Although Mexico has vast reserves of oil, in recent years its production of oil has been falling.
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Although Mexico has vast reserves of oil, in recent years its production of oil has been falling. In order to reverse this decline, President Felipe Calderon recently attempted to privatize the state-run oil company Pemex [Luhnow, 2008]. Many opponents of the proposal argued that privatization of Mexico’s telephone company Telmex had led to a monopoly, which was charging exorbitant prices. Would you expect something similar to happen if Pemex were privatized? Relate your answer to our discussion of the role of market environment when assessing the consequences of privatization.
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