Interview: Francisco González Díaz
How are the government’s structural reforms expected to impact the economy?
FRANCISCO GONZÁLEZ DIAZ: The structural reforms approved in 2013 seek to increase productivity, acting as a lever for growth and attracting larger flows of foreign direct investment (FDI). The financial, telecommunications and energy reforms are key examples of what our strategy entails. Energy will be opened up to foreign investment through service contracts, production sharing, profit sharing, licensing or any combination of these. A great number of firms have already expressed interest in investing in our country and taking part in the energy sector, particularly in deepwater exploration. Opening the energy sector is expected to add one percentage point to GDP by 2018. Financial reform will remove limits to FDI in numerous financial entities and allow new mechanisms of investment via subsidiaries. Additionally, the telecommunications reform allows 100% foreign ownership in telecommunications and satellite communications, as well as up to 49% foreign ownership in radio broadcasting. It is expected that, together, the financial and telecoms reforms will contribute around three-quarters of a percentage point to GDP for 2015-18.
What effect has the slowdown of the BRIC (Brazil, Russia, India and China) economies had?
GONZÁLEZ: Institutional investor interest in Mexico is going up; however, we don’t see this as a consequence of the slowdown in BRIC economies. On February 5, 2014, Moody’s upgraded Mexico’s sovereign rating from “Baa1” to “A3” with a stable outlook. This is the first time in Mexico’s history that a ratings agency has put us in the “A” category. The government’s structural reforms were one factor leading to the upgrade. Thanks to its legal stability, open economy, export platform and the potential of the domestic market, in 2013 Mexico attracted more than $35bn and was the world’s 12th-largest recipient of FDI, according to the UN Conference on Trade and Development (UNCTAD). Our country is also the ninth most attractive destination for FDI, according to AT Kearney, and forecast to be seventh in 2015, according to UNCTAD.
Into which sectors would you expect to attract additional foreign investment?
GONZÁLEZ: Overall, we seek any foreign investment that can provide prosperity, employment and economic development. We support investments that bring better-paid jobs in positions related to research and innovation, in fields such as aerospace, automotive, medical devices, renewable energies, electric-electronic, IT or creative industries, just to name a few. We seek to diversify Mexico’s investment environment while adding value to our exports. Our strategy is to promote and support projects that can strengthen our global value chains and reinforce our competitiveness as a global production and export platform.
How can exports by micro, small and medium-sized enterprises (MSMEs) be increased?
GONZÁLEZ: MSMEs are the backbone of the national economy, and they are essential to the growth of the country. According to the national statistics agency, seven out of 10 exporters are MSMEs, although this group accounts for only 10% of monetary receipts. It is our job to support MSMEs in overcoming the challenges they face when initiating exporting and internationalisation. In this regard, the OECD has identified four major challenges that these businesses face: funding, market location, contact with customers, and incorporation into global value chains.
We are supporting MSMEs either through strategic alliances with Bancomext, the Mexican Institute of Intellectual Property and the National Institute of Entrepreneurship, or through our catalogue of services. ProMéxico has developed tools to help companies identify and develop their target markets and potential customers. We also assist companies in partnering with global firms so that more local MSMEs can become part of the value chains of multinational companies.
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