MEXICO CITY, Mexico – Bold predictions were made about Mexico’s economic outlook at a bi-national conference hosted by the United States-Mexico Chamber of Commerce.
The conference, held at the Four Seasons Hotel in Mexico City on Friday, was titled “Mexico 2012: A Year of Political & Social Transition.” It was held in Mexico’s capital to coincide with the inauguration of Enrique Peña Nieto as president of Mexico.
In Mexico the Chamber is known as Cámara de Comercio México Estados Unidos.
The Chamber’s president and CEO, Al Zapanta, pointed out that his group was directly or indirectly involved in helping its members secure about $600 million in trade, services and investments during the past year. He further noted that the Chamber will observe its 40th year anniversary in 2013–having been formed as formal group in 1973.
Zapanta personally has a distinguished career in the military and the public and private sectors with a vast array of experience all over the world.
Serving a moderator, Zapanta introduced his friend of many years, Col. Eric Rojo, the managing director of ‘Magination Consulting International, LLC, a Washington D.C.-based firm that offers services in security strategy, risk assessments, international business. Rojo is also security programs coordinator at the Center for Dialogue and Analysis on North America (CEDAN) of the Instituto Tecnologico y Estudios Superiores de Monterrey (ITESM).
Rojo declared that Mexico would readily discern the differences between the old PRI party and the new PRI party. “There is a different dynamic and paradigm and Mexico will work more closely with the United States and around the world in the areas of trade and business,” he predicted. Rojo echoed the theme of Peña Nieto that Mexico is the largest Spanish speaking country in the world and will enhance its presence on the world stage in many areas, primarily in trade and business development leadership.
Rojo said that in the area of security, Mexico City is one of the safest in the world. This is due to the presence of federal and local police and law enforcement agencies. He said these are more professional than in other parts of Mexico.
Rojo predicted the cost of energy will go down and its relationship with the U.S. will be enhanced in the area as well.
Rojo said he doubted that Mexico will lose its reputation over night as a violent country. He recalled that as a young boy he remembers the local newspapers had a “red page” that screamed of violence and mayhem. He said this is not likely to change in Mexico or, for that matter, in the U.S.
“The media goes for the easy story in both countries and that is often the more headline producing violence. But the under reported story in Mexico is the security of the country and how it is combatting the challenges facing the country,” Rojo said.
“The emphasis on good news is just not that exciting. It is rarely mentioned that trade from both the U.S. and Mexico is often more than one billion dollars a day.”
Rojo speculated that legalizing drugs of all types in the U.S. would be a long time coming. “There has not been enough serious study on the impact of legalizing drugs in the U.S. and the law of unintended consequences has to be understood before legalization will take place,” he said.
Sen. Javier Lozano, the federal senator from the state of Puebla, has also been the Secretary of Labor. A member of the PAN party, he spoke about the changes and the transparency new labor laws would bring to Mexico in time. He pointed to the existence of a young labor force which could and would learn new technology easily, and he noted that production in Mexico had increased substantially in recent years. “The focus in Mexico is growth,” Lozano said.
The panel on Mexico’s Economic Forecast for 2013 made some bold predictions but have the credentials to back them up. The panel included Gabriel Lozano, chief Mexico economist at JP Morgan, Ricardo Haneine, partner and vice president of A.T. Kearney, and Felix Boni, chief credit officer at HR Ratings de Mexico. Boni holds a Ph.D. in political science from the University of Pittsburgh and a Master’s degree in Management from the La Salle University in Philadelphia.
The panel predicted a GDP growth level of around four percent or higher in Mexico. The manufacturing sector and the service sectors would lead this growth, they predicted. The challenge will be to sustain a growth of 3.9 percent. They predicted Mexico will be one of the primary leaders in economic growth along with Brazil and will be well positioned globally to expand its trade in North America and Latin America. Its ties with China will also continue to grow, the panelists said.
Boni explained that the nation’s debt at the federal, state and local levels was “in pretty good shape.” However, he said there were more challenges at the state and local level. Most of the debt is held by banks and the federal government, he explained.
Taxes remain low, Boni said, pointing out that Pemex, the nationalized oil and gas firm, contributed ten percent of the overall taxes collected last year. There are dangers for the local and state economies in Mexico that sound very familiar in the U.S.: short term debt, lack of transparency and unfunded pensions at the state level.
The federal government, however, is committed to expanding social security pensions to more than the 40 per cent of the country that it now serves with people at retirement age, usually in the age bracket of the 60s, the panelists stated.
Another prediction is that both the private and public sectors will become more involved in developing research and development in the manufacturing sector and the health sector. Panelists pointed out that more U.S. companies are returning to Mexico for manufacturing assistance due to the improved economies of scale that have come about due to better road and rail transportation. This will create substantial growth in the coming years, the panelists stated.
The bi-national meeting concluded by honoring the four-member U.S. congressional delegation, a bipartisan group led by Republican Congressman Pete Sessions of Dallas, Texas. The other three congressmen in the delegation were Michael McCaul of Austin, Texas, Henry Cuellar of Laredo, Texas, and Jared Polis from Colorado.
Reflecting many of the attendees attitude towards the meeting and participation in the presidential inauguration was international attorney at law, Marcos G. Ronquillo, of Bierne, Maynard, & Parsons, LLP, an international law firm. Ronquillo offices out of Dallas, Texas, but practices in Latin America, Europe and China.
“I have known Al Zapanta for many years and he is a real professional,” Ronquillo said. “He produces good meetings with solid information for our clients. We have had the opportunity to visit with clients at this meeting and to see old friends and meet new people. The U.S.-Mexico Chamber of Commerce does its job well.”