New Publication | A Mandate for Mexico

June 29, 2015

By Lucy Conger

mandate for mexicoIt was not so long ago that Mexico teetered on the brink of bankruptcy following a short-lived oil boom and a wild run of government spending. And, until quite recently, Mexico, despite sharing a 2,000-mile border with the United States, kept foreign goods out and gave domestic industries nearly exclusive access to a country-sized captive market.

Free trade has made Mexico a powerful manufacturing platform, a top global automobile assembler, and has radically diversified the economy, sharply reducing dependence on oil exports. The paradigm shift that unfettered Mexico’s protected and closed economy has been highly successful in creating a stable economic and policy environment and in making Mexico a marketfriendly global super-trader. But formidable challenges remain. Economic growth has slowed and consistently falls short of the level needed to create enough jobs to absorb the expanding domestic labor force.

Mexico is at a critical juncture. The record shows that the first wave of reforms that began 30 years ago failed to deliver the desired boost to economic growth and competitiveness. The reforms now underway promise even bigger changes for the economy, particularly by opening up the long closed petroleum industry. Looking ahead, can the new wave of reforms move Mexico into a higher gear, stimulate increases in productivity and economic growth, lubricate the economy with more credit, establish and enforce genuine competition in strategic sectors, and train the work force in modern skills? Or, three decades hence will we look back and say the Peña Nieto reforms were inadequately implemented and Mexico remains a low-growth, low-productivity economy?

This is a timely moment for reviewing Mexico’s success with deep economic reforms and asking what is required from here on in to make the new wave of reforms successful so that Mexico and Mexicans can enjoy the benefits of higher growth and productivity. This study offers a qualitative analysis of the deep economic reforms undertaken in Mexico during the past 30 years, the progress made and informed opinions on what is needed today to boost economic growth, enhance competitiveness and, hopefully, increase employment. The study summarizes the views about the successes and failures of the first wave of reforms as seen by a select group of former cabinet members and other prominent policy makers, consultants to government, opinion shapers in policy centers, and thought leaders in academia.

Download the report here.


EVENT THIS AFTERNOON: NAFTA & the Strengthening of the Mexican Economy

June 29, 2015

120px-North_America_(orthographic_projection).svgWHEN: TODAY, June 29, 2:00-3:30pm

WHERE: 5th Floor Conference Room, Woodrow Wilson Center

Click here to RSVP.

A live webcast will be available here.

Two decades ago, Canada, Mexico, and the United States created a continental economy. Since the signing of the North American Free Trade Agreement, Mexico has lived through a currency crisis, a democratic transition, and the rising challenge of Asian manufacturing. Many of the dynamics of North America today, from Mexico’s reform agenda to continental concerns about competitiveness, have their roots in the conditions that produced NAFTA, in the agreement itself, and in the tremendous transformations it wrought. Looking back at that period provides context for understanding today’s reforms. Today, Mexico’s competitiveness agenda, championed by President Enrique Peña Nieto and widely supported by the Mexican Congress, includes specific actions oriented toward promoting larger inflows of foreign investment by opening strategic economic sectors to private participation. This package of reforms would bring a sweeping transformation of the economy.

The Woodrow Wilson Center’s Mexico Institute is pleased to invite you to an event on NAFTA and the Mexican economy. Jaime Serra Puche will present his book NAFTA and the Building of a Region. An Essay from the Mexican Perspective and Lucy Conger will present her paper on Mexican competitiveness, A Mandate for Mexico. Ambassador Carla A. Hills will provide commentary on both publications, in relation to the broader subjects of NAFTA and the Mexican economy.

Speakers

Jaime Serra Puche
Chairman, SAI Law and Economics

Ambassador Carla A. Hills
Chair and CEO, Hills & Company, International Consultants

Lucy Conger
Independent Journalist

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center


Mexico’s Extreme Inequality: 1% Owns Half of Country’s Wealth

June 26, 2015

6/25/15 teleSUR

Photo by Flickr user Aleiex

Photo by Flickr user Aleiex

Extreme inequality has increased in Mexico while the economy has stagnated, concentrating almost half of the country’s wealth in the hands of its elite 1 percent, according to a new Oxfam report. According to the report, the wealth of the Mexico’s 16 billionaires multiplies five fold each year, while the country’s GDP increases by less than 1 percent annually. Mexico is among the top 14 richest countries in the world by GDP, yet over half its population, or 53 million people, live in poverty.

The report states that one of the most serious aspects of inequality is unbalanced income distribution, which is becoming more pronounced. Mexico’s telecommunications tycoon Carlos Slim is the second richest person in the world. His estimated 5 percent return on wealth alone could cover the cost of some 2 million low wage workers at the minimum wage rate of US$4.50 per day. The wealth of Slim and just three fellow Mexican billionaires account for 9 percent of the country’s GDP, equivalent to the income of nearly 20 million Mexicans on the other side of the inequality equation.

Read more…


Upcoming Event! NAFTA and the Strengthening of the Mexican Economy

June 23, 2015

NAFTAWHEN: Monday, June 29, 2:00-3:30pm

WHERE: 5th Floor Conference Room, Woodrow Wilson Center, Washington, DC

Click here to RSVP. 

Two decades ago, Canada, Mexico, and the United States created a continental economy. Since the signing of the North American Free Trade Agreement, Mexico has lived through a currency crisis, a democratic transition, and the rising challenge of Asian manufacturing. Many of the dynamics of North America today, from Mexico’s reform agenda to continental concerns about competitiveness, have their roots in the conditions that produced NAFTA, in the agreement itself, and in the tremendous transformations it wrought. Looking back at that period provides context for understanding today’s reforms. Today, Mexico’s competitiveness agenda, championed by President Enrique Peña Nieto and widely supported by the Mexican Congress, includes specific actions oriented toward promoting larger inflows of foreign investment by opening strategic economic sectors to private participation. This package of reforms would bring a sweeping transformation of the economy.

The Woodrow Wilson Center’s Mexico Institute is pleased to invite you to an event on NAFTA and the Mexican economy. Jaime Serra Puche will present his book NAFTA and the Building of a Region. An Essay from the Mexican Perspective and Lucy Conger will present her paper on Mexican competitiveness, A Mandate for Mexico. Ambassador Carla A. Hills will provide commentary on both publications, in relation to the broader subjects of NAFTA and the Mexican economy.

Speakers

Jaime Serra Puche
Chairman, SAI Law and Economics

Ambassador Carla A. Hills
Chair and CEO, Hills & Company, International Consultants

Lucy Conger
Independent Journalist

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center

Click here to RSVP. There will be a live webcast of this event.


A ‘COOL’ response from Canada and Mexico

June 19, 2015

6/19/15 The Hill

Photo by Flickr user I.A.M.

Photo by Flickr user I.A.M.

Country of origin labeling (COOL) has been contested by Canada and Mexico since December 2008, with the U.S.’s final appeal being denied by the World Trade Organization (WTO) in the last several months. The finding of the WTO was that the COOL provisions discriminated against Canada, Mexico and other countries from a technical perspective because the information required of slaughterhouses and processors was substantially greater than that disseminated to the public. This translates to a conclusion that imported products received less favorable treatment than domestic products; thus the U.S. violated its WTO obligation.

Read more…


The Latin American Foreign Investment Boom: Recent Trends and the Evolution of Multilatinas

June 11, 2015

multilatinasBy Adrián Blanco Estévez

Latin American companies—both public (state-owned enterprises) and private—have been growing in size and presence abroad, through operations that range from modest representation offices to acquisitions of first-world corporations. The phenomenon of “multilatinas” comprises the growing number of companies that gradually began to invest abroad in the 1990s, but surged forward with a huge wave of investment starting in 2000. In fact, 2010-2012 marked the highest levels of FDI outflows from Latin America in the region’s history.

Mexico is no stranger to the birth of multilatinas. Mexico, along with Brazil and Chile, leads the way in terms of presence of multilatinas, and is the second most important country in the region in terms of FDI outflows, accounting for virtually all outflows from Central America. Additionally, Mexico is the leader among the Latin American countries in terms of investment in the United States. Thus, with 18 multilatinas and 24.5 percent of total FDI outflows from Latin America, the surge in foreign investments by major Mexican companies is clear

This publication, The Latin American Foreign Investment Boom: Recent Trends and the Evolution of Multilatinas, analyzes the multilatina phenomenon in order to define its characteristics today, including political, institutional, economic, and financial factors that explain these companies’ birth, develompent, and transformation into global players.

Download the publication here.


Attracting Immigrants Grows Our Economy

June 11, 2015

6/09/15 Huffington Post – The Blog

naturalizationWe can all be glad that unemployment recently fell to 5.4 percent. But the reality is that consistent economic growth remains elusive.

Fortunately, the country has an untapped source of economic growth potential, and that is the many creative, industrious and motivated immigrants in our country. The United States has historically remained one of the world’s top economies in large part because it has been able to attract diverse people from around the globe, reaping the benefits of their talent and hard work.

But, too often in today’s political climate, immigration is cast as a negative, with issues like border security and unauthorized immigration dominating the news cycle. While we acknowledge the importance of those issues, they are only a part of the broader immigration question. After all, our immigrant population is one of the most promising solutions for our country’s tepid economic growth.

Read more…


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