The World Bank warned that growth rates in Mexico are not the highest in the Latin American and Caribbean region, because although the country has “tremendous potential,” it has to work on issues such as water, energy, infrastructure, security, labor and legal certainty to boost investments.
“We have to make sure that we have the water, the energy, the well-trained workforce and the necessary infrastructure…(..)…We have to make sure that on the Mexican side a sense of stability is transmitted in the rules of the game, that investors “They can count on those rules to continue for 20 or 30 years so that the investments are worthwhile,” said the World Bank’s chief economist for Latin America and the Caribbean, William Maloney.
In a virtual press conference to comment on the report “Wealth taxes for equity and growth”, he explained that its geographical location transforms Mexico into a special place for the relocation of companies (nearshoring), proof of this are some related announcements with manufacturing and building Nvidia’s largest chip plant in the coming years, “that is very good and can create jobs.”
However, “we also know that there are energy problems in the north, we know that there are problems with water, there are companies that are worried about security and that reduces profitability. We also know that there is a need for greater training of the workforce so that we can continue doing these industries,” said the World Bank official.
He added that Mexico also has to have a clear strategy, since if the government wants investments and growth to occur, it will have to solve the problems that prevent this from expanding even further.
“I would say that both in nearshoring and in the green transition, the region (and Mexico) have to be careful that we are not passively receiving investments and saying that we have income and more work, we have to see how we can take advantage of those investments to have local high-tech industries,” Maloney said.
In this sense, he gave as an example that the companies called “unicorns” have grown a lot in recent years, but we have to see more of those and see the high-tech sectors so that they can grow much faster, but that requires a much broader agenda to ensure that the necessary skills exist in terms of science and engineering, as well as ensuring that universities are connected to the private sector.
“We have seen that type of collaboration in Querétaro. I was also in Guadalajara in the last six months and Guadalajara, at this moment, is starting, precisely, how it can accommodate its innovation and business ecosystem so that it can collaborate with high-tech multinationals and have more companies. The government of Guadalajara wants to invest more in innovation and this leads us to move in the right direction,” stated the economist of the international organization.
Although he recognized that Mexico has made a lot of progress in recent years with respect to poverty, he warned that there is much more to do and that requires more work in terms of infrastructure, innovation, education, since all of them are key elements for the country to give the next jump.
“There is a lot of demand for resources right now and we have to think about the past, we could count on Pemex a lot, but we have to think about how to diversify that base and look for other sources of income,” he said.
Regarding the trade relationship with North America and the impact that the upcoming elections in the United States may have on it, William Maloney mentioned that trade agreements between both countries have not been a point in the campaign rhetoric and, until now , part of that is because former President Donald Trump renegotiated NAFTA and that seems to be fixed now.
Meanwhile, Kamala Harris has not turned this into a big problem, “so it seems that there is going to be stability regarding the rules of the game for investing in Mexico, from that point of view.”
However, Mexico has to ensure clear rules of the game and “we have to be sure that the growth that arises from these foreign investments is more dynamic and with a broader base,” concluded the Bank’s chief economist for Latin America and the Caribbean. World.
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