Competitive advantages for investing in Mexico Mexico: a ... ??Competitive advantages for investing in Mexico ... Competitive advantages for investing in Mexico 4 ... SLP 14 A country with great ...

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Binational Center Library / Texas A&M International University Competitive advantages for investing in MexicoMexico: a leading economyA country with competitive sectors2ProMxicos strategiesBinational Center Library / Texas A&M International University Mexico: an important global actor31. Mexico is a democracy.2. Mexico is one of the largest economies in the world.3. Mexico has great macroeconomic stability.4. Mexico is an open economy.5. Mexico has young, talented and highly-skilled people.6. Mexico is a leader in advanced manufacturing.7. Mexico is the next global logistics high value added hub.8. Mexico is a world within a country.9. Mexico is a reliable and attractive destination for investment.10. Mexico is ready to increase its productivity through its structural reforms.Binational Center Library / Texas A&M International University Competitive advantages for investing inMexico4Binational Center Library / Texas A&M International University ExportsplatformInternalmarketHumancapitalAdvancedmanufactureMacroeconomicenvironmentMexicoscompetitiveadvantages5 competitive advantages5Binational Center Library / Texas A&M International University Forecasts02,0004,0006,0008,00010,00012,00014,00016,00018,000EUChinaJapnAlemaniaFranciaReinoBrasilRusiaItaliaIndiaCanadAustraliaEspaaMxicoCoreaMillion dollarsFuente: Goldman Sachs. The N-11: More Than an Acronym. Documento de economa mundial No: 153. Marzo de 2007/ HSBC/ACCENTURE.1/ Pronstico de Goldman Sachs / Fondo Monetario Internacional.205015th place2013Worlds largest economies14th placeGoldman Sachs ForecastGross Domestic Product(Billion USD)6Gross Domestic Product(Billion USD)Goldman Sachs estimates thatMexico will be the 5th largesteconomy by 2050.According to Accenture, Mexicowill be one of the Big Six in2025.According to HSBC Mexico willbe the 8th largest economy in theworld by 2050.USAChinaJapanGermanyFrance UKBrazilRussiaItalyIndiaCanadaAustraliaSpainMexicoSouthKoreaBinational Center Library / Texas A&M International University $0$50$100$150$200$250$300$350$4000%20%40%60%80%100%120%140%160%20002001200220032004200520062007200820092010201120122013Billion dollarsPercentage of inflationManufactures Oil Primary InflationSolid macroeconomic environment7Source: INEGI / Bank of Mexico.Evolution of inflation, exports and international reserves in Mexico(2000- 2013)Reserves record: 176 billion dollarsExports record: 380 billion dollarsReservesBinational Center Library / Texas A&M International University FDI flows into Mexico (1999-2013*)8Source: Ministry of Economy. General Directorate of Foreign Investment. */ Figures to September 2013.Record-highMUSD15,45335,188 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,0001999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Binational Center Library / Texas A&M International University 3634,404891 1,2534,4326,474 5,7588,2561,1578,46415,04512,13925,597 - 5,000 10,000 15,000 20,000 25,000 30,0001999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Mexicos FDI Outflows(million dollars)9Source: UNCTADRecord-highBinational Center Library / Texas A&M International University 10A3Baa1Baa3BBB+ BBB+BBBBBBBBB-BBB+ BBB+BBBBBBBBB-Positive Ratings* Scores that are below the dotted line are investments with high degree of risk or speculation.Source: Fitch Ratings, Standar & Poors Rating Services, Moodys Investor Service.Binational Center Library / Texas A&M International University 11Source: DataMarket, c J.P. Morgan Emerging Markets Bond Index .0500100015002000250002/01/200802/03/200802/05/200802/07/200802/09/200802/11/200802/01/200902/03/200902/05/200902/07/200902/09/200902/11/200902/01/201002/03/201002/05/201002/07/201002/09/201002/11/201002/01/201102/03/201102/05/201102/07/201102/09/201102/11/201102/01/201202/03/201202/05/201202/07/201202/09/201202/11/201202/01/201302/03/201302/05/201302/07/201302/09/201302/11/201302/01/2014EMBI plus (emerging markets)Mexico Argentina Brazil Turquia South AfricaTurkeyMexico in the EMBI+Binational Center Library / Texas A&M International University ExportsplatformInternalmarketHumancapitalAdvancedmanufactureMacroeconomicenvironmentMexicoscompetitiveadvantages5 competitive advantages12Binational Center Library / Texas A&M International University 8121720451NumberofcountriesOur FTAs give privileged access to 61% of the worlds GDP.Mexico has access to 45 countries through its free trade agreements(1.2 billion people).Number of countrieswith privileged access*We are commited to free trade13Sources: Brazil; China: Colombia:; United States: ; Chile: Direcon; Mexico: Ministry of Economy.Binational Center Library / Texas A&M International University Source: SCT.LzaroCrdenasManzanilloVeracruzTampicoAltamiraGuanajuatoMonterreyGuadalajaraSLP14A country with great infrastructureMexico has: 63 border crossings. 68 international ports. 64 international airports. 16,700 miles of railroads. 230,000 miles of roads.Binational Center Library / Texas A&M International University Fuentes: SCT/ US Department of Transportation.15A country part of NAFTA +50 border crossingswith the US. NAFTA market= 18trillion USD. 16 trillion EU. Bilateral trade with theU.S.= 1 million dollarsper minute. 1 million people and300 thousand vehiclescrossing the borderdaily.Binational Center Library / Texas A&M International University Pacific Alliance16 Elimination of 100% of tariffs. 92% immediately and the other 8% in thenext 15 years or sooner. Elimination of visas between members. Platform for student and academic mobility. Unification of stock exchanges. Homologation of health and regulatorycertifications.Binational Center Library / Texas A&M International University Mxico And the TPP17The 12 countries of the TPP represent: 38% of global GDP. 23% of world exports. 28% of world imports. 11% of the worlds population.In negotiationP4 (Brunei, Chile,New Zealand andSingapore)Binational Center Library / Texas A&M International University ExportsplatformInternalmarketHumancapitalAdvancedmanufactureMacroeconomicenvironmentMexicoscompetitiveadvantages5 competitive advantages18Binational Center Library / Texas A&M International University Source: US Census Bureau: http://www.census.gov/population/international/data/idb/informationGateway.php ; INEGI, 2011; Population Projections forMexico 2005-2050, CONAPO. *Population (in millions) by age group. 118 million inhabitants with a median of 27 years. 52 million in the labor force. According to forecasts, there will be more than 83 million people ofproductive age by 2020.Mexicos population pyramid (2030)*Male FemaleDemographics are on our side19Mexicos demographic bonusBinational Center Library / Texas A&M International University Human capital: our main strength20The main reason to invest in Mexico isits human capitalJohn Rice, Vicepresident of GeneralElectric.The experience of Mexican engineersis one of the reasons we cotinue todevelop new projects in the countryYoung Ju Lee, President of Samsung.Mexico has unique competitiveadvantages, but its flexible and creativehuman capital is the one that highlightsthe mostPierre Beaudoin, President and CEO ofBombardier.Binational Center Library / Texas A&M International University ExportsplatformInternalmarketHumancapitalAdvancedmanufactureMacroeconomicenvironmentMexicoscompetitiveadvantages5 competitive advantages21Binational Center Library / Texas A&M International University Source: Competitive Alternatives 2012, KPMG; Global Benchmark Report 2011, of the Danish Industry Confederation;Manufacturing Outsourcing Cost Index 2010, Alix Partners.22According to KPMG, in 2011Mexico had an average costadvantage of 21% (over 19industries), compared to the US.MexicoUKNetherlandsCanadFranceItalyUSAGermanyAustraliaJapan21.0%5.5% 5.3% 5.0% 3.9%2.1%0% -0.1% -3.7% -9.4%% cost advantage relative to the USBaselineThe Alix PartnersManufacturingOutsourcing CostIndex ranksMexico as thebest country(better thanBRICs).The mostcompetitivecountry in termsof costs andtaxes, accordingto GlobalBenchmarkReport.Most competitive total costsBinational Center Library / Texas A&M International University Mexico ranks 20th inHarvard and MIT'sAtlas of EconomicComplexity. It acknowledges that Mexico can retain large amounts of productiveknowledge. Mexico manufactures and exports a large number of sophisticatedproducts. Manufacturing accounts for 80% of our exports.Source: INEGI/ Presidency/ Harvard and MIT, Atlas of Economic Complexity/ OECD. 23Mexico is an exporter of sophisticated productsBinational Center Library / Texas A&M International University A sophisticated economyNo. Country % GDP1 South Korea 30.4%2 Germany 28.1%3 Mexico 17.2%4 China 15.0%5 France 13.2%6 Italy 12.9%7 United Kingdom 11.1%8 Japan 9.9%9 Canada 7.3%10 Turkey 7.0%11 South Africa 5.8%12 United States 5.1%13 India 4.5%14 Indonesia 4.1%15 Argentina 3.7%Medium and HighTech Exportsas a percentage of GDP (2011)24Source: IHS Data Global Insight; ProMxicos Analysis. Data in USD Real terms, 2005, considering de G20 countries.Medium Technology (MT): Specialty Chemicals Machinery, Equipment, Appliance Electrical Industrial Machinery Motor Vehicles & Parts Total Motorcycles & Transport. Equipment Railroads & EquipmentHigh Technology (HT): Aircraft & Spacecraft Advanced materials Computers & Office Machinery Communication Equipment Medical, Precision & OpticalBinational Center Library / Texas A&M International University Automotive Mexico is the 8th vehicle producer in theworld. And the 4th exporter globally of new lightvehicles in the world. We export almost three times more than Braziland India combined. We are a strategic supplier to the North and LatinAmerican automotive markets. In 2011, Mexico was the leading autopartssupplier to the United States. Eleven of every 100 light automobiles sold in theUnited States are manufactured in Mexico. 84 of the top 100 autoparts companies in the worldhave production facilities in Mexico.Source: OICA/ Global Trade Atlas/ AMIA/ Wards Automotive Reports/ AASA, 2011.25Fords plant in Hermosillo,Mexico, is the only facility in theworld to produce the newFusion model and the LincolnMKZ.Binational Center Library / Texas A&M International University Electric-electronic26 Mexico is the leading homeappliance exporter in LatinAmerica. And the 6th globally. It is the leading flat television screenexporter in the world. The second refrigerator exporter. The 4th global exporter of computers. 8 of the top 10 transnational electronicsmanufacturing services (CMs) haveoperations in Mexico.According to KPMG, electronicsassembling costs in Mexico are15% lower than in the UnitedStates.Source: Global Trade Atlas/ KPMG/ Manufacturer Market Insider.0 20 40 60 80 100 120MexicoRussiaBrazilCanadaThe NetherlandsFranceUnited KingdomItalyUSAGermanyAustraliaJapanCost IndexElectronics assembling(US=100)Binational Center Library / Texas A&M International University MiningFuente: The Silver Institute/ Cmara Minera de Mxico (CAMIMEX)/ Global Trade Atlas/Metals Economics Group/ INEGI.27 According to Behre Dolbear,in 2013 Mexico was ranked5th best destination forinvestment in miningprojects. Mexico is the leading country in LatinAmerica and the 4th globally in termsof receiving investments for miningexploration in nonferrous minerals. Mexico is the leading silver producerand exporter globally. The second global fluorite producerand third bismuth producer. The second gold producer in LatinAmerica.Binational Center Library / Texas A&M International University Mexicos major goals and strategies28ProMxicoMxicoFDIattractionInternationalizationExportspromotionGENDER EQUITYKEEP GOVERNMENT CLOSE TO PEOPLEDEMOCRATIZATION OF PRODUCTIVITY3. Education4. Prosperity5. Responsibleglobal actor2. Inclusiveness1. PeaceBinational Center Library / Texas A&M International University EnhanceMexicospresence inNorth AmericaFoster Mexicosbonds withLatin Americaand theCaribbeanDiversifyexports to theAsia-PacificregionEnhanceMxicos FTAwith the EUProtectMexicosinterests in theglobal markets5 strategies for boosting our commercePROMXICO29Binational Center Library / Texas A&M International University What Do We Offer in ProMxico?30ProMxicoBoosts activities aimed topresent an overview ofinternational business andtrade. It also seeks toencourage enterprises andstrategic sectors to reachinternational markets andpromote the country'simage.Assists clients to reach aspecific goal, throughtraining, personalassistance or consulting.Brings companies togetherand link them to private orpublic organizations andacademia, among others,with specific goals that areusually project-related.Simplifies the execution orincreases the appeal of aproject, whether for export,FDI or internationalization,through incentives, studiesor by opening markets.Development of programs and projectsDCC/ ACT Model/ Softlanding/ Aftercare/ Roadmaps/ Clusters articulation/ MOMA/ PROCEIBinational Center Library / Texas A&M International University www.promexico.gob.mxcarlos.marron@promexico.gob.mx@ProMexicoTW(713) 984-45984507 San Jacinto St., 3rd. FloorHouston, TX 7700431Binational Center Library / Texas A&M International University

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