Three Keys to Understand the 2015 Budget Debate in Mexico

December 10, 2014

By Christopher Wilson and Pedro Valenzuela

mexican pesosEach fall, Mexico’s Congress debates the adminstration’s budget proposal. It was sent to Congress by the Peña Nieto administration in September, and a final version must be passed no later than the end of October to authorize revenue streams and by November 15 to detail expenditures. This is the first budget debate since Mexico’s 2013 fiscal reform was implemented, offering an important opportunity to analyze the impact of the tax policy changes on public income, and consequently, also on expenditures. The administration’s proposal represents a real increase of 1.2%, which, according to the government, will provide the funds to implement the structural reforms and fund new infrastructure and social programs. As a result of the increased spending and a dip in petroleum revenue, the government will continue to run a deficit, and Mexico’s public debt will continue to grow. Each of these three issues—tax collection, public expenditure, and the national debt—are explored in this article, all in context of Mexico’s structural reforms and brightening yet somewhat volatile economic prospects.

At the time of publication, the revenue proposal, which must be passed by both houses of congress, had been approved by the Chamber of Deputies and was in committee in the Senate. The Senate is expected to move the bill to the floor and approve the final version during the last week of October. The Chamber of Deputies made moderate changes to the executive proposal, including an increase in the expected exchange rate from 13 to 13.4 pesos per U.S. dollar and a drop in the expected reference price for oil from $82 to $81 dollars per barrel. After the ley de ingresos, or revenue law, is passed, attention will turn to the ley de egresos, the budget of expenditures, which only needs to be approved by simple majority in the lower house.

Read the article here.

This article was also published on Forbes.com. A shorter, Spanish version of this article is also available.


New Publication: Fostering Innovation in Mexico

December 10, 2014

Innovation2Mexicans are creative and entrepreneurial. Some of the world’s most notable and widely-used technologies have their roots in Mexico. Mexican chemist, Luis Miramontes, for instance, co-invented the progestin used in the first contraceptive pills. Mexican engineer, Guillermo González Camarena received the world’s first patent for the color television. And Mexican writer, Victor Celorio invented InstaBook, the technology that produces a perfect-bound book in one step and just two minutes. Mexico has a fine tradition of science and innovation, and President Enrique Peña Nieto is right to say, “Mexico should recognize, value, and take advantage of the great value of our human resources.” It is the Mexican entrepreneur that has been and will continue to be the strength of the nation’s economy and the driver of innovation.

To increase understanding of the benefits and challenges of innovation and to aid in the development of policy recommendations that encourage innovation in Mexico, the Mexico Institute of the Woodrow Wilson International Center for Scholars held a High-Level Innovation Forum for Policymakers in November 2013. The forum covered several topics related to innovation, including: entrepreneurship, financing innovative businesses, regulation, spillovers between universities and companies and the role of small and medium enterprises (SMEs). Questions examined at the forum included: How has the global economy changed, and what does it mean for innovation? How should we be thinking about innovation? What conditions are necessary for innovation to thrive? How can we attract greater investment for innovation activities? What types of government policies and regulations can strengthen innovation? How can we better integrate science and technology into practical applications? What are the barriers to innovation, and how can we overcome them? This publication summarizes the main themes of the conference and highlights some lessons learned. The purpose of this paper is to aid in ongoing dialogue, the next stage of which will take place in Washington, DC in November, 2014 (The publication is available both in English and Spanish).

Read the publication here.


Twenty years after NAFTA, a mini Detroit rises in Mexico

September 29, 2014

09/25/14 Bridge

iStock_000008876270Medium“The auto industry in Mexico is just booming, it’s taking off right now and it´s probably the industry in which Mexico is the most competitive,” said Christopher Wilson, a senior associate with the Mexico Center at the Woodrow Wilson International Center for Scholars in Washington, D.C. Wilson and others say Mexico’s ascension is a combination of low labor costs, a shift to an export-based economy in which 80 percent of vehicles produced in Mexico go to the powerful U.S. market, a well-defined NAFTA corridor, and modern factories that are more efficient and safe. An influx of banks has provided workers with greater access to credit.

Read More…


Op-ed: Use Brains, not Brawn, to Handle Migrant Crisis

July 14, 2014

By Christopher Wilson and Eric L. Olson

The Hill, 7/14/14

FBchildren-northern-mexico-credit-kelly-donlan2The huge wave of families and unaccompanied children arriving in South Texas from Central America has ignited a debate on how to best dissuade the influx.

Many have proposed managing the problem at the border by beefing up the Border Patrol with more agents. Some have even called for the National Guard to be sent in as a stopgap measure. A case could be made for modest staffing increases to the Border Patrol in the Rio Grande Valley, where the number of overall unauthorized migrant apprehensions has more than doubled since 2011, but it is important to note that adding more boots on the ground would do little or nothing to stem the flow of children across the border.  The real solutions lie in addressing the push factors in the source countries.

Read more…


Op-Ed: Hello 2014: For Mexico, the hard work starts now

January 3, 2014

Mexican Flag XXLBy Duncan Wood and Christopher Wilson

FT Beyondbrics, 1/3/2014

We will look back on 2013 as a truly historic year for Mexico. The scale of the reform process that was undertaken and largely achieved by President Enrique Peña Nieto is astonishing by comparison not only with other countries around the world today, but also in the context of recent Mexican history. For 15 years Mexico had seemed condemned to endure one of the less palatable elements of democratic systems, legislative gridlock. However President Peña Nieto, through a combination of determination, hard bargaining and political skill, has managed to work with the congress to pass a series of major reforms that do much to put Mexico on the road to modernity and competitiveness.

Read more…


Op-Ed: NAFTA and Open Regionalism

January 2, 2014

120px-North_America_(orthographic_projection).svgBy Christopher Wilson and Duncan Wood

Excelsior, 1/2/2014

With the North American Free Trade Agreement completing 20 years, it is a good moment to reflect and look toward the region’s future and its place in the world economy.

It is important to recognize that NAFTA was a first-generation free trade agreement, originally conceived in the 1980s, and for that reason it was very limited.

Read more…


HuffPost Live: The Future of Cross-Border Relations

May 29, 2013

John Moore - Getty ImagesThe Mexico Institute’s Christopher Wilson joined San Diego Mayor Bob Filner and others on ‘HuffPost Live’ to discuss cross-border cooperation.

Watch here: http://bit.ly/USMXborder


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