MEXICO CITY, Jan 8 (Reuters) - Mexico must improve the rule of law, shape up its police force and crack down on corruption to make the most of an ambitious reform agenda, the Organisation for Economic Co-operation and Development said on Thursday.
In a report released on Thursday, the OECD said the reforms, if implemented correctly, could boost economic growth by around 1 percentage point per year over the next 10 years.
The OECD report saw economic growth picking up to 3.9 percent this year from its estimate for 2.6 percent last year and reaching 4.2 percent in 2016.
But to increase chances of success, Mexico must reform its courts, strengthen the rule of law and reduce corruption, the report said.
"Widespread perception of corruption, weak administrative governance and poor enforcement of legal rules are serious problems, deterring investment and promoting informality," the OECD said.
Mexican President Enrique Pena Nieto is facing a political crisis after corrupt police in the restive state of Guerrero abducted 43 teacher students in September and handed them over to a gang that apparently massacred them.
The incident triggered mass protests. Outcry also erupted after revelations that the president's wife was acquiring a home from a group that formed part of a consortium that had won a $3.75 billion rail contract that was then canceled.
Revelations that Pena Nieto himself enjoyed rent-free use of a house owned by the group as a campaign office when he was running for office in 2012, and that his finance minister bought a house from the same firm, have compounded the scandal.
The uproar has overshadowed Pena Nieto's ambitious reform agenda that broke state oil company Pemex's 75 year monopoly and introduced competition into the telecoms sector long dominated by tycoon Carlos Slim.
Pena Nieto pledged to reform the penal system and send a proposal to Congress to unify multi-layered police forces in Mexico's 31 states in the wake of the apparent massacre.
Reporting by Alexandra Alper; Editing by Cynthia Osterman