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Two former Mexican finance ministers came to Tijuana this month and both said Mexico has a bright future — if Mexico's Congress can finally enact meaningful financial reforms. One of the ministers said that as a result of demographic change, Mexican families have the opportunity to save and invest money as never before.
Francisco Gil, finance minister under President Vicente Fox (2000-2006), spoke July 20 to COPARMEX Tijuana (The Mexican Employers Association), while Pedro Aspe, finance minister under President Carlos Salinas de Gortari (1988-1994), spoke earlier this month to a binational mayors conference.
Mexico to experience 'demographic bonus',
Ciudad Juarez, Mexico to keep growing, Francisco Gil says
Former Finance Minister Francisco Gil pointed out that despite all the security problems in Ciudad Juárez, investment in maquiladoras continues to grow there, and said Juárez's trade with Texas grew 47% last year. The U.S. Bureau of Transportation Statistics said Texas-Mexico surface trade was up 33% last year to $114.5 billion. California surface trade with Mexico was $47.6 billion.
Gil said many companies are coming from South Korea and Taiwan. For example, Taiwanese electronics maker Foxconn, which makes makes iPhones, Dell computers and other products, opened a maquiladora last summer. The new maquiladoras in Juarez also include an Electrolux plant that opened this year, replacing one closed in Iowa in 2009.
Gil said lower transportation costs because of Mexico's proximity to the United States, Mexico's relatively low labor costs and the much-lower natural gas prices in northern Mexico than in Asia are giving Mexico a comparative advantage. Still, analysts say Juarez still is not back to where it was before the global recession began.
Gil, 67, said that despite that despite all the difficulties facing the Mexican economy, there were many other reasons to be optimistic.
He said Mexico is very competitive, is becoming an world industrial export center and has a lot of potential, but needs profound economic reforms to do well in the long-term.
He said foreign investment in the automotive sector shows some of Mexico's potential. Fiat in February announced a $550 million investment to produce Fiat 500s at its Chrysler plant in Toluca for the U.S. and Latin American markets and wants to increase production. Volkswagen invested $400 million at its huge complex in Puebla for the 2012 Beetle, the only place it is being built. The Beetle started coming off the assembly line this month and will be sold in Mexico and all over the world. Gil said Volvo may invest in Mexico, too: Chinese investors who bought Volvo are considering opening a plant in Durango. He said the aerospace industry is making strides in Queretaro.
Gil, now the regional chairman of the Spanish telecommunications company Telefónica for Mexico and Central America, said he has shocked his social-media conscious daughter by recently by becoming a user of Twitter. He said it is helping him in his business.
He gave a pitch for businesses to track their vehicles with devices by using a wireless telephone data stream, and said one company using Telefónica to keep watch over where its vehicles go told him it had not suffered an assault for the last two and a half years. He said the phone service complements GPS coverage, which he said can go out under bridges and in buildings, whereas phone coverage often extends to those places. (Of course, cell phone coverage can have its own problems.)
He said energy reforms are badly needed. He likened Mexico's investment laws regarding energy to those of North Korea.
He said Mexico would do well to pass the reform package he proposed during the Fox administration.
He said he was glad to hear that Coparmex Tijuana President Juan Manuel Hernández Niebla (right) was pushing for economic reforms.
Both Aspe and Gil joined the Institutional Revolutionary Party around 1980. Gil worked under Aspe in the Salinas administration and also served in the central bank in the Zedillo administration before joining the Mexican telecommunications company Avantel in 2000.