means available to citizens to challenge the constitutionality of the actions of all state authorities. At the same time, it is the most effective mechanism they have to prevent or correct abuses of public power or mistakes that injure or violate their fundamental rights enshrined in the Constitution. April 2, 2013 saw the publication of the Decree establishing the new Injunction Law, which regulates Articles 103 and 107 of the Constitution, together with amendments to various bye-laws. This reform was enacted to expand the protection provided for citizensâ&#x20AC;&#x2122; rights, in order to make the administration of justice more expeditious and effective; simplify and modernize the legal process, and strengthen the Judicial Branch of the Federation. The Injunction Law Reform has three main axes: First. It expands the sphere of the protection of rights.

Human rights provided for in international treaties will receive direct protection. The verdict of unconstitutionality of a rule repeatedly issued by the Supreme Court is regarded as having general effects, means that the rights of all people are protected even if they have not filed an injunction. The status of aggrieved party is awarded to a person who has a legitimate although not necessarily legal interest. No suspensions of the contested act will be provided that causes more harm than benefit to the plaintiff.

Second. The effectiveness of Mexican justice is increased. -

The sentence of “all injunctions for effects” will be precisely indicated in the terms in which it must be satisfied. Filing for an injunction may now be done online using the Electronic Signature.

Third. It strengthens the Judicial Power of the Federation, particularly the Supreme Court of Justice. -

“Full Circuits” are created, so that the thesis contradictions within a circuit are resolved through plenary sessions. To ensure due compliance of injunction sentences, the sanction scheme is strengthened. The Supreme Court of Justice of the Nation is empowered to remove from office and report to the District Judge, both the authority responsible and his immediate superior if he fails to comply with an injunction sentence.

This contributes to making the right to justice established in our Constitution an everyday reality for all Mexicans.

Benefits 1. The new Injunction Law expands the protection of human rights considered in international treaties 2. All Mexicans will benefit when, after an injunction proceeding, a law is declared unconstitutional. 3. “Legitimate interest” creates more possibilities for self-defense. 4. Collective interests may be protected by injunctions. 5. The authority’s failure to fulfill an obligation is also grounds for an injunction proceeding. 6. If public interest might be harmed the authority’s actions will not be suspended. 7. An injunction may be filed electronically. 8. Public servants must adequately fulfill the sentence imposed by the injunction.

9. The Federal Executive and Legislative Branches may request a priority conflict resolution from the Supreme Court of Justice.

10. Political-Electoral Reform

Mexicans live in an electoral democracy where the right to universal suffrage is fully exercised. However, transitioning to a results-based democracy required updating and improving the countryâ&#x20AC;&#x2122;s political regime and its rules and electoral institutions. Therefore, on February 10, 2014, the Official Gazette published the Political-Electoral Constitutional Reform. In keeping with this amendment, on May 23, the Official Gazette published the decrees issuing the general laws of electoral offenses, Electoral Institutions and Procedures, and Political Parties, and amendments to the General Law on the System of Challenging Electoral Matters, the Organic Law of the Judicial Branch of the Federation and the Federal Law of Administrative Responsibilities of Public Servants. Political-Electoral Reform changes the relationship between the branches of government and between the latter and citizens in two main ways: -

Institutions belonging to the political system were modernized to promote a better balance between the branches of government, facilitate dialogue and agreements and consolidate a results-based democracy. Institutions and electoral competition rules are transformed to strengthen citizen participation and provide greater certainty for the polls, both nationally and locally.

This is achieved through the following changes: Amendments to the political regime a. The president is empowered to form a coalition government with any of the political parties represented in Congress. This recognizes the need to create better means of collaboration between the executive and legislative branches to provide the necessary agreements for transforming the country. b. In order to strengthen the balance between the federal executive and legislative branches, the reform provides that in the event of a coalition government, the Senate will ratify all secretaries of state, with the exception of the Secretaries of National Defense and the Navy. When a coalition government is not chosen, the Senate will ratify the head of the Secretariat

of Foreign Affairs while the House of Representatives will ratify the Secretary of Finance and Public Credit. c. In order to promote joint responsibility among the branches of government, the Chamber of Deputies will ratify the National Development Plan and the Senate will ratify the National Public Security Strategy. d. Citizens may re-elect representatives and senators elected in the 2018 polls for up to four consecutive terms for deputies and two consecutive terms for senators; the maximum number of years in each of these posts is 12 years. This will allow greater accountability and help professionalize and improve parliamentary work. e. Constitutional autonomy is granted to two institutions, the Attorney General’s Office, which replace the Attorney General’s Office and the National Council for the Evaluation of Social Development Policy, which is no longer part of the Secretariat of Social Development. f. To make government transition more efficient, the start of the president’s administration will be put forward to October 1 as of 2024. Amendments to electoral rules and institutions a. The National Electoral Institute, which assumes the functions of the Federal Electoral Institute (IFE) and strengthens the electoral authority, has been created. The INE will be able to organize elections in any state when the situation so warrants, guaranteeing the quality of elections across the country. It will also have a new National Control System, which will contribute to the transparency of elections. b. To ensure a fair result, elections will not be declared void if any candidate exceeds campaign caps by five percent or more of the total amount authorized, purchases information coverage or radio or television air time or receives money from illicit sources. c. Citizen participation is boosted by: i. Ensuring gender equality in elections, by obliging parties to give 50% of their legislators’ candidacies to women. ii. Strengthening independent candidacies, to ensure that citizens running for popularly elected posts by this means obtain public resources and airspace; iii. Facilitating the exercise of voting rights of Mexicans living abroad; iv. Guaranteeing the right of indigenous peoples and communities to elect representatives to town halls and to the exercise of their internal forms of governance.

Political-Electoral Reform modernizes our rules and electoral institutions to standardize the quality of democracy throughout the country. It also boosts state capacity to reach agreements on the most important decisions, consolidating a results-based democracy for Mexicans.

Benefits 1. Strengthening the protection of Mexicoâ&#x20AC;&#x2122;s citizen vote. 2. Citizens will be able to reward or penalize their representatives, based on their performance. 3. Citizens will be able to compete to hold elected office without being proposed by a political party. 4. Women and men will have the same opportunities to compete for elected posts. 5. Reinforcing the electoral rights of indigenous populations. 6. Citizensâ&#x20AC;&#x2122; votes will be increasingly informed and free. 7. Mexicans, including those living abroad, will be able to exert their political rights. 8. More collaboration and joint responsibility between the branches of government, facilitating agreements to benefit citizens. 9. Greater transparency in political parties. 10. Guaranteeing a clean and fair elections result. 11. Enabling citizens to grant or deny rewards to political parties, based on their performance. 12. The administration of Justice in Mexico will be autonomous. 13. An independent, professional and impartial assessment of the governmentâ&#x20AC;&#x2122;s social policies.

11. Transparency

A results-based democracy demands levels of transparency and accountability to the public by all civil servants. With information and accountability, citizens will be in a better position to assess their leaders and representatives. Moreover, a well-informed society will always be more participative and better equipped to contribute to decision-making in public affairs. Transparency Reform renews and strengthens the access mechanisms to public information and personal data protection that exist in our country. This reform, published on February 7, 2014, contains three main areas: I. Strengthening the right of access to public information. a. The Reform expands the list of individuals obliged to provide transparent information. b. Citizens will now be able to access the information available to political parties and trade unions, as well as autonomous bodies, trusts, and the Executive, Legislative and Judicial branches of the three levels of government. II. Consolidation of a national system of transparency. a. The reform strengthens the Federal Institute for Access to Information and Data Protection (IFAI), the agency that guarantees transparency by granting it constitutional autonomy and ensuring that its decisions are final and incontestable. b. Likewise, the reform also provides the basis for the creation of autonomous local bodies in 31 Mexican states and the Federal District. III. Establishment of new powers for IFAI. As the agency guaranteeing the right to transparency and access to public information, IFAI may bring an action challenging the constitutionality of the laws violating these rights. It will now be able to review the decisions made by local agencies and demand an appeal at the local level when warranted. This reform recognizes the importance of access to information as a fundamental right for the full exercise of democratic citizenship. Transparency will thereby accompany and reinforce the transformation to a new, more democratic Mexico.

Benefits 1. Strengthening accountability. 2. Ensuring transparency in public activity. 3. Elimination of obstacles and delays in citizensâ&#x20AC;&#x2122; reception of information. 4. Extending the protection of personal data and the right of access to public information. 5. The transparency system will be closer to citizens by also guaranteeing public information access at the local level. 6. Establishing shorter deadlines and simpler procedures to exercise the right of access to information.

MEXICO IN PEACE WITH JUSTICE, UNITY AND DEVELOPMENT

On Thursday 27 November 2014, President Enrique Pe単a Nieto gave a speech to the nation: for a Mexico in Peace with Justice, Unity and Development. He announced measures to strengthen the rule of law in Mexico. We offer to you the highlights of this message and 10 measures will be implemented to strengthen institutional capacities for public safety and enforcement and administration of justice.

1. Law against Infiltration of Organized Crime into the Municipal Authorities. 2. Redefining the system of jurisdiction in criminal matters. 3. Creation of a Unique State Police. 4. Creation of a single emergency telephone nationwide. 5. Unique Key Identity. 6. Special Operations for security and order. 7. Human Right to Justice. 8. Strengthening the instruments to protect human rights. 9. Fighting Corruption. 10. Open Government, promoting transparency, accountability, citizen participation and innovation.

PLAN FOR THE DEVELOPMENT OF SOUTHERN MEXICO: GUERRERO, OAXACA AND CHIAPAS 1. Establishment of three Special Economic Zones for the comprehensive and immediate development to create well-paying formal jobs. FIRST: Industrial Interoceanic Corridor, which connects the Pacific with the Gulf of Mexico. SECOND: Puerto Chiapas THIRD: The adjacent municipalities to the Port of Lazaro Cardenas, both in Michoacรกn and Guerrero. -

Modern infrastructure. Safety conditions. Preferential financing of development banks. Additional facilities for foreign trade. Tax and contributions breaks to IMSS and INFONAVIT. Publication of the decree that will give different treatment to rural producers in these states. Impetus to the establishment and growth of agribusiness companies. Support for the rural normal schools, a special scholarship program will be established and scientific research will be promoted through CONACyT. Temporary employment plan that will directly benefit over 300,000 families. 2 billions of pesos on additional credits for SMEs with guarantees of banking development. Additional 4 billions of pesos in credit for impetus to the agribusiness. Program renewal and redoubling Cafetales. Paving immediate investment program 1500 million of pesos in six months. Decree of fiscal support for economic recovery in Acapulco.

2. Participation of civil society -

Civil society will be convened to ensure the success of the measures announced. Citizens creating observatories to monitor and evaluate their progress in reporting. The Ministries of Interior and Social Development, expand opportunities for participation in social organizations.

3. Improvements in the income of the population