#mxASCOA Recap: Unleashing Mexico’s Economic Potential

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For a full list of speakers, see the #mxASCOA 2019 event page.

Watch videos of all #mxASCOA presentations.

This is a version of the resume in español.


To open AS/COA’s 2019 LACC Conference in Mexico City, AS/COA’s Chief Executive Officer Susan Segal explained how investment and trade can help the new Mexican government achieve its strategic goals. In addition to the 5 million American jobs that directly depend on trade with Mexico, Segal pointed out that in January and February 2019, Mexico was the United States’ largest trading partner. She highlighted the importance of one of President Andrés Manuel López Obrador’s priorities: development in southern Mexico. As Segal explained, expanding investment in this region will create a truly integrated and even more competitive North America. As she explained, the AMLO government plans to extend this development to Central America as the main sustainable solution to reduce migration flows in the region.

Then Minister of Finance and Public Credit Carlos Manuel Urzua talked about the challenges of the global economy and the main risks associated with the escalation of trade conflicts. Urzúa highlighted opportunities for investment in infrastructure projects through public-private partnerships, including the Mayan Train and an interoceanic corridor that will link Mexico’s two coasts. Urzúa said the railroad will handle both freight and passengers and will receive the majority of its funding through private investment in each of the seven segments along its roughly 930-mile route. “I want to reiterate that Mexico’s commitments will be guided by the principles of austerity, honesty and the fight against corruption,” the minister said in conclusion.

Deputy Minister of Finance and Public Credit Arturo Herrera Gutierrez then spoke with JP Morgan Benjamin Ramsay on driving social and economic development. Over the past 35 years, he said, Mexico’s per capita GDP growth has been just 0.83%, the lowest rate in Latin America after Venezuela. In addition, there are strong inequalities within Mexico: the GDP per capita in the capital is seven times higher than that of the state of Chiapas. He stressed both the need to preserve macroeconomic fundamentals while working to improve rural productivity and access to credit. Herrera also spoke at length about what he called “one of the ugliest aspects of inequality in Mexico”: the gender gap in labor market participation and earnings. “It’s a social issue of equity and equality, but also of economic potential,” he said of the inclusion of Mexican women in the workforce.

Eradicate corruption, stimulate economic growth, reduce poverty and improve security: these are the four main objectives of the AMLO government, said the Minister of Foreign Affairs Marcelo Ebrard. One of the ways to increase economic growth is through innovation and trade, he said, and gave an overview of Mexico’s various trade initiatives aimed at building an integrated and competitive region. “We have the structural and strategic elements to strengthen our relationship with the United States,” Ebrard said, commenting on efforts to ratify the USMCA. Ebrard pointed to the success of other integration agreements, such as the Pacific Alliance with its 52 observer nations in the eight years since its founding.

During his presentation, Carlos Salazar Lomelin, president of the Consejo Coordinador Empresarial, spoke about the challenges that Mexico faces when it comes to not only increasing investment, but also putting it to more productive use. “One of the reasons why we have so few investment projects is that Mexican systems are plagued by informality,” he said, pointing out that investment levels have remained stuck at around 20% of GDP for years in the country. For Salazar, an important solution is to fight corruption, and he applauded the fact that the López Obrador government has made it its top priority.

During the first panel of the day, leaders discussed private investment and business opportunities for the next five years in Mexico. Answer a question from the moderator El Financieroit’s Enrique Quintana on the changes he would like to see in the energy sector, CEO of AES Mexico Jose Arosa said, more than anything, that he would like things not to change, referring to the “titanic efforts” made to push through energy reform and saying that it is important not to reverse the progress made by dint of effort. Lorenzo Gonzalez Bosco, director of Temasek for Mexico and the Andean region, stressed the need for consistency in government signals when it comes to talking about business; the message that is heard abroad, he said, is often different from the domestic message. Executive Vice President of MetLife mike zarcone said his company was encouraged by the AMLO administration’s focus on fighting poverty and corruption, and that talks of infrastructure investment are “very attractive” to the insurance company.

The second panel of the conference, moderated by Bloomberg’s Juan Pablo Spinetto, was devoted to the private sector and how it can be an ally for growth. Speakers focused on the digital divide and other types of inequalities that exist in Mexico. Guilherme Loureiro, president and CEO of Walmart Mexico and Central America, stressed the importance of removing barriers. “What we need to do in Mexico is give people access to banking, internet and digital commerce,” Loureiro said. He also commented on labor reform, which he said will give workers more rights. Vice President of AT&T Mexico Monica Aspe Bernard stressed the need to increase competitiveness and labor productivity to attract more investment. “56 million Mexicans have had access to the Internet over a five-year period, which is proof of investment. But there are still 30 million missing to bridge the digital divide,” she said. She added that it was important to note that even with this increased digital access, 70% of transactions in Mexico are still done in cash, highlighting the opportunity to grow this digital access to financial services. Daniel Martinez-Valle, CEO of Mexichem, said he is optimistic about what Mexico can represent. Citing a report that Mexico has the potential to become the world’s fifth largest economy by 2050, he said: “We cannot lose sight of the fact that this is a real possibility.”

With 13 free trade agreements providing preferential trade access to more than 50 countries, the Mexican economy is very open and closely linked to trade. The country’s trade flows closely follow the country’s economic expansion, always bringing with it GDP growth, as the Deputy Minister of Foreign Trade Luz Maria de la Mora Sanchez shown in his presentation. The problem, the deputy minister said, is finding a way for domestic businesses and jobs to benefit from Mexico’s integration into the global trading system. She praised global companies for providing some of the highest quality jobs, and said it was a priority for the economy ministry to support them. De la Mora gave an overview of the country’s main export sectors and stressed that Mexico needed to move away from manual labor at the lower end of the production chain and find a way to add more value to the global supply chain. She also explained how the AMLO government is working to broaden the participation of small and medium enterprises.

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