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The tax regime will need to undergo reform in the medium term in order to raise the acutely low tax take, but political sensitivities will impede progress. Low standards of health and education are reflected in skills shortages. Violent crime is a problem for business but rebel movements are unlikely to impinge on the private sector or undermine political stability. The physical infrastructure, especially the electricity sector, is in need of fresh investment.
Mexico's political environment will become increasingly hostile in the approach to the July 2006 presidential election and the momentum of policymaking will be weak...
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