México

Julieta Dorantes

Maria Porto

Agenda.

Mexico: General information about the country.

Mexican Industry: quick review.

Industrial Policy: what are we doing.

Conclusion: study case.

Location.

North-America North: USA South: Guatemala

& Belize East: Atlantic

Ocean West: Pacific

Ocean

Characteristics.

• 1,973,000 km2

•Population: 97,014,867

Urban: 72,406,270

Rural: 24,608,597

•Official language: Spanish

•Religion: 89% catholic

•Currency: Mexican peso

Political characteristics.

Representative & Federal Republic

Executive Legislative Juridical

Macroeconomic indicators.

GDP: US $617.8 billion.

GDP per head: US $6, 368

Growth: 0.2 % (2002)

Income distribution.

0%

10%

20%

30%

40%

50%

60%

70%

GINI coefficient

Eslovac Republic

Belaruss

Sweden

Ukrania

Poland

Germany

France

USA

China

Malaysia

Rusia

México

Ginea-Bissau

Kenya

Brazil

Other indicators.

Inflation rate: 6.5% Unemployment: 2.46% Minimum wage: US $3 per day!!! Gross external debt:

11.8% Exchange rate: free- floatation

Industry.

• Geographic distribution.

Firm’s sizes according to sectors.

SECTOR MICRO SMALL MEDIUM BIG TOTAL

Agriculture & livestock 410 192 52 11 665

Mining 153 42 36 33 264

ManufactureTextil industry 28,403 10,116 5,295 2,484 46,298

Construction 11,403 3,271 672 108 15,454

Total 40,369 13,621 6,055 2,636 62,681

Micro & Small firms.

0%

10%20%30%40%50%60%

70%80%90%

100%

Agriculture &livestock

Mining Manufacture Construction

BIG

MEDIUM

SMALL

MICRO

90% of the total established firms

42% of the GDP

64% of the employment

Industrial Policy.

Human capitaldevelopment

Financing & taxation system

Regional integration

Technological change

Internationalization

Goal: Highest competitiveness, close the gap among Mexico and it’s international partners.

Financing & taxation system.

Banking as a development instrument.

Credit support & technical assistance.

Development of secondary stock market.

Create venture capital as an alternative financing source.

Elimination of imports taxes. Reduction of sales tax.

Human Capital development.

CONTIGO:

Social strategy. Goals: eradicate poverty

complete development of every single Mexican

Technological change.

Soft and hard technology investment

Skilled labor force

Imitation of successful international enterprises

Regional integration.

Incorporation of “productive chains”

Comparative & competitive advantages

Regional consolidation

Competitiveness & Internal market development

Internationalization.

Mexico: an open economy

Strategic international alliances

NAFTA APEC

A perfect business partner:

Low –cost competitive inputs

Preferential access to world-wide markets

Trade.

0 10 20 30 40

1

Imports (billion US$)

Taiwan

South Korea

China

Canada

Germany

Japan

USA

•Imports: US $168.3 •Exports: US $ 159.2

0 50 100

1

Exports (Billion US$)

Brazil

Venezuela

UK

Spain

Germany

Canada

USA

Exporting sectors.

Exports:

1. Oil & mining

2. Agriculture

3. Manufactures:

Automobiles

Electronics

Household appliances

Textiles

1982 EXPORTS

6%

24%

70%

AGRICULTURE

MANUFACTURES

OIL & MINING

2001 EXPORTS

3%

89%

8%

AGRICULTURE

MANUFACTURES

OIL & MINING

Network of free trade.

NAFTA.

USA, Canada & Mexico Long-term agreement

1994 signed up - 2004 tariffs will be face out

10 years to create infrastructure for a “fair competence”

APEC.

21 members 2.5 billion people 47% of world trade 70% of global

economic growth

Conclusion Study case: Small textile firms.

35 years of specific targeting

Stimulate import of technology: by reducing import taxes.

Capital and input financial support.

Simplification of administrative affairs.

Results:

Export growth rate: 20.3%

92% of manufacture goods exports

Industrial Policy.

Human capitaldevelopment

Financing & taxation system

Regional integration

Technological change

Internationalization

Goal: Highest competitiveness, close the gap among Mexico and it’s international partners.

Thank you.